The major problem concerning the automobile industry is the need for the alternative fuel source with the present fuel source- fossil fuels depleting at a faster rate. Also the aim was to find an alternative fuel with minimum emission. We have developed a solution for this problem by using methanol as a fuel source for automobile. We propose methanol as an alternative fuel source for IC engines as well as electric hybrid/ electric vehicles. For electric/ electric hybrid vehicle, we use methanol as a fuel source through fuel cells. We propose usage of Direct Methanol Fuel Cell which uses methanol as a fuel source which produces electric energy to drive the vehicle instead of using a battery. The advantages of using methanol as a fuel source for IC engines are increased volumetric efficiency and increased power output. Methanol also has high octane rating and high knock resistance. It has high auto ignition temperature, therefore easy to store and transport. The use of DMFC for electric vehicles produces no harmful emissions except CO2. Also, we have increased the efficiency of the fuel cell by changing its channel geometry and by implementing preheating process for methanol before it is been fed into the fuel cell. The methanol is a renewable energy source which is available in abundant and can be easily produced by various methods and even by biochemical methods. Therefore, the availability and the emission- both problems have been solved by our proposed method. The other contribution of this project towards the society is that it reduces the cost of the fuel for our vehicles.