Vinod Khosla, a well-known venture capitalist and one of the most prolific investors in green technologies, has declared personal war on oil and coal.
He also thinks the environment can be helped by stressing efficiency and finding breakthroughs in new materials.
But hybrid electric cars won’t succeed, he said in an interview. You have to pay $5,000 more on a Prius in order to save half a ton of carbon a year, which is more than most consumers will go for, he explained. Buying hybrids “is mostly about personal guilt trips.” It’s like wealthy investors giving money to “art museums instead of to starving people” in Africa, he said.
“Are electric cars going to make a difference any time soon? No. Are they going to be material? No. If something costs $2,000 more, nobody buys it.” He said these cars are likely to get a one percentage point market penetration. “It’s not going to be reach the average person in Mississippi. That’s what I call my Mississippi test.”
His remarks are significant because numerous auto-makers are in the process of making hybrid-electric cars, or cars that run only partially on gasoline. Others are making fully electric cars, and several are venture backed. Google has added to the excitement by awarding money to green transportation ideas. Tesla is making a sports car electric vehicle, and has lots of venture backing. It’s hard to hear above the buzz. Zealots of a three-wheel electric car made by Venture Vehicles recently severely criticized VentureBeat (see comments) for questioning the look and viability of the three-wheeler after it got venture capital.
Some have criticized Khosla for driving an SUV.
Khosla also singled out wind power, saying it is in the same camp as electric cars. Utilities are dabbling in the sector, using wind for between one and two percent of their grid capacity. “But they think of it as a tax,” Khosla says.
Instead, Khosla been making some huge bets on solar, ethanol and bio-fuels.
12 Comments
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Ray Burt said:
I keep hearing that the Prius isn’t worth the additional dollars. I wonder…compared to what?
What car has the same features (e.g. space, protection) that is an accurate comparison to the Prius? When I traded in my Camry, I got a car with much more back seat room and storage capability…and one that was higher saftey rated.
I just don’t get teh $5K thing…
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Drea said:
People don’t buy hybrids to save money. They buy them because it is a relatively painless way to reduce your carbon footprint, burn 25-50% less gas - reducing dependence on foreign oil, and generally feel superior to all the non-hybrid drivers on the road.
And, yes, I drive a hybrid - Toyota Highlander.
Good size vehicle, crazy amount of power, and gets about 30MPG as opposed to about 20MPG for the non-hybrid.“these cars are likely to get a one percentage point market penetration”
According to Edmunds, Hybrid sales were 2.9% of the US market in May 2007.
http://www.autoobserver.com/2007/06/hybrid_sales_in.html
JD Power predicts about 5% market share by 2010.
http://money.cnn.com/2007/08/02/autos/hybrid_record_sales/index.htm
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Ronnie Somerville said:
Hi, in London if you own a Prius you don’t have to pay the $15 to $20 per day congestion charge to enter the city.
That adds up….
And a city of elecric cars humming along silently sure would be a much nicer place to work and live
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Greg C. said:
It’s nice to know that not everyone is drinking the Kool-Aid. If we just switched our vehicles to run on diesel fuel, we could easily save 15-20% on fuel consumption. It’s easy fix without massive infrastructure changes, or technical know-how, or investment. We can have cars with more power, better fuel mileage, easier to maintain, and reliable what’s wrong with that?
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RC said:
More self serving comments from Vinod. Ask him where all the ethanol stations and pipelines are today. Next ask him the current ethanol production is as a share of gasoline production. The hybrid is here today and being purchased. Imagine 1% of the drivers getting 25% better gas mileage. That 25% savings by this small minority of drivers is likely to exceed the production of ethanol for many years to come.
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Joe Smith said:
Hello,
The problem is 15-20% is not going to reduce demand enough to prevent oil shortages in the future.
This is as much a public policy issue as it is a private enterprise issue.
If Khosla wants to solve the looming energy crisis then he should be promoting mass transit in California as well as investing in new energy technologies.
Invest in maglev train technology and put the local airlines out of business which will reduce the amount of jet fuel consumed for California commuter flights.
Combine the 50 mass transit agencies in the Bay Area
into one agency and make reduce the 2 hour travel time from Menlo Park to Cisco via Cal Train and light rail to 45 minutes which is acceptable. Synchronize the different transit agency schedules so people do not have to wait.GET PEOPLE OUT OF CARS
Make it safe to ride bikes in California. Holland has separate traffic lanes and lights for bikes. Bikes paths cut through areas not accessible to cars. You might die if you ride a bike on Sand Hill road and the San Mateo County Sheriff will effectively write the guy who hit you a ticket.Hummer/Suburban tax
Put a tax on large displacement engines like Singapore.
That will have Detroit screaming but who cares. China will put Detroit out of business in a generation.Conversely cars with a small displacement should have a tax break.
Start businesses recycling cars into electric vehicles. One guy on the peninsula has an old VW bus with an electric motor in it. The van beats Porsches off of the line. He used to recharge it at Costco while shopping.
No gas. No blown transmissions. Who cares if the compression is blown on the internal combustion engine. Send it to China as scrap metal. This will reduce the trade deficit and create jobs converting cars.Give small stores tax incentives to locate in urban areas so people can walk to the store instead of driving.
And put Vinod’s solar panels on your roof to work generating electricity for the electric cars and trains.
