The Early Automobile

The first demonstration of the internal combustion engine was produced by Nikolaus Otto in 1876. This self contained source of power became the method of choice for automobile makers. Seen below is a model of an early engine.

The modern automobile was invented by Karl Benz in 1885, in Germany. Although steam powered vehicles had been introduced roughly a decade prior, the automobile as we know it, which utilizes a 4-stroke, gasoline powered, cylinder-and-crankshaft, internal combustion engine, was the brainchild of Benz. His company, Benz & Cie, became the largest automobile producer at the time, producing over 500 vehicles in the year of 1899. A competing company, DMG, produced automobiles in smaller numbers for several years before merging with Benz's company shortly after WW1. The new company was dubbed Mercedes-Benz, which bears the name of DMG's Mercedes motor. Another important development of the era was the diesel engine, which was invented in 1892 by Rudolf Diesel. The diesel engine is slightly different, it does not utilize spark plugs to ignite the fuel, but rather the heat of the previous combustion to create ignition. These engines also use diesel fuel, which offers better efficiency and does not pollute the atmosphere as much as traditional gasoline does.

Check out this link for a cool animation of the 4-stroke internal combustion engine. There is some additional information below the animation.
http://www.animatedengines.com/otto.shtml

Sources: The link above, and my brain.
Picture courtesy of: http://bancroft.berkeley.edu/Exhibits/physics/images/origins18.jpg