Combine chili powder, sugar and garlic in a bowl. Add olive oil and combine to paste-like consistency. Rub chili powder mixture into both sides of each steak.
Heat one side of the grill and add hickory chips (or wood of your preference). When coals are hot, place steaks on grill so they are away from fire and not directly over heat. Grill for 8 minutes, turning once.
Place hickory chips to the side (or remove, if possible). Or heat other side of grill, omitting hickory chips.
Finish by grilling steaks for another 4 minutes each side (or to desired doneness) directly over flame, without hickory chips.