The Combustion Engine Gets Downsized

Retired Ford (F) engineer John Coletti got a call in 2007 from Vinod Khosla, the Silicon Valley venture capitalist. Khosla, co-founder of Sun Microsystems, wanted advice on a new engine technology in which he was considering investing. A mutual friend suggested he contact Coletti, who had served as the chief of Ford's performance division. Coletti was skeptical that the design in question could deliver a promised 50 percent improvement in fuel economy. "Any time you hear about a new engine technology, you look for the Achilles' heel," the engineer said.

He pored over the EcoMotors International opposed-piston, opposed-cylinder (OPOC) engine. To his surprise, he concluded that it could perform as advertised. Coletti joined the company as president and chief operating officer in February 2008. Khosla and Microsoft (MSFT) founder Bill Gates were impressed, too, and together have invested $34 million in EcoMotors. They are attracted by a motor that, in theory, would allow a large pickup to achieve 27 miles per gallon. The company plans to license the technology to carmakers that would make their own OPOC engines, or manufacture and sell the engines through joint ventures.

Traditional engines have one piston per cylinder; EcoMotors' version has two. The design saves space and weight, allowing for a 95-pound engine that is one-third the heft of a small, conventional four-cylinder motor and 15 percent to 19 percent more efficient. Designed by Peter Hofbauer, a former Volkswagen engineer and founder of EcoMotors, the small, modular engines can be hooked together to power autos of different sizes. A pair would yield a 150-horsepower motor suitable for a midsize car like a Toyota (TM) Camry. When the car is coasting, one of the engines shuts down, delivering a 50 percent boost in fuel economy. That's a similar efficiency gain to what a hybrid gets, only EcoMotors says its model is less expensive. An OPOC engine will add roughly $600 to $900 to the cost of a vehicle, compared with an extra $3,000 for a hybrid, according to Don Runkle, chief executive officer of EcoMotors. Says Coletti: "This technology is disruptive to the industry."

The question is whether it will be so disruptive that manufacturers won't adopt it. The OPOC engine's flat, rectangular shape is different from that of traditional motors, which typically have vertical pistons in a taller, square block. The EcoMotors pistons are horizontal. To accommodate an OPOC engine, carmakers would have to overhaul assembly lines and redesign models. That would be a huge effort for automakers that already have billions tied up in current engine designs, says James N. Hall, principal of 2953 Analytics, a Birmingham (Mich.) consulting firm. "Engine plans are usually 10 years out," Hall adds. "They'll have to find someone who is willing to alter their plan." Coletti says that it takes $280 million to retrofit a factory and make it OPOC-ready, compared with $400 million to build a new plant.

Khosla emphasizes that EcoMotors has potential outside the U.S. Zhongding Holding, a Chinese auto-parts maker, has tentatively agreed to invest $18 million in the technology and has plans to build diesel and gasoline versions. In India, Khosla says, the hot car is a $2,500 Tata Nano subcompact. Increasing efficiency by adding hybrid-electric hardware could double the price the manufacturer can charge and put it out of the reach of most consumers. The EcoMotors design would be more cost-effective. "A lot of technologies have a 10- to 20-year payback," Khosla says. "This has a payback in the first year."

Runkle acknowledges, though, that it could be a couple of years before the engine is running in a saleable car. Finding early adopters will be critical. "Somebody will be very aggressive," he says. "I don't know who it is yet, but somebody will be."

The Bottom Line: Backed by Vinod Khosla and Bill Gates, EcoMotors plans a new engine that may appeal to automakers in India and China.

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