GM to buy stakes in Khosla backed bio fuel company

By siliconindia   |   Wednesday, 16 January 2008, 00:50 IST
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Detroit, U.S.: General Motors, in an attempt to strengthen its environmental credentials, will buy a stake in Cosakaa, a biofuel company that says it can convert waste into ethanol for less than $1 a gallon. Coskata, backed by leading venture capitalist Vinod Khosla, plans to open a demonstration plant making 40,000 gallons annually this year, and a commercial biorefinery that can process 100 million gallons a year by 2011. For Rick Wagoner, CEO, GM, the priority is to link the GM technology to the biofuel. This will help GM boost its image as eco-friendly and help compete with Toyota Motor, whose gasoline-electric Prius is the world's top-selling hybrid automobile. "Our interest is as much about helping them be successful," GM Chief Financial Officer Fritz Henderson said in announcing the investment at the North American International Auto Show in Detroit. "We're not going into the ethanol business," he added. Khosla, who attended the announcement, said that investments like GM's will help call attention to advances in the technology but declined to discuss the size of GM's stake or that of other investors. Wagoner is promoting fuel that's 85 percent ethanol as a way to reduce U.S. reliance on foreign oil. He's promised to double production of GM models that can use the fuel, known as E85, to 800,000 by 2010 and have half of all models ethanol capable by 2012. GM said it will use the fuel in test vehicles by the end of this year. Coskata, founded in July 2006 and based in Warrenville, Illinois, will share research with GM, which will cooperate to market the fuel, known as cellulosic ethanol.