GM Rolls Dice With Roll-Out of Electric Car

In November 1989, two months before the Impact electric car was unveiled at the Los Angeles Auto Show, General Motors ordered some film footage of the battery-powered vehicle cruising around an Arizona test track.

As the team of Southern California engineers that designed the teardrop-shaped prototype looked on, the Impact was wheeled out with a license plate that read: “The Future is Electric.”

But before the cameras were allowed to roll, a frantic GM official ordered the removal of the plate. “He said, ‘It’s too strong a statement!’ ” recalled Alan Cocconi, an engineer who helped build and design the concept car.

Such equivocation has been the hallmark of GM’s approach toward electric cars over the past decade as California first agitated for, and then demanded, zero-emission vehicles.

While the world’s other major auto makers have held their electric vehicle cards close to the vest, GM has been center stage. But its on-again, off-again production stance amounted to a confusing public display of corporate schizophrenia.

So it is with equal parts surprise and skepticism that the world is again watching GM as it becomes the first major auto maker in nearly 80 years to build electric cars from scratch and sell them to the public.

With the flair of a Hollywood movie premier, GM’s EV1--a sleek, $34,000 sports coupe derived from the Impact--is being delivered today to consumers at 24 Saturn dealerships in Southern California and Arizona. As the EV1 is driven off by the likes of actor Ed Begley Jr. and Baywatch star Alexandra Paul, GM is undertaking an ambitious push into a new era of automotive transportation.

The stakes are enormous. If the vehicle succeeds, the hegemony of the internal combustion engine could be broken. Gas-powered cars will be with us for decades to come, but EV1 could legitimize a whole new approach with vast potential for cleaning the air and easing the need for oil. It could also lead to a wave of alternative-fuel vehicles using fuel cells, flywheels, ultracapacitors and other technologies still under development.

“This has the potential of being a revolutionary step,” declared John Dunlap III, chairman of the California Air Resources Board.

If the EV1 bombs--and there is no shortage of doubters--it could relegate the electric car to the compost heap of history once and for all, while setting back alternative-fuel vehicle development for decades.

“It’s not the right time or technology,” said Lester Berriman, head of Drivers for Highway Safety, a small group of California engineers expert in auto issues. “It could kill electric vehicles for the future.”

For California, the arrival of the electric car is a vindication of a controversial regulatory gamble--mandating zero-emission vehicles as a way to solve the state’s severe air pollution problem. Even though the mandate was pushed back last year from 1998 to 2003, state regulators can now point to the EV1 as proof that electric car development has been advanced by their prodding.

For GM, the EV1 has been a catalyst for change. It provides GM, whose innovations have ranged from the automatic transmission to the catalytic converter, an opportunity to recapture the crown as a technology leader lost to the Japanese in the 1970s and 1980s. The vehicle also has been a laboratory for changing GM’s corporate culture--from that of an arrogant, stodgy behemoth producing clunky cars to a leading-edge company open to new ideas and technologies.

Most important, the EV1 is an opportunity to learn whether the public wants such a machine. Consumers ultimately will decide the future of electric vehicles by their willingness to buy them despite their initial, and sizable, limitations.

Of course, GM, which invested $350 million in the EV1, is not the only auto maker scrambling to position itself for an electric future. Its U.S. competitors, and auto makers in Japan, Europe and Korea, are deep into electric vehicle development as California regulators tinker with their zero-emission deadlines into the 21st century.

Toyota recently doubled its research budget for alternative-fuel vehicles to $800 million a year. Chairman Shoichiro Toyoda predicts that in the next few years, if electric car costs can be cut in half, sales will take off.

“We seem to be on the verge of a technological revolution,” Toyoda said.

To its credit, GM is first off the mark. The traditionally lumbering, insular auto giant went outside its walls to find inspiration, then returned to Detroit where some in-house dreamers brought it to life. The birth was long and hard. The EV1 was kept alive even when GM’s own survival seemed in question. And it was shaped by the rugged crucible of California’s environmental politics.

“It stands as a triumph of the visionaries,” says Roland Hwang, transportation project director for the Union of Concerned Scientists.

Back to the Future

Nearly 100 years ago, electric-powered vehicles accounted for about 30% of the fledgling auto industry. A favorite of women, electrics were quiet, nonpolluting and easy to start. By contrast, the crude early internal combustion engine cars were noisy and smelly and had to be cranked to start.

But gasoline-powered cars quickly improved. Their greater range and speed soon left electrics in the dust. The final dagger was the invention of the electric starter in 1912, eliminating the need for a hand crank. By the 1920s, electric vehicles had disappeared from the scene.

As smog concerns arose in the 1960s, particularly in Los Angeles, auto makers revived electric vehicle research. The work geared up with the oil shocks of the 1970s. GM even announced in 1980 that it would produce an electric version of its Chevette. But gas prices soon stabilized, and GM never produced a single “Electrovette.”

