1850's During the Civil War, a liquor tax was placed on ethanol whisky, also called Moonshine, to raise money for the war. 1876 Otto Cycle was the first combustion engine designed to use alcohol and gasoline. 1896 Henry Ford built his first automobile, the quadricycle, to run on pure ethanol.1920's Standard Oil began adding ethanol to gasoline to increase octane and reduce engine knocking.1908 The first Ford Motor Company automobile, Henry Ford's Model T, was designed to use corn alcohol, called ethanol.utomobiles that can run on E85 are usually referred to as Flex Fuel or Alternative Fuel Vehicles, (FFV and AFV). The vehicle's gas cap will always state when up to 85% ethanol (E85) is permitted. E85 fuel should never be used in a conventional gas-powered vehicle.