PETER HORTON
TALKS ABOUT HIS
ELECTRIC CAR
PETER HORTON
TALKS ABOUT HIS
ELECTRIC CAR
I consider myself a reasonable man. As such I tend to expect others to behave with a modicum of reason and common sense. Especially those with power.
It was with this perspective in the spring of 2001 that I watched in shock as 30 years of environmental protection were being methodically dismantled. From the Clean Air Act to the Clean Water Act to global warming initiatives you name it, it was being killed. As my shock plummeted into a sense of powerlessness, my gaze drifted past the porch rail and landed with a thud on our family car. A big, fat, gas-guzzling SUV. Just sitting there taunting me.
Like a slap I realized I was one of them. The UNreasonable ones. So I made a decision. A radical decision. I decided to go electric. I had seen those sleek, sort of George Jetson EV1s shoot by me with surprising speed on the freeways. I thought, fine, I'll get an EV1. But as I lifted the phone to make the call, I had no way of knowing that this simple, reasonable act was my first step into the electric car wars.
In 1990, California found itself in danger of losing federal highway funds if it couldn't find a way to meet air quality targets set by the Clean Air Act. As the California Air Resources Board searched the hazy landscape for relief, its eyes landed on a prototype electric car coming out of GM called the Impact, to which Johnny Carson cracked, "What's next, the Ford Whiplash?" So the air resources board proposed a mandate that by 1998, 2% of cars sold in California would be zero-emission vehicles. By 2001 that would increase to 5%. And by 2003 a whopping 10% of all new automobiles sold in California would be emission free.
GM's first response was to dive in. The company committed millions of dollars and teams of designers and engineers, who emerged six years later with a sleek rocket ship of an electric car renamed the EV1. It then set out in search of a sales team, one that was not only good at selling cars, but that had the patience and passion to educate an interested but suspicious public. It ended up with a group of men and women in their 20s who were almost all single, determined and enthusiastic about the electric car. GM titled them, rather dryly, "EV specialists." By the time I met them five years later, they could be more aptly called "the Subversives." They were battered and bitter, but fighting with almost religious fervor against GM, the company that had recruited them, for the survival of the EV1.
The result of my call to Saturn, through which EV1s were being sold, was a dismissive letter basically saying there's no way in hell you can get one of these cars. I was welcome to join their waiting list, along with undisclosed others, for an indefinite period of time, but my chances of getting a car were slim since they also informed me that they weren't planning to make any more.
That didn't seem logical. If the cars were so great that there was a waiting list, wasn't that a good thing? Didn't the waiting list suggest a market, especially if it were a long list? (I would find out later it was a few thousand.) Clearly I needed to learn more, so I decided to pull whatever strings I had.
The first string led to actor/director Hart Bochner, an enthusiastic EV1 owner, who immediately hopped into his car and came whirring up to my house for a test-drive. The first thing you notice with one of these cars is what's missing. There's virtually no sound. Just the slight hum and quiet clicks of the brakes. Second, there's no exhaust. No fumes come wafting by like a wake chasing a motorboat. Then, when you get behind the wheel, there's no lag between pedal and power, and boy, does this car have power. With no gears to complicate acceleration, you get that launched sort of feeling, a childish giddiness the Subversives called "the EV smile."
After a brief but invigorating spin around the neighborhood, we hummed to a stop in front of my house. Hart bounced out of the car like an Amway salesman, pamphlets in hand, already well into his pitch about how hard these cars are to get and how frustrated he was that GM and the oil lobby were trying to kill the EV1.
"But wait a minute," I said. "I guess I can understand why the oil lobby would try and kill it, but why GM?"
"I don't know," he said, "but they are."
When GM first launched the EV1, it was to mixed reviews. The cars were expensive, the infrastructure was minimal, there were constant breakdowns and, worst of all, the advertised range of 70 to 90 miles per charge was in reality about 50.
As one of the Subversives put it, "They had this battery pack that was worthless. And they knew it from the get-go. I mean, why were we releasing this car, with these batteries, when we knew it didn't meet our specifications?"
Needless to say, the reaction from consumers was chilly. By March 1997, the cars were stagnating on showroom floors and GM was making more vehicles than it was leasing. So after the initial batch of 648 Generation I cars, GM shut down the assembly line.
The Subversives, who all had high expectations for the EV1 and its potential to change the automotive landscape, also had a deep distrust of GM. So when GM shut down the plant, the Subversives, who didn't feel that the company had given the car a chance to succeed, dug in their heels and the war began.