Strangely enough, the true revival of the modern electric car took flight three years earlier in August 1977 with the liftoff of a human-powered airplane in the San Joaquin Valley.

The Gossamer Condor, designed by engineer Paul MacCready, was a delicate craft with transparent wings spanning 96 feet, virtually no fuselage and a tiny cockpit for the pilot to sit in and pedal. It was the first human-powered plane to complete a rigorous 3-mile course.

The Condor was followed in 1979 by MacCready’s Gossamer Albatross, the first human-powered plane to cross the English Channel. Two years later, the Solar Challenger, a solar-powered aircraft, accomplished the same feat. Then came the Sunraycer, a solar-powered vehicle that won a 2,000-mile race across Australia in 1987.

The quirky inventions appeared impractical, but had advanced the understanding of aerodynamic design, lightweight materials and unusual power sources.

The Sunraycer was financed by GM. So pleased were GM brass with the victory against international competition that they hired AeroVironment, MacCready’s small Monrovia research firm, to secretly build a concept electric vehicle using some of the technology from the solar car.

Two days after the 1990 Rose Bowl, the Southern California sun was shining. But it wasn’t the weather that had Roger B. Smith glowing. Rather, the diminutive GM chairman beamed with the knowledge that he was about to rock the auto world. He did just that when he drove a silver electric vehicle before reporters at the Los Angeles Auto Show.

The Impact was a public relations coup. The response was so positive that in April, Smith--against the advice of his closest advisors--announced that GM would mass produce the two-seat car by the mid-1990s.

That announcement “backfired on us because it got regulators thinking about a mandate,” recalled Robert C. Stempel, who would succeed Smith as chairman.

The California Air Resources Board had long regarded electric vehicles as the magic bullet to improving the state’s air quality, the nation’s worst. Half the state’s air pollution comes from car and truck exhaust.

Auto makers had always argued that electric vehicles were impractical, the technology not advanced enough. Now GM was singing a different tune, and the ARB started to hum along. Before the year was out, the ARB had adopted a zero-emission rule that in essence required 2% of cars sold by the state’s seven largest auto retailers be electric-powered as of 1998.

GM felt the mandate made it impossible to make a profit selling electric cars. It required production of more vehicles than GM knew it could sell, and brought six new competitors into the market. Still figuring it had a big lead, GM resolved to bring the Impact to market by as early as 1993.

To do the job, GM turned to Kenneth Baker, a passionate, ambitious career engineer who had run the ill-fated Electrovette program. He was skeptical of GM’s resolve but put aside his doubts. “I saw it as a chance to make history,” Baker said.

It would be a tough task. Nearly every part of the Impact would have to be redesigned and engineered--a new motor, controller, battery and charger. One of the biggest worries was the battery. Using lead-acid batteries, the Impact was said to have a range of 125 miles, but the reality was much less.

Meanwhile, GM’s financial problems began to overwhelm the company. In 1991, it lost a staggering $4.45 billion. New chairman Stempel announced the closing of 21 plants and elimination of 74,000 jobs.

Realizing his program was in trouble, Baker rushed through a fast-build of an Impact to show its production was feasible. But when the financial crisis forced the November 1992 resignation of Stempel, an ardent Impact backer, the program was taken off production status and its staff cut by two-thirds.

On Dec. 7, Baker traveled to the Lansing, Mich., plant where the Impact was to be built to break the bad news. He offered encouraging words and then wished everyone a happy holiday. “I was booed,” Baker recalls.

Keeping the Impact Alive at GM

While it appeared to the world that the Impact was dead, Baker had managed to keep it on life-support. GM first sought an unprecedented joint venture with Ford and Chrysler under which the Big Three would cooperate in producing electric-vehicle components and possibly even battery-powered cars and trucks. Baker referred to it as Team USA, a joint national effort to beat the Japanese to market.

The talks amounted to wary shadowboxing. Chrysler bowed out early as Ford and GM continued negotiating through much of 1993. They showed each other secret prototypes, but talks stalled when GM insisted Ford pay $100 million for its electric vehicle technology.

“We couldn’t come to financial terms,” said John Wallace, head of Ford’s EV program.

Baker next pursued another avenue. GM’s board had given Baker $32 million to produce 50 Impacts for test purposes. He used 30 to provide two-week test drives to consumers in 12 cities. GM was unprepared for the public reaction.

In Los Angeles, more than 10,000 people signed up.

Yet even while kicking off its nationwide road test, GM was teaming up with its rivals and the oil industry to mount an assault on the California mandate, which by now had been adopted by 13 states in the Northeast.

As 1993 neared an end, GM President John F. “Jack” Smith traveled to New York to meet with investment analysts. GM’s turnaround was taking hold, he declared. Its U.S. auto operations would post a profit in 1994. “No excuses,” he added.

One of Smith’s top advisors, strategist Robert Purcell, urged the chief executive to restart the electric vehicle program. He saw the Impact as GM’s chance to stake a claim to technological leadership into the 21st century.

