Here's part of what I posted to CalCars-News:

The New York Times report below somewhat unexpectedly breaks the story that Google.org, the philanthropic arm of Google (able to both give grants and invest in for-profit enterprises) is planning to take a leading role in helping to commercialize plug-in hybrids. The staff of the new organization has been in touch with the principal "players" in the PHEV world, and we expect they will make a range of announcements in the coming months.

http://www.nytimes.com/­2006/­09/­14/­technology/­14google.html

Philanthropy Google's Way: Not the Usual The New York Times, September 14, 2006 By KATIE HAFNER

CAPTION: Dr. Larry Brilliant, the executive director of Google.org., used to have concerns about the new foundation's for-profit status.

SAN FRANCISCO, Sept. 13 - The ambitious founders of Google, the popular search engine company, have set up a philanthropy, giving it seed money of about $1 billion and a mandate to tackle poverty, disease and global warming.

But unlike most charities, this one will be for-profit, allowing it to fund start-up companies, form partnerships with venture capitalists and even lobby Congress. It will also pay taxes.

One of its maiden projects reflects the philanthropy's nontraditional approach. According to people briefed on the program, the organization, called Google.org, plans to develop an ultra-fuel-efficient plug-in hybrid car engine that runs on ethanol, electricity and gasoline.

The philanthropy is consulting with hybrid-engine scientists and automakers, and has arranged for the purchase of a small fleet of cars with plans to convert the engines so that their gas mileage exceeds 100 miles per gallon. The goal of the project is to reduce dependence on oil while alleviating the effects of global warming.

Google.org is drawing skeptics for both its structure and its ambitions. It is a slingshot compared with the artillery of charities established by older captains of industry. Its financing pales next to the tens of billions that the Bill and Melinda Gates Foundation will have at its disposal, especially with the coming infusion of some $3 billion a year from Warren E. Buffett, the founder of Berkshire Hathaway.

But Google's philanthropic work is coming early in the company's lifetime. Microsoft was 25 years old before Bill Gates set up his foundation, which is a tax-exempt organization and separate from Microsoft.

By choosing for-profit status, Google will have to pay taxes if company shares are sold at a profit - or if corporate earnings are used - to finance Google.org. Any resulting venture that shows a profit will also have to pay taxes. Shareholders may not like the fact that the Google.org tax forms will not be made public, but kept private as part of the tax filings of the parent, Google Inc.

Google's founders, Larry Page and Sergey Brin, believe for-profit status will greatly increase their philanthropy's range and flexibility. It could, for example, form a company to sell the converted cars, finance that company in partnership with venture capitalists, and even hire a lobbyist to pressure Congress to pass legislation granting a tax credit to consumers who buy the cars.
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Dr. Brilliant likens the traditional structure of corporate foundations to a musician confined to playing only the high register on a piano. "Google.org can play on the entire keyboard," Dr. Brilliant said in an interview. "It can start companies, build industries, pay consultants, lobby, give money to individuals and make a profit."

While declining to comment on the car project specifically, Dr. Brilliant said he would hope to see such ventures make a profit. "But if they didn't, we wouldn't care," he said. "We're not doing it for the profit. And if we didn't get our capital back, so what? The emphasis is on social returns, not economic returns."

Development of ultra-high-mileage cars is under way at a number of companies, from Toyota to tiny start-ups. Making an engine that uses E85 - a mixture of 85 percent ethanol and 15 percent gasoline - is not difficult, but the lack of availability of the fuel presents a challenge, said Brett Smith, a senior industry analyst at the Center for Automotive Research in Ann Arbor, Mich.

Another barrier, Mr. Smith said, lies in the batteries for so-called plug-in hybrids, which require more powerful batteries that charge more quickly than the current generation of hybrid batteries.