For all the advancements we've seen in automotive technology over the years, automakers still build cars much the same way Henry Ford did.

It doesn't matter if it's a hulking SUV, an almond-shaped hybrid or a leading-edge electric vehicle. Automobiles are still heavy machines made largely with steel stamped in giant presses in capital- and energy-intensive factories.

Gordon Murray believes there is a better way. He calls it iStream, for Stabilized Tube-Reinforced Exoframe Advanced Manufacturing. It replaces stamped steel with a composite monocoque bonded to a tubular steel frame and plastic bodywork. The result is a factory that requires 80 percent less capital investment and 60 percent less energy, while yielding cars that are 20 to 25 percent lighter – and far more fuel-efficient – yet just as safe as the cars we drive now.

It's a radical proposal, one easily discounted if you don't know Murray's background.

Murray, 65, was a towering Formula 1 designer and engineer from 1969 until 2006, first with Brabham and then McLaren. He pioneered the use of composite materials in race cars like the Brabham BT49 and McLaren MP4-1. He also was responsible for the incomparable McLaren MP4/4, which won 15 of 16 races in 1988. Many of the innovations he brought to F1 are now commonplace in auto racing and appearing in high-end sports cars.

Murray also was the lead engineer on the McLaren F1, the first road car to use a carbon-fiber monocoque and still the fastest normally aspirated car ever. He also led the development of the Mercedes-McLaren SLR, another carbon-fiber supercar.

Now Murray has turned his attention to using composites to build cars for the rest of us. He's already proven iStream works by building the T.25 microcar (pictured) and its electric sibling, the T.27.

At just a bit more than 4 feet wide and just a bit shy of 8 feet long, the cars are smaller than a Smart ForTwo or Scion iQ yet they can seat three people or carry 750 liters [26 cubic feet] of cargo. Parked nose to the curb, three will fit in a single space, and they're so narrow you could drive two abreast. The driver sits up front with two passengers behind, and everyone gets in through a canopy that opens like a Lamborghini’s doors – a design that allows the cars to squeeze into the tiniest of parking spaces.

Gordon Murray Design is talking to a few firms about building the T.25 and T.27, but it has no plans to become an automaker. Murray isn't selling cars, he's selling a new way of building them. More than a dozen automakers and startups have expressed interest in the process.

We recently met Murray at the Silicon Valley venture capital firm Mohr Davidow to learn more about iStream and why cutting the weight of our cars is, in Murray's words, "the most powerful tool we have to fight emissions."

Wired.com: You’ve said, “We’re on the crest of the wave of a new era. We’re entering a new industrial age.” How so?

Gordon Murray: It’s a new industrial revolution. The invention of the steam engine revolutionized manufacturing and shipping. It changed people’s lifestyles and the commercial world massively. But since then, all we’ve had, really, is a slow evolution. If you jump forward 10 years and look at where energy pricing sits and where the pollution problem sits, we’re going to need some rapid and big changes.

If you look back 15 years and look at what’s happened with telecommunications and the Internet, nobody could have predicted how big that would become, how quickly it would happen and the impact it would have on our lives. I think we’re going to see something similar in energy generation and transportation.

Wired.com: Where does iStream fit into this?

Murray: It fits perfectly. Of all the things we can do right now to save energy in mobility, the biggest impact will come with saving weight. But that isn't easy.

It’s far easier to make a large, heavy motorcar full of content that you can sell for a large amount of money. A luxury car’s price has nothing whatsoever to do with the manufacturing process. But if you’re making a small lightweight car, that’s not the case at all. It’s all about what the car costs to make, and what is the minimum amount of profit you can add onto that. The amount of energy needed to make a small car and a big car is virtually identical, so why would you make a small car? iStream changes that equation.

Wired.com: How?

Murray: It gets away, entirely, from stamped steel. We’re still building cars the same way Henry Ford built the Model T. We’re still stamping steel panels, welding them together, painting them and putting bits in them. We’ve been doing that for 100 years. When energy was not a problem and pollution wasn’t something anyone talked about, it was fine. But it’s not fine anymore.

Wired.com: So how is iStream different?

Murray: What we’ve done is dump stamped steel and look at materials that could replace stamped steel to lower the capital cost, lower the weight but not decrease safety. We've replaced stamped steel with a simple tube frame and a composite monocoque, much like a Formula 1 racing car but without using expensive carbon fiber. That reduces manufacturing energy by about 60 percent and the lifecycle damage by about 40 percent.

Wired.com: You’re using a composite monocoque?

Murray: It’s a composite structure much like carbon fiber, but we don’t use carbon. It’s just too expensive. What we’re trying to do is bring Formula 1 technology to a level where everyday motorists can have the benefits of that light weight and safety.

We use glass fiber [ed. note: the same material in fiberglass] as the reinforcement, a polyurethane matrix and a paper core. You get a panel that you can make in 100 seconds and a monocoque that costs $150 instead of the thousands of dollars required for carbon fiber. The composite monocoque is bonded to a mild steel tubular frame. That provides the mounting points for the control pedals, the steering column, the suspension.

