Even as many electric and plug-in hybrid vehicles near their launch dates -- foreshadowing the demise of the internal combustion engine -- a small Michigan company called EcoMotors is betting that fossil fuel engines are here to stay for a while, and that they could be much more fuel efficient (the same logic that is often used with clean coal initiatives). It just landed $18 million to make its case.
The company is currently developing an engine prototype (pictured right) that could improve fuel economies by up to 60 percent (achieving 100 miles per gallon), while halving the weight and size of standard gas and diesel-powered engines. Pairing high power density with compact size opens up a world of options for cheaper, more aerodynamic vehicles with vastly-extended driving ranges.
EcoMotors previously raised $2.75 million, partially from Khosla Ventures, in 2008. But this new $18 million is from two new sources: Chinese automotive supplier Zhongding Holding Group and Michigan engineering firm Global Optima. According to EcoMotors, both companies have been trying to develop similar technology on their own but finally decided to throw in the towel and invest.
In exchange for the money, Zhongding, will receive two prototype engines (one for gas and one for diesel) that it can use to demonstrate the technology to its customers to stir up interest. Global Optima will leverage its foothold in Shanghai to help both EcoMotors and Zhongding refine the technology for the Chinese market.
Founded in 2007, EcoMotors is representative of the type of company Michigan is desperately trying to attract and keep to buoy its foundering automotive-based economy. It has taken a total of $63 million from the Michigan Economic Development Corporation since its inception.
In a similar move last year, the state announced $300 million in tax credits to battery companies like A123Systems and Johnson Controls working on advanced automotive products. But these incentives have extended to the fringe of the industry.
The EcoMotors investment is in keeping with Bay Area-based Khosla Ventures' ongoing interest in the cleantech sector. Clearly, not enthused by electric vehicle ventures like Tesla Motors and Fisker Automotive, Vinod Khosla and his team have focused instead on how to make traditional automotive technology better.
Both EcoMotors and portfolio company Transonic Combustion are working on making existing engines more efficient. It also has a handful of biofuel companies in its portfolio, including Coskata, LS9 and Amyris Biotechnologies, all engineering microbes and catalysts to produce sustainable fuels that could work in today's car engines. The gamble here is that the big automakers will find revamped engines and drop-in green fuels more practical and affordable than the elaborate electric designs, battery solutions and charging stations that come with the electric vehicle movement.