The Impact also had just been tested with an advanced battery, a nickel-metal hydride pack made by Ovonic, a firm now headed by the ousted Stempel. In one test with an Ovonic battery, the Impact went 201 miles on a single charge.

Soon afterward on March 7, 1994, GM’s board quietly put the Impact program back on production status. There were two conditions: Cut costs to the bone, and proceed with secrecy.

Purcell became program manager, replacing Baker, who had been promoted to vice president. As he was introduced to the board, Purcell asked Jack Smith if he had any advice. Smith said, “Yeah, Bob, make a business out of it.” The line became a company mantra.

Cost was hardly the only problem. The Impact failed a crucial crash test, the electronic controller developed bugs and the Ovonic battery behaved erratically. The first two problems were fixed and GM decided to delay use of nickel-metal hydride until 1997 at least.

The program also got a boost from GM Chairman John Smale, the publicity-shy outside director who had engineered Stempel’s downfall. He borrowed an Impact for a week and then sent his assessment to Purcell by letter.

Smale, a consumer products genius from Procter & Gamble, wrote that the Impact was likely to generate excitement in Baker’s test-drive program. “My instincts are that we could sell a lot more of these cars than we might think,” he concluded.

Indeed, consumers gave glowing reports. They were surprised by the Impact’s zip, going from 0-60 mph in less than 9 seconds. It was quiet. It was fun. Drivers left the car wearing what GM staffers came to call the “EV smile.”

Even as the Impact made the rounds, GM kept a lid on its plans to actually build and sell it. The secrecy was imposed for two reasons: GM didn’t want to tip off rivals, and it was determined to roll back the mandate.

While auto makers and the oil industry stepped up lobbying for delay, a blue-ribbon scientific panel concluded that advanced batteries would not be commercially ready by 1998. The ARB agreed to drop the mandate for 1998--in part because Dunlap feared some reluctant auto makers might put substandard electric vehicles on the market in order to “poison the well.”

As part of the compromise, the auto makers agreed to produce a small number of electric vehicles and put demonstration fleets on the road in the meantime. A 10% mandate remains in place for 2003.

An Electric Future?

It was time for another Los Angeles Auto Show, the 1996 edition, and CEO Jack Smith--like Roger Smith six years earlier--came before reporters at the L.A. Convention Center on Jan. 4 to announce that GM would begin selling the EV1 this fall.

“It is time to get the electric vehicles out of the lab, into the showroom and onto the road,” he declared.

GM doesn’t expect to make money on the EV1. But it figures profits will come with follow-up electric cars and components as technology improves, volumes increase and costs come down.

GM also hopes to reap the benefits of just being first. As the EV1s silently hit the road today, GM is making automotive history by retailing the first purpose-built electric--that is, not a gasoline-powered car converted to electric--in modern times.

Not everyone is convinced that it is a momentous occasion.

“I don’t see this as revolutionizing the automotive paradigm any time soon,” said Kenneth Green, director of environmental studies for the Reason Foundation, a Los Angeles-based think tank.

Green and others note that the EV1--whose battery pack carries the energy equivalent of just two gallons of gas--cannot match the performance of even the most basic gas-powered vehicle in terms of range.

It is also pricey and probably could not be leased to more than a few hundred wealthy hobbyists without its local, state and federal subsidies, which can lower the price $8,500.

But proponents say the EV1 is not meant to be a vehicle for everyone, or designed to replace the internal combustion engine any time soon. Rather, GM’s imperfect electric car, and others soon to appear, are important as steppingstones to the next level of clean personal transportation, whatever form that might take.

Society’s stake in that grows clearer as demand for cars and trucks increases worldwide, along with growing concerns about global warming.

* CONSUMER ISSUES: What prospective owners need to know about the EV. D1

* CAREFUL START: Marketing the car. D1

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Batteries Included

GM’s electric car, EV1, is now in Saturn showrooms across the Southland for energy-minded consumers who can afford the steep leasing rates and live with the limited range.

Plugging into the power

* How to recharge: With home or public charger, takes about three hours. A plastic paddle on the charger plugs into the car’s charge unit. Portable recharger, left, can be carried in the trunk for emergency use, but it takes 12 to 14 hours to recharge the batteries.

* Where to recharge: Fewer than 20 public recharging stations exist in Southern California, with plans for 150 by next summer. For now, public sites are free. For a car driven 1,000 miles a month, about $20 a month with a home unit, above.

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Guging the investment

* Price: $34,000, three-year lease only.

* Incentives: First 1,200 cars qualify for state and federal incentives totaling $8,500. With incentives, monthly payments would total about $500 a month, $640 without.

* Other costs: Buyers must lease a home recharging unit for $50 a month and pay an installation fee of $1,000.

* Driving range: 70-90 miles without recharging.

Researched by ROB CIOE / Los Angeles Times