News Column

GM: Ready to Resuscitate the Electric Car?

June 10, 2009

Suzanne Heibel--HispanicBusiness.com

gm ev1, electric car, hybrid car, gm history, GM future
Photo by Matt Graves, HispanicBusiness.com



Many are wondering how GM got to where it is today--in Chapter 11, restructuring, and dependent on government efforts to make that transition.

The company, which has been in business for more than 100 years and revolutionized the automobile with its invention of the catalytic converter, is now doing its best to make a comeback. However, after receiving $50 billion in taxpayer money, some people aren't sure that GM has an eye on the future, notably due to its failure to produce a car that excels in energy efficiency, like the Toyota Prius. In fact, GM's environmental record has been less than commendable.

Despite that Ford and Chrysler, the other two of the so-called Big Three, have taken a similar tack, GM has been subject to particular scrutiny. One reason for that scrutiny is its traditional role as the largest of The Big Three. Another was the company's dubious "starring role" in the 2006 documentary Who Killed the Electric Car. But how bad, or how good, really, is GM's century-long relationship with mother earth?

GM began experimenting with electric vehicles in the 1960s, when the environmental movement was just taking off, producing the Electrovair I and II and in 1970 creating the Electrovette. These forward-looking vehicles never made it past the car show display floors. But even that tryout didn't last long, and past the mid-1970s the electric car came to a halt. The problem?

"Lead plates and sulfuric acid, very low power density," said GM rep Tom Wilkinson, referring to the characteristics of the lead acid battery used in the vehicles, which ultimately led GM to ditch the project.

It wasn't until a quarter of a century later when GM seriously revisited the thought of producing an electric vehicle that could be used as something other than a concept car. And this time the motivation came from the state of California. In 1990, the Golden State mandated that five percent of all cars on the road be zero-emission vehicles by 1998 and that 10 percent be so by 2003. Just three years later, the Clinton Administration embarked on a $1 billion deal with the big three to improve upon vehicle fuel efficiency. With pressure from the top, GM went to work and created the EV1--short for Electric Vehicle 1--which was revealed at the Los Angeles Auto Show in 1997. The EV1 turned out to be the most prominent victim in Who Killed the Electric Car. In 1994, halfway through the EV1 program, GM purchased half of Ovonic, a division of energy company Electronic Conversion Devices, which specialized in advanced energy technology.

"[ECD] formed a partnership, a joint venture with GM, fifty-fifty ownership [of Ovonic]," explained Mike Fetcenko, President of Ovonic Battery Company. He told HispanicBusiness.com that when ECD formed the relationship with GM, the auto giant became the exclusive licensee for Ovonic's Nickel Metal Hydride (NiMH) patents for vehicle application. He noted that GM was the only car company at the time to have access to this specific battery technology. The NiMH lasted 30 percent longer than a traditional Nickel Cadmium (NiCad) battery and was made from non-toxic metals, making it the more environmentally friendly than its predecessors.

"We have double the energy of nickel cadmium," said Fetcenko, who noted that the NiMH contained no lead, mercury, or cadmium, which he explained are typically the three most toxic parts of a battery. "This is transformational technology. These are very engineered, highly complex storage materials, the batteries [can last] the life of the cars." Fetcenko also pointed out that while the rarity of lithium is still being debated in the scientific world, nickel is a noncontroversial resource, making it more socially and economically acceptable.

Although the EV1 looked to be the next big environmental breakthrough in the auto industry, GM stopped the program in 2002, citing modest sales and steep expenses as the primary causes for its end. "At the time the EV1 was developed, it was designed around lead acid batteries, but to maximize the range from the battery GM had to make the car so it was a light two-seater," said Wilkinson. Fencenko confirmed that only about 25 percent of the EV1s made used the NiMH battery. Wilkinson further explained that the lead acid battery had a significant weight that forced engineers to compensate for by making the car incredibly small and lightweight. "It had a very high current charging system," said Wilkinson. "In order to try to make that safe and convenient for consumers we developed an electric charging system, very expensive. It cost more than a Cadillac Escalade. They were simply economically impractical. In the end the business case didn't work out."

Former CEO Rick Wagoner later said in an interview with Motor Trend Magazine in 2006 that killing the EV1 program was the worst decision of his career.

But it wasn't just economics that halted GM's interest in an electric vehicle. In 1996 the California Air Resource Board, responsible for the Zero Emission Vehicle (ZEV) mandate just six years earlier, backed off on its demands for cleaner cars by 1998 and instead just left the mandate of 10 percent ZEV by 2003.

"Everything changed with the California Air Resource Bill. That was the original genesis or the seed behind [Ovonic's] relationship with GM," said Fetcenko. With the absence of enforcement, "They weren't highly motivated to make [EV1s]. SUVs were simply selling better."
But the abandonment of the electric vehicle didn't stop with the end of the EV1 program. In 2000--the same year the Toyota Prius was introduced to the U.S.--GM sold 60 percent of the GM-Ovonic joint venture to Texaco, which gave the oil company ownership of the NiMH battery. Texaco was then acquired by Chevron, which renamed the joint venture to Cobasys. "[GM] subsequently discovered they wanted access to [NiMH batteries] but they didn't want to make them themselves," said Fetcenko. "When they sold [the joint venture to Texaco] it was with the intent that [GM] become a customer."

