The Bill Gates and Khosla Ventures dream team are swooping in once again to provide much-needed cash to a worthy sustainable startup. The pair recently injected millions into nuclear power startup TerraPower, and now they’re back again to invest $23.5 million in EcoMotors’s series B funding round.

EcoMotors builds a lightweight, high-efficiency, low-cost combustion engine that supposedly offers 50% greater fuel efficiency than similar conventional engines. The company’s Opposed Piston Opposed Cylinder (OPOC) engine can be used in everything from passenger vehicles to auxiliary power supplies–anywhere traditional gas and diesel-powered engines can be found.

The Troy, Michigan-based company has an impressive history. CEO Don Runkle led GM’s EV1 electric vehicle project in the mid-1990’s, and CTO Peter Hofbauer designed VW’s high-speed diesel engine, which ultimately developed into the Jetta Clean Diesel’s engine.

EcoMotors is moving quickly toward commercialization, too–by 2011, the company hopes to have a 100 MPG diesel engine ready for five-passenger vehicles.

So why did Gates and Khosla opt to invest in EcoMotors instead of an electric vehicle manufacturer? For practical reasons, most likely. EV’s are far from becoming widespread in the U.S., and EcoMotors is focusing on developing markets that are even further from large-scale EV commercialization. We need to cut down on carbon emissions and petroleum use now, not 5 or 10 years from now when an EV infrastructure is in place. EcoMotors recognizes that–and so do Khosla and Gates.

[EcoMotors]