The body panels can be anything you like. We’ve chosen injection molded plastic because the tooling costs are relatively low compared to stamped steel. And it allows us to use plastic made from recycled plastic bottles. Every T.25 or T.27 uses 750 recycled plastic bottles in the body.

Wired.com: And the body panels are bolted to the car?

Murray: Wherever we can, we affix them mechanically. That saves time and money in the manufacturing process and makes it easier to make repairs.

Wired.com: What does an iStream factory look like?

Murray: It’s very quiet and clean.

The process starts with mild steel tubes. The manipulation of those tubes is not new technology, it’s just used in a slightly different way. The tubes are manipulated with a laser profiling machine, a CNC bender and robotic welding. That’s the frame. The antirust coating process steers clear of electrolytic coating because that’s another thing that’s going to come under the hammer soon because of VOx emissions and other pollution. We’ve chosen an auto ferritic chemical coating that has no emissions at all.

You have a welded frame that’s dipped and then baked. The panels are mechanically manipulated. Bonding material is applied and the monocoque is bonded to the frame. The T.25 has 11 panels, so there are 11 tools. A typical motorcar has 350 panels and each one of them will require 5 tools to manufacture.

Wired.com: This process can be used to manufacture any size vehicle? The T.25 and T.27 are microcars…

Murray: Yes, but the T.34 is a 13-seater truck and we’re doing two five-seater three-door saloons. It can be used for anything within reason, really.

Wired.com: You’ve called this revolutionary, but the auto industry is evolutionary. How do you sell this to automakers?

Murray: Four years ago, we thought we wouldn’t get a lot of interest until they saw a startup making cars with iStream and they saw how energy efficient it was. 2008 changed all that. The confluence of the energy crisis and the commercial downturn really shook up the automotive business. We’ve had 17 OEMs come see us, and we’re currently working with five. We’ve got another three waiting in the wings.

Another thing that makes automakers nervous is the uncertainty of where powertrain technology is going. Look at the predictions on [the adoption] of hybrids and EVs. There’s an 80 percent spread between the most pessimistic and most optimistic predictions. That would make any car company nervous because you have to plan ahead. Your break even point on a car might be 80,000 vehicles a year, but if you think you’re only going to sell 20,000, you aren’t going to spend the money on a new platform.

Wired.com: So iStream makes it easier for automakers to diversify their lineups?

Murray: Yes. Or choose a platform that will work with multiple powertrains. Automakers get really excited when you show them a platform that can be electric, petrol, diesel or hybrid on the same assemblyline on the same day. That’s very difficult, if not impossible, to do with stamped steel.

With iStream, because it’s an exoframe – the load carrying is on the perimeter of the car, and the composite panels stabilize it with no lumps or bumps – you can create great big open spaces that are very adaptable. If you are forced to change that space for, say, new battery technology, 80 percent of your tooling is simply rewriting software. You might have to retool one panel. It’s much cheaper than stamped steel.

Wired.com: Who are the five companies that have signed on?

Murray: I can’t tell you, unfortunately. We have NDAs.

Wired.com: Why composite? Why not use an exoframe and, say, stamped aluminum panels?

Murray: If you want to make small cars, light cars, they have to be safe. We’re getting 100 percent more specific energy absorption than stamped steel. In other words, we’re half the weight for the same safety. That’s what composites do. Steel doesn’t do that, and aluminum certainly doesn’t do that.

Wired.com: You’re Chapmanesque in your obsession with weight, and you’ve said, “Cutting weight is the most powerful tool we have to fight emissions.” Why is weight so important?

Murray: It’s the laws of physics. If you’re trying to shift a mass – a car, a boat, a train, whatever – with a motor, the lighter the mass the less energy you’re going to use to move it.

The other thing that kills you is rotational inertia. If you’ve got a bigger car, you need bigger wheels and tires, and you need a bigger engine, so the crank and the flywheel and the gears are all bigger. If you build a small car with smaller, lighter wheels and a smaller engine, smaller transmission, the inertia drops as well.

We recently competed in the Future Car Challenge with the T.25. The engine in the T.25 is a Mitsubishi three-cylinder, 660 cc normally aspirated. It’s a fairly clever little engine, but it’s nothing extraordinary. We got 96 mpg. We used less energy than nearly all the hybrids and half the electric cars. There was nothing more clever than that, just light weight.

The T.27 electric car is 680 kilos. We did an energy calculation against all the other electric vehicles we could find, the Tesla, the Nissan Leaf, the Mitsubishi iMiEV, the Mini E and the Smart Electric Drive. We’re 40 percent more efficient than the next best electric car.

Wired.com: The implications of significant weight savings are just as great for electrics as conventional cars, because weight is an enemy of range.

Murray: Exactly. If you halve the weight of the car you can, roughly speaking, halve the size of the battery. That’s exactly what we did with the T.27 [pictured above]. We chose a 100-mile range as optimum. We’ve got a 120 kilo cell weight for the battery, which is less than half the Mini, half the Mitsubishi and about 40 percent the weight of the [battery in the] Nissan Leaf.

