Detroit Auto Show: Instant Karma’s going to get you?

At last year’s auto show, I wondered whether Karma could also mean “covering all bases.” A main investor in Fisker Automotive, which makes the all-electric Karma, is Vinod Khosla, an important player in the next phase of the auto industry — whatever form that may take.

Khosla is a major Silicon Valley venture capitalist who has also bankrolled the building of ethanol infrastructure. Remember ethanol? Michigan Gov. Jennifer Granholm was going to create an “ethanol economy” in Michigan not too long ago.

Well, recently Khosla tossed a couple million to an Ann Arbor startup called Sakti3, which is developing lithium-ion batteries that, according to the Detroit Free Press are more advanced than those that GM selected for the Chevy Volt.* The Michigan Economic Development Corp. recently kicked in $3 million and the Granholm administration gave it more than $2.4 million in tax credits over 10
years.

So, when a venture capitalist gives money to cover all bets, he’s diversifying, I suppose. When the state government does it, is it just chasing after the flavor of the day? I do not know the answer.

However, I did ask a question of somebody who does have an answer. Accompanying the Karma this year was also the all-electric Tesla. A major investor of the Tesla is Steve Jurvetson, another West Coast VC. It seems like both companies represent a West Coast scouting party by Silicon Valley geeks to see if Motown is ripe for conquering.

I asked Jurvetson whether the auto industry finally “gets it,” whether there’s hope for the Big Three now that they are developing their own all-electric vehicles. His answer:

“All disruptive innovation comes from new entrants,” Jurvetson wrote to me. “Always has. Always will. So I’d keep my eye on the startups for change that matters.”

In other words, whether it’s death by ethanol or death by electricity — the Big Three are still dead? Well, Jurvetson is an interested party, so we can take that into account. However, it might be good to cover all our bases and not make any predictions yet. In this case, Karma is not instant.

Howard Lovy has been a journalist for more than 20 years, and has focused on science, technology and business for most of this decade. His reporting on automotive innovation and nanotechnology has earned praise for making complex issues understandable to nearly everyone. He has worked, among other places, for The Detroit News, ClickOnDetroit.com and helped found Small Times, an Ann Arbor magazine focusing on nanotechnology and microsystems. His freelance work has
appeared in the Wall Street Journal, Wired News and Salon.com.

[* Ed. note: paragraph has been revised to correctly attribute the comparison to the Detroit Free Press. Michigan Messenger apologizes for any misunderstanding. (27-JAN-09)]