DEXTER, Maine — A locally designed electric car has been selected as one of 12 finalists in the worldwide Progressive Insurance Automotive X Prize competition, which carries a $10 million prize purse.

Hydro Phi Technologies Inc. of Dexter retrofitted a five-passenger Ford Five Hundred sedan by installing a diesel generator as its charging system. It will unveil its design next week at a Las Vegas automotive show by the Specialty Equipment Marketing Association, known as SEMA.

News of the selection elated employees of the small Dexter firm, which is competing with employees from much larger businesses. But they didn’t stop working.

“We’re not going to celebrate until the contest is over. We still have a lot of work ahead of us,” Sherman Leighton, the Ford Five Hundred retrofit project manager, said Friday.

The X Prize Foundation and Progressive Insurance, which paired for the contest, invited teams from around the world to focus on a single goal: design clean, viable and super-efficient cars that people want to buy.

Leighton said the company developed a hydrogen system for its Ford vehicle that fuels a diesel generator that burns with diesel fuel. The process cleans emissions, gives better fuel mileage, and as such reduces its carbon footprint, he said.

Rod Aguillard, Hydro Phi’s executive vice president of business development, said in a news release that the company has the technological solutions and know-how, “but we are just waiting for the world to change for alternatives to be accepted in the marketplace. We believe the X Prize competition will be one of the tipping points that helps make that change.”

The company has been working for about 18 months on the vehicle, and company officials deliberately selected a family-size vehicle to work on, according to Leighton. He said the energy-efficient vehicles on the market today tend to be small, two-seaters, but a larger alternative vehicle is needed for families.

Aguillard said the company can provide drivers with a green energy vehicle that gives the same performance and comforts of a gasoline-powered vehicle. “Hydro Phi’s unique application of a hydrogen-on-demand diesel generator hybrid system allows for re-charging of a battery electric vehicle while operating without having to plug into the grid,” according to a company news release.

Hydro Phi’s technology, the HydroPlant, allows a production vehicle to attain more than 100 miles per gallon in fuel efficiency, he noted. It is the first practical, economic process to distend water molecules as the fuel or energy source for a wide spectrum of applications directly from the water it consumes as its fuel source, according to the company.

While the company already went through a rigorous design-judging category, there are still more categories in which it must compete, according to Leighton. “We have several contests we have to go through between now and the end of next summer,” he said. Leighton said he’s had the opportunity to see the competitors vehicles and realizes it will be a challenge for the small Dexter company. However, the employees are optimistic, he said.

Leighton said the company has extended an invitation to elected state officials to come and see the vehicle and has offered to display the vehicle at the Maine State House when it returns home.