You wouldnt, unless you a) needed someone to pay for the infrastructure to sell your product or b) you realized your product wasnt't too great at present, but smart persuasive people told you to expect your product to dramatically improve in the near future (cellulosic).  At least thats what I would expect Mr. Khosla to say.

That's exactly what he and his sycophants say. However, we don't need a massive infrastructure build out. We can't even fill the infrastructure we have. All the vehicles in the country can run on E10. But this would take triple the ethanol that we now make. So, I would suggest that they start building out more infrastructure once they begin to fully utilize what's already in place.

Wouldn't it be much more intelligent to promote diesel vehicles instead of E85-capable ones?  Diesels running B50 or B85 run at just about the same efficiency as straight diesel.  B85 can be pushed through the existing distribution system and burned in existing diesel cars and trucks without modifiction of any sort.

Question:  do manufacturers who make diesel cars also get the CAFE bonus like cars that can burn E85?

Wouldn't it be much more intelligent to promote diesel vehicles instead of E85-capable ones?

Absolutely, and I told Khosla this on the phone. His response was essentially that diesels are dirty, and market penetration is not great enough to make it worth his while. Well, isn't he trying to force market penetration of E85? I think he is just pushing the wrong technology.

Question:  do manufacturers who make diesel cars also get the CAFE bonus like cars that can burn E85?

I don't think so. If they do, I have never heard about it.