History of Cars
 Nicolas Cugnot's vehicle 
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Steam engines powered cars by burning fuel that heated water in a boiler, creating steam that expanded and pushed pistons that turned the crankshaft, which then turned the wheels. During the early history of cars - both road and railroad vehicles were being developed with steam engines. (Cugnot also designed two steam locomotives with engines that never worked well.) Steam engines added so much weight to a vehicle that they proved a poor design for road vehicles; however, steam engines were very successfully used in locomotives. Historians, who accept that early steam-powered road vehicles were automobiles, feel that Nicolas Cugnot was the inventor of the first automobile.
The history of cars continued on Christmas Eve, 1801, when frightened British farmers rushed to their windows to witness the first practical use of mechanical power to move a vehicle. What they saw was a smoke-belching, steam-powered carriage moving without being pulled by a man or an animal.  Richard Trevithick's Electric Carriage (a replica) It was driven by their neighbor Richard Trevithick and he was driving the world's first true "automobile". An automobile is a self-propelled land vehicle that can carry passengers or freight. Trevithick's self-propelled carriage could carry passengers over land at a speed of nearly 10 miles per hour. And only if those neighbors knew at that time - a page in the history of cars had been unfolding.
Neither his neighbors nor even Trevithick himself appreciated the importance of his achievement. He considered his noisy carriage little more than a toy. He finally took it apart and sold the engine to a mill owner.
The History of Cars Continued with Alternative Fuel
The early steam powered vehicles were so heavy that they were only practical on a perfectly flat surface as strong as iron. A road thus made out of iron rails became the norm for the next hundred and twenty five years. The vehicles got bigger and heavier and more powerful and as such they were eventually capable of pulling a train of many cars filled with freight and passengers. However impractical as these cars may have been, the design for these vehicles were the basis for the subsequent self-propelled vehicles, enriching the history of cars, and ultimately became the basis for the design of the car we know today. 
The next step towards the development of the car was the invention of the internal combustion engine. Francois Isaac de Rivaz of Switzerland designed the first internal combustion engine in 1807, using a mixture of hydrogen and oxygen to generate energy. However, his was a very unsuccessful design.
An internal combustion engine is any engine that uses the explosive combustion of fuel to push a piston within a cylinder - the piston's movement turns a crankshaft that then turns the car wheels via a chain or a drive shaft. The different types of fuel commonly used for car combustion engines are gasoline (or petrol), diesel, and kerosene. Several designs were developed for a car to run on the internal combustion engine during the early 19th century, but with little to no degree of commercial success due to the fact that there was no known fuel that could be safely internally combusted.
A few years after Trevithick's steam engine, American inventor Oliver Evans built a steam-powered dredge, equipped with wheels so that it could move on land. He drove it around Philadelphia's Center Square to convince wealthy people to provide capital in manufacturing steam vehicles. But most people thought his invention was not practical. The history of cars is fortunate to have people like Trevithick and Evans because steam-powered vehicles gained rapid popularity in England. But these early steam coaches soon ran into opposition. Stagecoach and railroad operators resented and feared their competition. Early Electric Cars
Steam engines were not the only engines used in early automobiles. Vehicles with electrical engines were also invented. Between 1832 and 1839 (the exact year is uncertain), Robert Anderson of Scotland figured favorably in the history of cars when he invented the first electric carriage. Electric cars used rechargeable batteries that powered a small electric motor. The vehicles were heavy, slow, expensive, and needed to stop for recharging frequently. Both steam and electric road vehicles were abandoned in favor of gas-powered vehicles. Electricity found greater success in tram ways and streetcars, where a constant supply of electricity was possible. From 1831 to 1865, the British Parliament passed a series of strict laws that hampered the development of the automobile. The strictest of those was the Red Flag Act of 1865 which was so named because one of the provisions of the law required a person to walk ahead of all "road locomotives" to warn of their approach proving that the history of cars could be a colorful one. The various laws unfortunately imposed so many limitations and such high taxes that steam coaches could not operate without losing money. This hurt automobile development in England until the Red Flag Act was repealed in 1896.
The links below continues this site's exploration of the history of the automobile, as it goes through its different phases, and the manifold discoveries and improvements that came along through its development to the present day: HISTORY OF THE AUTOMOBILE Early cars through the 1950s Forerunners of the Modern Automobile
Cars of the 1970s 1976 Cadillac Eldorado Convertible 1972 Lincoln Continental Mark IV Cars of the 1980s Cars of the 1990s
More accounts of the history of the automobile
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The first recorded use of a self-powered vehicle was in 1769 when Nicolas Cugnot, a French military engineer, designed and built an awkward but workable three-wheeled vehicle powered by a steam engine. The vehicle was intended as a tractor for hauling heavy cannons.