Vinod Khosla: Hybrid-electric cars won’t make a difference

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.

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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.