“In the quest for alternatives to oil, our government has thrown around enough money subsidizing special interests and excusing failure,” McCain said in Fresno, Calif. “From now on, we will encourage heroic efforts in engineering, and we will reward the greatest success.”

The senator said the $300 million prize, a dollar for every American, will go to the person who develops “a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars.”

McCain also proposed to offer a $5,000 tax credit to automakers for each zero-emissions car they sell.

However, he also intends to punish manufacturers for not abiding by fuel efficiency standards.

“Some companies don’t even bother to observe CAFE [Corporate Average Fuel Economy] standards. Instead they just write a check to the government and pass the cost along to you,” McCain said. “Higher-end auto companies like BMW, Porsche and Mercedes employ some of the best engineering talent in the world. But that talent isn’t put to the job of fuel efficiency when the penalties are too small to encourage innovation.”

He also called for a leveling of the playing field “for all alcohol fuels that break the monopoly of gasoline, lowering both gasoline prices and carbon emissions.”

“Whether it takes a meeting with automakers during my first month in office, or my signature on an act of Congress, we will meet the goal of a swift conversion of American vehicles away from oil,” McCain said.