Khosla Ventures on Friday said it has invested in fuel efficient diesel engine maker EcoMotors.

The move sets the stage for Vinod Khosla’s appearance at the Detroit Auto Show on Sunday.

“We’re focused on powering the automotive fleet of tomorrow with fuel efficient building blocks,” Khosla Ventures managing partner Vinod Khosla said in a statement.

EcoMotors promises to bring low-cost diesel engines that boast lower emissions and 100 miles per gallon fuel efficiency by 2011.

Khosla Ventures believes the timing is right for EcoMotors’ engine. The venture firm cites the market pressure of the recently enacted new Corporate Average Fuel Economy (CAFE) Standards law that will require auto makers to improve fuel efficiency by 40 percent starting in 2011 (see Senate Passes Energy Bill).

The venture firm also said that EcoMotors will benefit from more stringent EPA diesel emissions standards for 2010.

Financial terms of the Khosla Ventures investment were not disclosed.