The Subversives designed, printed and distributed their own brochures, took over all event marketing from the company GM had hired, and decided to go after their celebrity customers, who they knew would talk about the car publicly.
Subversive No. 1: "We knew we had to show GM the product they were asking us to sell was worth making. But we knew at some point GM was going to get behind this. It had to. It was just too great a car."
By the spring of 1999, the Subversives had done it. They had leased all 648 cars. And word was getting out, with requests for cars starting to flood in. Still, GM didn't reopen the plant. The Subversives got frustrated.
Subversive No. 1: "We had leased every car we had. We were begging for more. GM would say, 'If there's demand we'll build you more cars.' We'd say, how do you, GM, define demand? Tell us what you want and we will give it to you. How many is demand?"
Subversive No. 2: "We were on the front line, talking to the people who wanted the cars. GM would say, 'We don't see the demand is there.' The fact that 10 new people committed to leasing a car today was anecdotal to them. I mean, how could we determine if there was or wasn't a market if there wasn't enough product to sell those present buyers?"
With no more cars to sell and demand rising, the Subversives took the initiative and started a waiting list.
Hart gave me the name and number of "the insider," the EV specialist I would have to talk to if I had any hope of getting a car. She turned out to be a woman named Deborah Anthony, a bright, cheery, likable person who always spoke as if she had a secret. In fact, as I got to know the Subversives, I found they all spoke that way. She told me it was a longshot, but she'd see if anyone in Detroit was a fan of mine from, say, "thirtysomething" or some other project. I laughed. Then I realized she was serious.
For the next two months, I badgered and begged Deborah for my car, peppering her with questions about why these cars were so hard to get, why GM wasn't making more, didn't they see there was a market? Her responses were patient but cryptic: Always the company line, but with a telling tone of voice or random comments that would slip out. Never the words but the music: parts unsaid that left me feeling this ship I was trying to board was well on its way to sinking.
Finally, one afternoon she called to tell me she had been offered another job. She thought it wise to take it rather than face the firing she was sure was right around the corner. Firing? "Oh, yeah. For all of us." Then quickly, "But don't worry. That doesn't mean you shouldn't get a car. In fact, I have some good news I think. People in Detroit are fans! I think you're going to GET A CAR! Oh, and the person replacing me? You'll love her. Her name is Chelsea Sexton. She's even more passionate about the EV program than I am."
And Chelsea Sexton was. A tall, willowy, kind of crunchy woman, she assured me I'd get a car if she had to give me hers. In spite of the downsizing, she was determined to fight, and she so respected those of us like Hart, Ed, Ted, Mel "Mel who?" I asked. "Gibson!" she replied. "Do you know him?" Not wanting to jeopardize my chances of getting a car, I said, "Oh, yeah," as if we were good friends, even though I've only met the man once or twice.
"By the way," I said, "I'm not going to wake up one morning abandoned, am I? With you and the rest of your support team gone, a three-year lease on a prototype car with no support, no one to fix it, no one to explain this thing's behavior when it doesn't act like a normal car?" She just smiled and with a tilt of her head said, "I'm not going anywhere. They're gonna have to drag me out kicking and screaming. Plus, you guys are pioneers. You're leading the way into the future. I just love that." Well, that was it. I wasn't going to let Hart or Mel be pioneers while I stayed back with the herd.
By the fall of 1999, the Subversives were feeling optimistic: There was talk of the much-improved Generation II EV1, which featured an advanced battery. GM and the state of California were starting to make headway with the infrastructure, placing charging stations throughout the state, and subsidies were kicking in, which brought the monthly lease payment in L.A. County down to a reasonable $275 a month. But GM had a problem. They had been able to persuade the air resources board to give them a pass on the 1998 2% requirement for zero-emission cars as long as they could get 186 Generation II vehicles on the road by the end of '99. It was now November, and after much delay, the cars had finally arrived a year's worth that not only needed to be leased but on the road by New Year's Eve.
The Subversives dove in. They worked straight through Thanksgiving and Christmas, 14- and 15-hour days, seven days a week. They even came up with an incentive system where each hour they would leave an update on their common voicemail so that everyone knew what was going on.
Subversive No. 3: "You'd check your voicemail, and there were like 10 deliveries that day. It was so exhilarating. Especially because no one thought we could do it. Nothing was going to stop us."
