I.  inventions of self-propelled road vehicles started in the late 18th and early 19th century, but steam engines and later battery power just didn't make a worthwhile vehicle.  (more early history )
 

 Cugnot's Vehicle

• A French artillery officer, Nicholas Joseph Cugnot, built and ran a 3 wheeled carriage powered by a steam engine in 1769, but which ran off the road the first time it went into a curve at its full speed--3 miles and hour.  It was the first self-propelled highway vehicle, but it was no improvement over the horse.
• Some steam powered busses were actually used commercially in England in the first half of the 19th century, but once the railroad took off it was clearly superior.
• The railroad and stagecoach industries succeeded in having a law passed to stop these in 1865 (repealed 1896)--on the ground of the dangers of frightening horses self-propelled vehicles on public highways were limited to a speed of 4 miles an hour and had to be preceded by a man on foot carrying a red flag

• Etienne Lenoir (a Belgian mechanic working in Paris) developed a workable two cycle internal combustion engine in 1860, but it weighed several hundred pounds and developed 2 horsepower.  He actually built and ran a vehicle using his engine, but it was an isolated experiment that didn't lead to anything.
• Nicholas Otto did better with a four stroke engine, and a number of German inventors immediately wanted to put it in a road vehicle.  Gottlieb Daimler and Wilhelm Maybach and Karl Benz built the first workable vehicles with one cylinder engines (first a motorcycle and a tricycle) and developed workable automobiles in the 1880s and had them in commercial production in the early 1890s.  Significant commercial production developed in the 1890s in Germany and France (whose advantage was good roads), with Britain trying to catch up.  These were mostly playthings for wealthy sportsmen, though by 1900 touring cars were used some by wealthy families instead of carriages and there was some use of electric automobiles by wealthy ladies in the city.

  Daimler 1886

you also needed decent roads, and the bicycle boom provided these, as well as a sense of the market.  The automobile probably could have been built 20 years earlier, but the interest was not there.

• J. K. Starley introduced the safety bicycle in 1885.  People had been satisfied with the railroad--only with the bicycle did they think of long-distance travel over ordinary roads.
• the pneumatic tire was invented by John Dunlop in Ireland in 1888 specifically for use in bicycles
• the automobile would not have been able to compete with the railroad in comfort and speed without the hard-surface road and the pneumatic tire

 1893 Duryea

• The first American automobile was developed by two brothers who were bicycle mechanics, Charles and Frank Duryea, who copied a published description (Scientific American, 1889) of Benz's automobile and built a motor car with a one cylinder engine in 1893.  Others quickly followed--the Chicago Times Herald sponsored the first American automobile race in 1895, which was won by Frank Duryea who covered a 55 mile course at an average speed of 8 miles an hour with a two cylinder automobile
• this led to a lot of very amateur re-inventing.  Hiram Percy Maxim , son of the inventor of the Maxim gun and an MIT graduate, claimed he had the idea for a powered vehicle when he was bicycling home late one night after a romantic evening.  He knew that internal-combustion engines existed and might provide the mechanism he wanted, but he had never seen one, so he went to see a natural-gas powered Otto engine working a pump.  He did not know if gasoline could be used as a fuel--he was completely unaware of what had been done in Europe and by the Duryea brothers.  So he took himself to a remote corner of the land of the American Projectile Company where he worked with a half a pint of gasoline and some empty cartridge cases to find out what happened when gasoline was ignited in a cylinder.  He was lucky and didn't kill himself, but it took him 3 years to develop a workable engine.  His results attracted the attention of the Pope Bicycle Company and he went to Hartford to be chief engineer of Pope's attempt to establish the first large-scale commercial production of automobiles.  Unfortunately Colonel Albert A. Pope thought people the gasoline engine was too dangerous ("You can't get people to sit over an explosion.") and in two years the company build 500 electric and 40 gasoline carriages.  Maxim went on to pioneer amateur radio.
  
• in the 1890s the technological choice was not clear, and gasoline, electric and steam cars were built in close to equal numbers.  The electric was actually most popular at first, because it was silent, clean, and easy to operate, but battery technology did not allow long runs and high speeds.  The early steam cars had more power than gasoline cars and did not require complicated transmissions, but high pressure steam engines required a lot of maintenance, a lot of water, and raised public fears of boiler explosions

• most of the early manufacturers bought parts from suppliers and assembled automobiles one by one--they were not much concerned with improvements of the parts (the part-makers generally had licensed the key technology)
• production rose rapidly
• by 1899 30 companies were producing vehicles commercially and had produced about 2500 vehicles--many were sold through bicycle dealers.  In 1900 production was 4,192 units sold for an average price of just over $1000 each.
• in 1908--the year the Model T was born and General Motors was founded, production had risen to 65,000.
• By 1910 458,500 automobiles were registered in the United States, made by something over 1000 different manufacturers

• some manufacturers build cars like carriages--fairly heavy (with a lot of wood) touring cars that were often owned by well-to-do families and driven by chauffeurs who handled the maintenance of the car.  Studebaker had been the largest manufacturer of horse-drawn vehicles in the world before turning to automobiles.

  1897 Curved Dash Olds

• other manufacturers imitated the mass production of bicycles--produced a standardized light-weight, low-price automobile.  Ford was not the originator of this approach, but rather invented an improved method of mass production.  Pope had been a bicycle maker, Pierce-Arrow started out making bird cages, then spokes for bicycle wheels, then complete bicycles and motorcycles, then automobiles.  Ransom Olds designed an early low-priced car in 1899 and produced them in large numbers--5,000 in 1904--before deciding to concentrate on touring cars.  It wasn't quite an early Model T--it was too small, too light, and too low powered for family transportation.  Role of “tinkerers” and technology transfer

Model T Ford 1908