Google said Wednesday it is accepting investment proposals for technologies that could help bring plug-in hybrids and electric cars to the market, along with technologies to transfer electricity from these vehicles to the grid.

The search giant's nonprofit arm,, plans to invest a total of $10 million in these technologies, divided into chunks of $500,000 to $2 million. The recipients must be early stage ventures with the potential to play a key role in widespread adoption of plug-in hybrids, electric cars or vehicle-to-grid technologies, according to the initiative's Web site.

The same day, electric-car startup Tesla Motors and San Francisco-based utility Pacific Gas and Electric announced they are partnering to develop a "smart charging" technology that would vary the amount of electricity going into charging an electric vehicle, depending on the grid's needs (see Making Electric Vehicles More Grid-Friendly).

Other companies announced advances in clean-diesel and fuel-cell technologies, which are not eligible for investment.

"We're seeing lots of activity; awareness of environmental issues is growing considerably," said Thilo Koslowski, a vice president and lead automotive analyst at Gartner. "Google is fueling further growth for fuel efficiency. And that's pretty exciting from the technology side, but also from the business side."

The announcement from Google is another sign that greener car technologies are gaining traction. And the company is not the only one luring startups with cash. The Automotive X Prize in April announced it also will ante up $10 million for a production-capable car that exceeds 100 miles per gallon, and in August said the announcement had already attracted 30 teams that intend to compete for the prize.

"This phase of companies exploring alternative fuels and trying to make a difference feels so much stronger than anything I've seen in the past because it is coming from so many different angles, industries and companies," Koslowski said. "It will be more of a success because, while last time it was mandated by the government, this time it's more of a movement than a mandate."

Other Alternatives

But green-car innovations aren't limited to the plug-in hybrids and electric cars that Google is focusing on.

For example, at the Frankfurt Auto Show on Wednesday, DaimlerChrysler announced it would begin production of a fuel-cell car in early 2010, under its Mercedes-Benz brand.

The 136-horsepower car will consume the hydrogen equivalent of 2.9 liters of diesel fuel for every 100 kilometers it drives, the company said.

Fuel cells produce power by mixing fuel with air and water between a thin, reactive film membrane to produce an electrochemical reaction. Companies have been promising fuel-cell cars for decades, but the cars have not reached mass production because of significant business and technical challenges, including high costs, storage difficulties and heat and water management, among other things.

Koslowski said he thinks Google is looking for quicker investments. "Even though Mercedes-Benz says it's something that will come out in 2010, it will take time," he said. "It won't be something that appears across the whole line by then. So I think Google is interested in funding something where we can see actual results in the next few years."

On the other hand, diesel technologies could meet that goal, he said.

Ricardo, a Michigan-based transportation company, announced Wednesday it has achieved a breakthrough that could drastically cut diesel emissions. While diesel already gets more miles per gallon than gasoline, the fuel is unpopular in the United States because of its higher nitrogen-oxide emissions.

According to Ricardo, early simulations and test results show its diesel engine could achieve nitrogen-oxide levels of less than one-tenth of European requirements.

Koslowski said he thinks clean-diesel technologies could have a good chance of making an environmental impact, despite being left out by Google.

"Diesel would be a technology I would want to convince Google to fund as well," he said. "Of course, it's not something consumers are very aware of, but diesel technology is here and is coming out in the next few years."

Making a Difference

Dan Reicher, director of climate-change and energy initiatives at, said the current focus on plug-ins doesn't mean Google won't be looking at other technologies in the future.

"We believe plug-in hybrids offer potentially very large opportunities to save energy and to cut greenhouse-gas emissions using relatively straightforward technology," he said, adding that Google's own fleet has been getting about 70 miles per gallon, compared to between 40 and 45 miles per gallon for the company's regular Priuses.

"So this is where we've decided to begin. We may get to other [technologies] down the road, but for now, as a young organization, it's important to focus and find something could have major near-term impact for climate reductions and energy savings."

Even though $10 million certainly isn't enough to bring new car technologies to the streets, Koslowski said the money still could make a significant impact.

"Ultimately, car companies have to embrace these technologies, but in order to get there, companies have to understand the technology, which is not that expensive," he said. "You can't take care of production issues with $10 million, but the innovation, the brilliant ideas, that you can take care of with $10 million."

The question is whether the research and development the $10 million buys is enough to convince the car industry - which is still somewhat reluctant to embrace these technologies - to move ahead, he said.