And just hours before New Year's, they leased and delivered the last of the 182 cars. They were elated. Subversive No. 2: "That was our most hopeful. We had real traction then."
But the silence from the top was deafening. Finally, GM's EV1 brand manager, Ken Stewart, sent out a letter: "I want to personally thank you for the wonderful job . . . Your efforts and results were absolutely outstanding. . . . You were a part of one of the highest performing teams I have ever had the pleasure to work with." The use of the word "were" didn't escape them.
Subversive No. 3: "We never knew if GM was really happy that we delivered all those cars or if they were really upset about it." Then came the announcement that confirmed their worst fears. GM announced it was only going to make a total of 500 Generation II models and then it would once again shut down the assembly line.
What was becoming clear to the Subversives, and anyone interested in the future of the EV1, was that it only had a future as long as there was a mandate. And the mandate was starting to crumble. The 2% and 5% zero-emission requirements had been eliminated entirely, and the 10% requirement for 2003 could now include low-emission gasoline vehicles.
According to former state Sen. Tom Hayden, this was how GM played the game: "They embarked on a scheme of apparent cooperation while concealing their complete disdain for and resistance to mandated change. They didn't flat out say no; they complained that it would be very difficult. Then they sought the extension and wanted to broaden the definition from electric vehicles to low-emission vehicles. All reasonable-sounding adjustments, at least in comparison to saying no. In fact, this is the new way of saying no. Deadlines have to be pushed back, not because we're stalling but because we're cooperating. In fact, we're happy to cooperate with you. Then in the end, the ultimate trump card is, the public doesn't want it."
On Feb. 23, 2001, GM filed suit against the state of California, claiming that the production requirement involving electric cars illegally ignored cheaper and safer options. For the Subversives this was a knockout punch. The immensity of what they had been up against suddenly registered.
Subversive No. 1: "The feeling among the group had been, 'We can make them do this.' How naive was that? We're going to make the biggest company in the free world do something they don't want to do. If we can just make a big enough case and get enough visibility to the project."
GM told the Subversives to stop taking names on the waiting list and to not admit there ever was one, as GM's primary argument in the lawsuit claimed there was no demand.
It was now July 2001. Still no car. But in spite of the delay, in spite of the shaky outlook for this car, I still wanted one. Maybe it was because President Bush was still assaulting the ecosystem, or maybe I just couldn't let go of the thrill I had felt driving Hart's EV1.
So when I finally got the call, I was thrilled, I think. On the other end of the line was a frenetically chirpy voice: "Hi, it's Chelsea. They said yes! You're getting a car. Well, actually, you're getting my car, which is the silver, what you wanted right? And ah you're actually getting my car because I've been ah well, 'let go.' But don't worry, 'cause I'm not gone until the end of September, which will give us plenty of time to set everything up. Oh, by the way, they asked if you were interested in a shorter lease, two years instead of three. I told them no. You definitely wanted three."
"Ah, ah of course," I replied with as much confidence as I could muster. Five months of trying, not only two but now three EV specialists this was a lot for even a tree-hugger like me. This had gone from being illogical to being unreasonable. It was time to call GM and find out what was going on directly from Goliath's mouth.
The only name I had was EV1 brand manager Ken Stewart. The only phone number, a general GM listing in Detroit, Mich. The operator answered after the second ring. "Yes, I'd like to speak with Ken Stewart please." "Who's calling?" "Well, um, my name is Peter Horton and I'm writing about the EV1. . . . " "Hold please." After a few moments, "Yes, he'd like you to call Dave Barthmuss over at public relations." "Dave who?" "Barthmuss, B A R T. . . ."
Dave Barthmuss was a polite, swizzle stick of a PR man, charming and direct without divulging very much.
Me: "Why did you guys decide not to continue with the EV1? It's such a great car."
Dave: "The big issue was we could only lease about 700 cars in the first four years."
"But you only made 648 cars in the first four years. How could you lease more if you didn't make more?"
"If we had leased more, we would've made more."
"That doesn't sound like a very aggressive marketing approach."
"If there had been a market, we would've been more aggressive."
And so on. Finally he told me he had no problem letting me talk to Ken.
I liked Ken. His opening statement was, "GM is still very bullish on the tech side of this car. The more you learn, the more gee whiz there is in it. The problem is the batteries."
Somehow the use of the phrase "gee whiz" without irony made me think he was a decent guy.
