I would phrase it differently: It is a matter of betting on which technology will be cost effective first; biofuel technologies, or batteries for electric cars?
Diesel cars are a proven technology - a great option ready to go. Electric motors are already 90%+ efficient, though too expensive. But the race ultimately becomes one of biodiesel vs batteries. Biodiesel from food crops is a competitive option at about $3 per gallon, but we could never produce enough to supply the entire US petro market. It also puts food into direct competition with energy. The key to practical, carbon-neutral fuel sources will be second generation biodiesel fuel sources - fuel obtained from algae or other organisms - or third generation sources such as bioengineered algae or bacteria, not food crops
To the best of my knowledge, the limits on battery technology are fundamental. Advances in battery technology may or may not follow a similar price/capacity curve as we saw with integrated circuit technology. Such a curve is implied anecdotally, but we don't know when we will see the next significant advances or how significant they will be. While we may see great advances in the future, it is also conceivable that we are approaching a limit and the next great advances will never come.
With advanced fuel technologies, the limits seem to be more a matter of engineering and applied biology, and not a matter of making fundamental advances. Therefore, I think the most logical bet is to drive towards advanced fuel technologies and the use of clean diesel cars over the next ten years. There is already plenty of impetus in the market to incentivize advances in battery technologies, so allow that to drive the electric car option rather than driving it artificially.