Khosla Ventures pumps funding into EcoMotors, an engine maker that promises a low-cost diesel engine that produces lower emissions and 100 miles per gallon.
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Spinoff wants to make diesel cleaner.
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CO2 emissions fall with new cars in Europe, but commission urges stepped up efforts.
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Manufacturers try to find the right shade of green as they develop the next generation of hybrids.
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DaimlerChrysler has recalled 58,000 two-seater Smart Cars in Germany because of a possible front axle defect.
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