Microsoft founder Bill Gates is betting $23.5 million on a promising new engine technology, the opoc.

He’s better known as a tech guru – and, since his retirement from Microsoft, as a mega-philanthropist.  But Seattle billionaire Bill Gates is now betting on what some have described as a revolutionary new automotive engine technology.

Gates is one of two new principal investors in EcoMotors, a suburban Detroit start-up that is developing a technology called the opoc motor.  Short for opposed piston-opposed cylinder, its developers claim it can run on either regular unleaded gasoline or diesel and not only boosts fuel economy but also reduces the number of parts needed compared to a conventional gas or diesel powertrain.

The Microsoft founder is putting up $23.5 million in two-year-old EcoMotors.  He is joined as a new investor by Khosla Ventures, a major investment firm from Menlo Park, California.  The Silicon Valley venture capital firm’s founder, Vinod Khosla, was one of the co-founders of Sun Microsystems.

The new engine “can be an important step in providing affordable, low-emissions transportation for the developing world,” said Gates, explaining his involvement in the EcoMotors project.  He has steered a significant share of his Bill & Melinda Gates Foundation cash to third-world projects, such as the elimination of malaria.  But his personal involvement in the auto industry – beyond Microsoft’s push into auto technology – is new.

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EcoMotors’ appeal is twofold.  There’s the new technology, and a set of old names.  The venture is run by one-time General Motors wunderkind Don Runkle, who left the maker to work at its parts spin-off, Delphi Corp., before venturing out on his own.  He serves as CEO, while John Coletti, best known for his work on Ford Motor Co.’s performance vehicles, is president and chief operating officer.  The basic design of the opoc engine, meanwhile, was developed by Peter Hofbauer, former head of powertrain development at Volkswagen AG.  Hofbauer is EcoMotors chairman.

An opoc engine is half the size and weight of a gas engine, with less than half the parts.

That distinguished cast has earned credibility for a company going up against a well-entrenched production base for conventional engine technology.  Over the decades, inventors and entrepreneurs have proposed a variety of alternatives to the long-lived internal combustion engine, including the Wankel rotary – today used in only limited application by Mazda – the Stirling engine, and Orbital’s two-stroke.

Each of these technologies has either proved lacking in some key area – the rotary short on mileage, the Orbital unable to meet emissions standards – or simply unable to offer enough of an advantage to justify replacing billions of dollars of investments already laid down for conventional powertrain production.

But the opoc appears to have some solid advantages that is getting the technology some serious attention.  EcoMotors claims the engine can yield up to 50% better fuel efficiency than a conventional gasoline powertrain, with a comparable reduction in greenhouse gas emissions.  An opoc, meanwhile, is half the size and half the weight, with half the parts of a conventional gas engine.  That, EcoMotors projects, should mean lower costs for tooling and production.

“It’s a better mousetrap,” contends Runkle, who suggests that the technology could be put into production within the next several years.

(Click Here for more on the opoc engine.)

The former GM vice president says he carries a small version of the opoc in his briefcase which is powerful enough to power an entire home.  That suggests that the technology could find applications beyond the auto industry.

Along with the new venture funding from Gates, EcoMotors has a request pending for a $200 million loan from the Department of Energy, which has been sponsoring a number of efforts to develop clean, high-efficiency powertrain technologies.

Other recipients include Tesla Motors, the California-based electric vehicle manufacturer that recently launched an IPO, and Fisker Automotive, another Golden State firm planning to produce plug-in hybrids.

Coincidentally, all three firms hope to launch production at former General Motors facilities.  Tesla recently announced it is taking over the NUMMI plant, near San Francisco, long run as a Toyota-GM joint venture.  Fisker has acquired an abandoned GM plant in Delaware.  And EcoMotors hope to produce the opoc at an old GM engine plant in Livonia, Michigan.

But those other two start-ups suggest another challenge for EcoMotors.  While few experts believe the internal combustion engine will go away any time soon, electric powertrain technology is getting the spotlight right now – and a significant share of the new capital flowing into the auto industry.

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