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Bob Monsour said:
I’m in Ray Burt’s camp. I don’t have any idea what the Prius is being compared to. I just went to the Kelley Blue Book site to check out new car prices. What I see is a 4-door, automatic Prius with a 1.5L engine @ 76HP, getting 60 mpg city and 51 mpg highway, for a price of $21,610. Compare that to a Camry, 4-door, automatic, with a 2.4L engine @ 158 horsepower, getting 24 mpg city and 33 mpg highway, for $20,280.
Both cars are 2008 models.
First, it’s far less than a $5,000 difference. Next, does Vinod imagine that people spending more money on a car (perhaps like myself, who drives an Audo) would not consider a Prius for their next car? In my case, I’d go from spending more than $45,000 on a car to spending a little more than $20,000.
I agree that for the masses, it is going to take time, but if we as a country don’t move toward more fuel-efficient vehicles, let’s start looking at both $100/barrel oil and CO2 city.
Yes, there are disruptions in technology from time to time, but there are also meaningful incremental improvements that should not be discounted with respect to their potential impact.
For wind, on the other hand, I would agree that it’s on the margins in terms of long-term impact.
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Jim Huether said:
Vinod Khosla must be an idiot and/or have his own personal agenda as a VC.
Hybrid cars are a great transition until other methods become truly viable. A few of the major wins that hybrids give us is that besides getting better mileage in the cities, they pollute WAY less than do regular gas powered cars, they don’t require a whole infrastructure of charging stations like pure electric cars, AND they allow the gas companies a stable transition period to other sources of power for vehicles (which would make the stock market happy).
Also, the last I heard, the hybrids were selling like hot cakes and the manufacturers haven’t been able to keep up. Maybe soon they will be all over Mississippi.
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L Rao said:
Hmmm… Vinod tries to throw us in a loop… his comments are self-serving or otherwise uninformed or just plain misguided…
As other have mentioned the Prius comparison lacks realistic numbers and the idea of going to ethanol and other biofuels is looking more like a political stance than a solution…
Solar is, though, a real alternative and I applaud him on that investment.
$100 oil may not happen anytime soon as a plateau that will be sustained. As I am sure some of the readers know the reserves in Calgary, Canada (oil sands) become profitable below the $40 range and there is enough there for 100 years of current US consumption.
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Scratch said:
Pretty short-sighted view. There wasn’t much of a market for LCD monitors when they cost hundreds of dollars more per unit either. But the demand for the technology drove manufacuring companies to reduce costs, and after a few years, viola, lower prices, and everyone gets one. The benefits of an LCD monitor or TV are great, lower energy costs, smaller footprint and longer life-cycle. A 100% electric car doesn’t have to be the same price, but once it’s close, it’ll be a no-brainer to recognize the real benefits. Electric will be more energy efficient, will have a longer life-cycle, and will cost less to support. Personally, I’d be happy not having an exhaust system or a radiator to replace. That’s worth a few extra bucks on the price to me.
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Brian Fields said:
well now we are getting somewhere!! So you didn’t care for the look and you question the viability of the vehicle. Now I can addressthis article as wel as the one you slammed the V1 in and thus created an onslot the likes of which you were not prepared for. First let me address a couple of items in this article. He say they won’t make a difference cause no one is buying them… Ok I can see that, Hell I don’t have one yet because I find them too expensive. However if you look at the V1 from that view point in comparison they are alot cheaper then the typical hybrids on the market today! Second, Let me say that many of the people I have talked to find the look and ability of the V1 quite refreshing and different. As for viabilty I am extremely confused about this one. Why do you feel it isn’t very viable??? If it is the matter of being a two seater, well lets see MR2 and Miata MX-5 are both collectible and have a huge following. Some are devout owners that refuse to buy anything else! yet they are two seaters. Is it the V1’s Fuel economy 100Mpg, if this is the question then I am really struggling to understand your comments! Is it the lack of a truck??? if this is it I have had a couple of different cars that the trunk was no bigger then a glove box! I want you to know I was extremely pissed over your article of V1, I think you lacked any true journalistic ability when you wrote that article! However, I think your pursuit of this topic is comical to say the least. Anyone in todays society that knows anything about the environment will step up and take notice of such vehicles. Also I think with the rising cost of gas many people today see more of a difference. For the most part the savings numbers don’t add up on hybrids yet but the V1 will probably pay for it self just in what you will save in gas. 100 MPG is a huge difference over just 50 Mpg and the savings will be more predominant. I personaly hope you take Ian’s offer and go see for yourself about the V1.
I just really don’t see your arguements against hybrids being based in reality! the people you have talked to are either sought out by you because they have stock in big oil for the soul purpose of tearing down hybrid technology or they are completely out of touch. You must see by know that Hybrids are the future! We as a nation need to step up to the plate when it come to our environment and the hybrid offers us that first step. The only conclusion I can come up with as to your complete lack of tolerance for hybrids is:
(a) you have stock in oil or some portion of you income is directly linked to oil.
(b) you don’t believe the Millions of scientist who say global warming is real!
(c) you make these outlandish reports in order to up the traffic to your site so you can keep your sponsors!
Matt I am sorry but the more I read your articles the more I realize just how out of touch you are with what is really going on. I pray that you can get those Bush Blinders off and go back to investagative reporting like you were supposedly known for at one point in your life. -
a friend said:
please stop being so denial, your becoming to be seriously annoying brother. please stop. if you cant beat them, join them.
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