The race to launch a 100-mile-per-gallon (42 km per litre; on the US scale 3.8 litres = one gallon) car the world over is hotting up, even as Ratan Tata has lowered the global bar for launching the cheapest car that should deliver around 20 kmpl.

The participants range from an IT giant like Google to prominent venture capitalists like Pune-born Vinod Khosla -- founder of Khosla Ventures.

Also one of the co-founders of Sun Microsystems, Khosla is betting big time on start-up green ventures. Driving a Lexus Hybrid himself, he has made at least 10 bio-fuel bets over the last 15 years.

For instance, in 2006, Khosla had invested around Rs 800 crore (Rs 8 billion) in Cilion Goshen (a company that converts corn into ethanol to power cars and trucks), and around Rs 120 crore (Rs 1.20 billion) in Mascoma Corporation, a producer of biofuels from lingo-cellulosic biomass using micro-organisms and enzymes.

On January 12, he made an investment for an undisclosed amount in EcoMotors -- an automotive company with a focus on fuel efficiency, low emissions and cost-effective solutions for developing markets.

EcoMotors has developed an innovative diesel engine that is aiming at delivering 100 miles per gallon (mpg) by 2011.

Vinod Khosla is targeting the rising demand for cars in developing countries, including India. "We're focusing on powering the automotive fleet of tomorrow with fuel-efficient building blocks," he said.

"This investment complements our company's other investments in the engine space. The companies we have invested in are at the forefront of forming a serial plug-in hybrid platform with our multiple investments in the new battery technology," Khosla added.

Meanwhile, several small companies are developing new engine technologies and advanced automotive designs that promise to deliver the 100-mpg promise. The proposals run from the simple reduce weight, improve aerodynamics to borrowing ideas from jet engines.

Meanwhile, Google.org is modifying gas-electric hybrid vehicles like the Toyota Prius to try to breach the 100 mpg threshold. The project, called Recharge IT, is collaborating with other companies and researchers, including Pacific Gas & Electric.

They have handed out $1 million in grants to think tanks, educators, advocacy groups and researchers to advance the hybrid cause. Another $10 million is available to researchers who offer worthy proposals.

RechargeIT is a Google.org initiative that aims to reduce CO2 emissions, cut oil use and stabilise the electrical grid by accelerating the adoption of plug-in hybrid electric vehicles and vehicle-to-grid technology.

The new Corporate Average Fuel Economy (CAFE) standards in the US will require all manufacturers to improve fuel economy by 40 per cent, beginning 2011, and the 2010 Environmental Protection Agency (EPA) standard is forcing all diesel manufacturers to invest heavily in the new emission technology.

The real challenge, though, is creating a consumer-friendly car that's attractive, reasonably-priced and capable of delivering the 100-mpg promise, according to experts.

The race has become more intense with the X Prize Foundation -- the group that kickstarted the space-tourism industry with its $10-million competition to produce a reusable private spacecraft -- announcing an estimated $25 million (around Rs 1 billion) prize for the 100-mpg car. The participants can use different types of fuels -- natural gas, ethanol, diesel or even electricity.

Entrants are expected to use strong, lightweight materials such as aluminum, carbon fibre and magnesium to lighten the car's body, electronics and wheels. Various types of lightweight glass and composites are being developed for the purpose.

Aerodynamic designs and low-resistance tyres would decrease drag (can decrease handling too); and improved insulation would reduce the need for heating and cooling systems, which would cut down on weight and save fuel, though the Automotive X Prize requires entrants to have some sort of air-conditioning system as well as a stereo. The results will be out by 2009-end.