Ovonic creator Stan Oshinsky later appeared in Who Killed the Electric Car to get the word out about the potential of his invention, the NiMH battery. He explains in the film that GM kept a lid on the information about the NiMH, and forbid Oshinsky from publicizing it. GM, says an anonymous source familiar with the situation, was less than thrilled with Oshinsky's movie appearance.

But GM stood by its decision and stated in a 2000 interview with Professional Engineering that it made sense for Texaco, an energy company, to own and develop battery technology rather than a car company.

Since 2000 GM has not produced a commercially successful electric or hybrid vehicle.

"The two-wheel drive [2009] Chevy Tahoe gets 14 [miles per gallon] city and 20 highway, while the hybrid of the same model gets 21 city and 22 highway. And most of that [improvement] is tires and aerodynamics," said Wilkinson, admitting that GM hybrids have not sold especially well. And the difference in price between the normal Tahoe and the hybrid? "It's a pretty big jump in price." And by big he means at least $10,000 more for the hybrid. (Wilkinson also went on to give the specs of the Toyota Prius: 48 city, 45 highway.)

In 2006 GM pushed its arguably largest "environmental" campaign titled "Live Green, Go Yellow." After fighting against tighter national CAFE standards and releasing the new, fuel-inefficient H1 Hummer , which averaged less than 10 miles per gallon, GM looked to push a "green" front by boosting awareness of its fleet of fuel flex vehicles. Able to run on E85, a fuel composed of 85 percent corn ethanol and 15 percent gasoline, these cars were presented as eco-friendly because of the possibility of them being run by an alternative fuel. However, corn ethanol turn out to be backward motion. UC Berkeley Professor Tad Patzek published an essay in the Journal of Critical Reviews in Plant Sciences in 2006 that concluded corn ethanol could actually take up to six times more energy to make than it is worth as fuel for a vehicle. The Green Car Congress reported that ethanol's energy content was lower than gasoline's, meaning it delivered a lower fuel efficiency, and ended up costing consumers more at the pump.
Plus, the use of food as fuel spurred debate about world hunger and the increase in food prices that would be caused by ethanol. .

"E85 was also pushed very hard by the federal government," said Wilkinson when asked why GM decided to put E85 at the forefront of its environmental image. "Most people looked at grain-based ethanol as a transitional fuel and it really only makes sense if gas prices are high. There was a flood of venture into ethanol during this time when gas prices were high."

After the wave of backlash that came at the end of corn ethanol, GM had no high-selling, fuel-efficient vehicle to show. In 2007 , Prius sales hit the one-million mark. That year, PBS interviewed GM's Beth Lowery, the Vice President for Environment, Energy, and Safety Policy for its documentary "Heat." In the interview , Lowery was recorded saying that, "As a public policy option, CAFE standards are not something that are very effective in reducing dependence on petroleum." Environmentalists were shocked. Although almost all car companies had fought capitol hill to keep CAFE standards low or even non-existent, the direct verbal confirmation that GM saw these standards as worthless was highly provoking. The remainder of the interview saw Lowery repeatedly dodging answering questions regarding the existence of global warming as well as attempting to coax Lowery into admitting that GM's E85 emission reduction plan was littered with sketchy math.

Needless to say, GM was unable to project an image of "green."

By 2008, GM was on the brink of collapse. The Obama administration ousted Wagoner as the CEO and gave the car giant $50 billion to revamp itself in an attempt to stave off bankruptcy. In 2009, GM indeed declared Chapter 11, and is now working to find a foothold in its home markets that are now dominated by foreign carmakers. The future for GM will be a combination of "electric vehicles, biofuels, as well as advanced or traditional combustion engines hybrids," said Wilkinson. "It's going to take all of the technology. A lot of people looking for the answer, we don't think there is one answer." He described GM's next move toward the energy efficiency as one that will push "energy diversity."

GM looks as though it is finally ready to take a leadership role in environmentally conscious automotive practices. The company recently made news by supporting the new CAFE standards set by the Obama administration. "It's nice to see these CAFE standards because it's very hard to plan with fuel prices and the market going wildly," noted Wilkinson. "CAFE sort of sets what the vehicle fleets are going to look like. If gas prices don't go up on their own," there have to be other incentives to own an energy-efficient vehicle.

However, the state of the market, according to Wilkinson, may not wholly cooperate. "Outside of a small group of people there's not a high demand for high efficiency vehicles right now," said Wilkinson.

Still, Fencenko couldn't disagree more. "If they would have built a Prius clone and stuck a GM logo on it," he said, "people would have flocked."


For more coverage on the automotive industry, please see HispanicBusiness' Auto Channel



Source: HispanicBusiness.com (c) 2009. All rights reserved.


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