(Business 2.0) – Cheap titanium would be worth a lot of money to the automotive industry. Cars made with the lightweight metal would consume significantly less gas than steel cars, spew fewer emissions, and never rust. Yet at today's price of $3.50 per pound--about 10 times the cost of steel--titanium has been limited to applications such as jet-engine parts and mountain-bike frames.

That could soon change. One of the world's biggest suppliers, Denver-based Titanium Metals Corp., is racing to develop a shockingly simple way to make the stuff. Discovered by Cambridge University researchers in 1996, the process relies on an electric current to liberate pure titanium from titanium dioxide. Last spring the Department of Defense--another organization with an obvious interest in a lightweight, high-strength replacement for steel--awarded Titanium Metals $12.3 million in research funding to refine the British process. With help from General Electric, United Defense, and the University of California at Berkeley, Titanium Metals says it "is moving at an appropriate pace" to commercialize full-scale production of the lower-cost material by 2007.

Some remain skeptical. Sam Froes, a University of Idaho materials expert, says there have been dozens of experimental techniques for making affordable titanium over the years, and none has worked. Investors have been far less circumspect, however. Since Titanium Metals snagged the DOD grant, its stock has more than quadrupled.