"What's wrong with the batteries? The ones in my car seem to work fine."
"Do you know how much it costs to replace those batteries? A lot."
"Yeah, but doesn't it cost a lot to replace a transmission or an engine in a traditional car?"
"Not as much as you'd think. An engine's only a couple hundred."
"That's because you mass produce them?"
"Well, that and other factors."
"If you mass produced the batteries, wouldn't their cost come down?"
"Yeah, but we're not."
"Why not?"
"Because there's no market. No one wants an electric car."
And there it was. That pedal tone of a refrain. Is there or is there not a market for this car?
"So when did GM lose faith in the EV1?"
"We haven't lost faith in it. The problem is nobody wants it."
"What about the waiting list?"
"What waiting list?"
"I've been told by some of your former employees there's a waiting list of a few thousand people."
"We don't have a waiting list. We have an information list. People who are interested in the car."
"Well, how do you know there's no market if you've never mass produced it and launched it with comparable numbers and dollars to other launches like, say, Saturn?"
"If there had been a market we would have."
I took a deep breath.
"OK, in 1990, when [then-GM Chairman] Roger Smith proposed an electric vehicle, GM's plan was to produce 25,000 cars per year. By 1996, when the car was finally ready, that number had been reduced to 1,500 before you'd sold one car. Before you knew if there was a market or not. What happened?"
A beat of silence. Then, "You're asking the wrong question."
Huh?
"There were so many duties for the customer above and beyond turning the key. Getting a 220-volt electric line and box put in your house, which meant city permits. . . ."
He then went on to talk about "days supply of vehicles" and "share of voice versus share of market," and as he spoke I realized I wasn't going to get a satisfactory answer from Ken Stewart or Dave Barthmuss or anyone at GM on when or why they lost faith in the EV1. Why they put so much money and effort into creating such an extraordinary automobile and then turned around and slowly choked the life out of it. Finally, he stopped and hesitantly asked, "So what's your take on this?"
What's my take? That's a very good question. I know one thing for sure it's complicated. Some have said that GM made the EV1 to prove electric cars won't work. Ken Stewart's response is, "If that was our aim we never would've made such a great car."
And he's got a point. These days, as I slide behind the wheel of my EV1 and set off to navigate the streets of Los Angeles, environmental and political aspects get lost in the sheer aesthetics and excitement of the drive. It truly is a great car.
So what happened? Was there really no market? As former GM CEO Robert Stempel said when I reached him at his new job at Energy Conversion Devices, which manufactures batteries used in electric vehicles, "We all know it takes some time for a new product to catch on. Especially if it's something as new and radical as the EV1. I mean, Saturn wasn't a moneymaker when it first came out. But after some time and good marketing, it's become profitable."
Time and good marketing. The EV1 was launched in December 1996 and production stopped in March 1997. Only four months. And the marketing was hardly on the level of Saturn.
Tom Hayden: "Our mistake in the beginning was believing that by mandating it, making it necessary and giving them incentives to make it profitable, they would do it. We were mandating an unwilling party. Unwilling in the deepest sense. Unwilling to make a profit off an electric car because of an unwillingness to embrace the notion."
Greg Hanssen, a former EV1 owner, explains: "GM, I think, feels they got burned somehow. They felt that they put out the vehicle and there wasn't enough support for it, and the thought of building 100 times as many, then facing the marketing, trying to educate consumers about this type of vehicle was just scary to them."
Scary? Somehow we don't usually assign such human emotions to large corporations. But then again, maybe that's the point. Maybe it is too much to ask a corporation that thrives on the bottom line to take on the monumental financial risk of educating consumers, of teaching us to be smart about our dependence on foreign oil and to do what's best for our planet and ourselves.
Maybe they're right: If we don't demand it, they shouldn't build it. Then again, what if they had? What if they had followed through on Roger Smith's dream? What if they had truly presented us with the alternative? Would we have come along? Would there have been a market?
Unfortunately, we will never know. Now as I drive through Los Angeles and see the various hybrids and hear about the demise of Toyota's electric RAV4 and about the inevitable fuel-cell vehicles, I can't help but feel the electric car wars are over. Somehow in this story, Goliath won.
Or did he? From my new EV specialist, Rob Randall (who sounds like a character out of "Braveheart"), "Today, with the Panasonic batteries, carpool lanes, free parking at meters, the infrastructure, the subsidies if we could start over again today with all that, we'd change the world."
Written by: Peter Horton
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