On Dec. 11, General Motors, the world's largest corporation, shelved its plans to mass-produce an electric passenger car by the mid-1990s. The decision received only modest news coverage, confined mostly to the business pages. But for people concerned about growth and the creation of new jobs and about air pollution and the environment, the announcement was a severe disappointment. For people concerned about U.S. technological leadership in a competitive world, it was even more dismal news.
General Motors' retreat from its leadership position, while understandable given its financial position, has alarming implications for U.S. industry. Is the United States once again to take an early lead in the development of a new technology only to fritter away its advantage? It appears so, unless we act quickly.
In 1990, General Motors' then-chairman Roger Smith introduced with fanfare a bold effort to commercially develop a two-seat electric passenger car with high-performance capabilities. The car, initially named Impact, was to be commercially available for Southern California perhaps by late 1994 or 1995.
With this announcement, General Motors became the unquestioned leader in the race to develop electric vehicles. Other automobile manufacturers around the world were in the race too, but the effort by General Motors clearly placed the company, and the United States' automobile industry, well out in front.
For California, the implications of developing a successful domestic electric vehicle industry are enormous. At least two-thirds of all air pollution in urban centers worldwide is caused by motor vehicles. Urban air can't be made clean unless large numbers of people begin driving non-polluting cars. Electric vehicles, which are 97% cleaner than their gasoline-powered counterparts and more energy efficient, are by far the best air-quality solution.
In addition to environmental benefits, California would benefit substantially from developing a new, high-technology industry having synergies with its aerospace industry. The economic benefits being developed by a unique public-private partnership, CALSTART, include direct job opportunities in electric vehicle development, as well as opportunities provided by supporting industries. Through CALSTART, strong efforts are already under way in California to convert aerospace capabilities to civilian use in the development of components for electric vehicles and to participate in the emerging industry.
Electric vehicle production and the development of a dominant electric vehicle industry to serve the world market are top priority goals for many industrial countries. There are 17 major auto manufacturers worldwide, and all are making efforts to develop clean, efficient electric vehicles. Within hours of GM's announcement this month, we can be sure, every one of them was giving high-level attention to the best way they could move into the void. Unfortunately, the auto maker that steps forward most likely will be from outside the United States.
The barriers to U.S. success in the worldwide electric vehicle market are financial, not technical. In healthier times, GM would have been able to take on the risks by itself. Today it cannot. Most immediately, GM and other U.S. electric vehicle makers need substantial fleet purchase commitments from major buyers--including the federal and California governments--and those purchases should be made sooner than the dates imposed by the state on manufacturers for low-emission vehicle sales. California and the United States also should provide emissions credits and purchase incentives to stimulate private industry fleet and personal purchases.
From a strategic perspective, unless the federal government steps in and actively supports an industrial strategy that builds on the nation's electric vehicle strengths, the retreat of General Motors will cause the United States to become an electric vehicle also-ran.
The United States, once a leader in so many industries, has often lost its advantage because of inaction and the inability of the public and private sectors to work together to respond to rapid change. One need only look to the electronics and steel industries for examples. As auto makers in Japan and Europe continue their aggressive programs to develop electric vehicles for use in their respective countries and for export, U.S. policy-makers must put electric vehicle development and manufacturing at the top of their agenda. Otherwise, it seems we will have another American industrial tragedy.