The other way to quantify it is cost. For any car powered by a lithium-ion battery, roughly half the retail cost is the battery. For every kilogram you can take off the chassis of an electric car, you save $23 to $31 of battery cost.

We worked out the business plan for the T.27, which shows you can sell it for 14,000 or 15,000 British pounds and make a very good profit. It’s less than half the battery weight and about half the retail price of the Nissan Leaf.

Wired.com: What is the weight of the two vehicles?

Murray: The T.25 is 575 kilos. The T.27 is 680 kilos.

Wired.com: What amenities do they have? One reason cars have grown heavier is they’re packed with mandated safety equipment and amenities consumers want.

Murray: The T.25 is four-star Euro NCAP, so it’s got three airbags, ABS, ESP and all the usual crush zones you have to have. It’s got air conditioning, six-speaker hi-fi system. It’s got all the usual features; it’s even got an electrically heated front windscreen. It’s everything you’d want in a commuting vehicle. The T.27 is similar; the only thing we didn’t put in it is the air conditioning because the load really hammers an electric car. But you could put A/C in it if you wanted.

Wired.com: What are the performance specs of the T.27?

Murray: It’s a 12.5 kilowatt hour battery, a 25 kilowatt motor. It’s got a 110-mile range in what we call “summer mode” and an 85-mile “winter" range. That’s where you’ve got all the loads running, like heat. It’s a 4.5-hour charge at 220 volts and about $1.30 to charge at UK electricity costs, which are horrendous.

The T.27 met the mandatory EEC 40 percent offset deformable barrier front high-speed impact with zero cabin intrusion.

Wired.com: The biggest problem a car like the T.25 faces in the United States is this: Consumers believe they need big vehicles, and they’re convinced small cars are unsafe. How do you parry that double-edged sword?

Murray: You do what Smart did. Before they even sold a car, Smart published static pictures and video of the car in Euro NCAP crash tests. A Range Rover in Europe has a four-star score for safety. So does the Smart.

But I would never in a million years try to sell the T.25 or T.27 as they are in the States. It’s never going to happen. But if you asked me if we could do an electric car the size of the Ford Fiesta that holds four people and is 40 to 50 percent more efficient than any other electric car, the answer is yes. I don’t want to give anyone the impression that iStream is only for small cars. It will work with anything within reason. It’s just that we thought there is a wonderful gap in the market in Europe for a sub A-segment car and a great need for one.

Wired.com: Is there a plan to produce the T.25 and T.27?

Murray: Yes. We’re talking to three potential manufacturers. Once we’ve agreed upon a deal, and we’re several months away from that, it would be about 24 months to produce the car. That, coincidentally, is the time it takes to build an iStream factory, build a pilot line and do the operator training.

Wired.com: How long does it take to build a car with iStream?

Murray: The T.25 frame takes 4.5 hours and the assembly is 2.3 hours. That’s another advantage of iStream – construction is much faster.

Wired.com: Do you envision a time when a majority of cars are built with iStream?

Murray: If it happens, it will be long after I’m gone. But I certainly, looking 10 years ahead, would like to think that most of the manufacturers and startups we’re working with will have strong lines going.

Wired.com: You’ve said this technology is so disruptive that you don’t need to be a General Motors or Daimler to build cars. Do you see a startup using iStream?

Murray: Absolutely. We’re working with four of them at the moment. No one in their right mind outside China would try to take on Toyota, VW, Ford or anyone else with stamped steel because it would take them so long to get up to speed. This is an opportunity to leapfrog.

Wired.com: We’ve gotta talk about F1 for a moment and the calls for sustainability. They brought KERS back, there was talk of requiring electric propulsion in the pit lane…

Murray: I wish they’d forget all that rubbish.

Wired.com: Does any of this have a place in Formula 1?

Murray: Absolutely not. Formula 1 is entertainment now. You can’t rebuild engines, you can’t develop them during the year. The chassis technology is pretty much the same. Aerodynamics absolutely rule when it comes to performance. Everyone is on the same tire. So the “pinnacle of engineering” is sort of not there anymore. I think people should just accept that it is a business and an entertainment sport and stick with that.

The actual energy consumption of Formula 1 has nothing to do with the cars. It’s moving all the people, the spares, all those trucks and motorhomes all around the world. I can remember in 1972 when we had the first energy crisis. There was a huge cry about stopping motor racing because it was wasteful. Someone calculated that the fuel used by the entire Formula 1 grid, with all the testing and racing, in a single year was equal to one transatlantic flight for a 747, one way. It put everything in perspective.

Personally, I think they should stop trying to be green and just get on with it. Besides – they are green. A Formula 1 engine designer spends all of his waking hours trying to figure out how to use all of the energy in a gallon of fuel and turn it into motive power. A lot of the thermodynamics and electronic controls and induction systems and injection that we see in our road cars came through that pursuit.

Wired.com: Last question: Can anyone catch Sebastian Vettel?

Murray: Probably not. Red Bull are just miles ahead.