Former GM CEO Stempel On the Future of Electric Cars

Almost 20 Years After He Approved the EV1 The Same Major Snag Remains: Batteries

July 21, 2008

One of the Big Ideas that's gotten a boost from the recent oil price shock is the notion that the energy for transportation should come from the electric grid, not an oil well in the Middle East.
A number of big, established car makers have announced plans to produce cars that will pull from the electric grid all or part of the energy needed to make them go. They join a flock of upstart companies, such as Tesla Motors, trying to prosper by defining a new generation of mobility technology starting with a blank sheet of paper – or rather a blank video display screen.
Associated Press
Former General Motors Chairman Robert Stempel, 64, left, former Chrysler Chairman Lee Iacocca, 73, center, and Stanford Ovshinsky, president of Energy Conversion Devices pose in 1998 next to an electric bicycle the men were developing.
For everyone excited about electrifying the morning commute, Robert C. Stempel, the former chairman and chief executive officer of General Motors Corp., has a few sobering words.
Mr. Stempel believes in the idea of electric-drive cars – he uses the term "electric drive" to encompass both all-electric systems and plug-in hybrids. He gave the greenlight to development of GM's EV1, the first electric car to be offered by a mainstream car maker since the early years of the 20th Century. After he was pushed out of GM by a boardroom coup during the auto maker's last big financial crisis in 1992, Mr. Stempel continued to devote himself to the electric car idea. He spent more than a decade as chairman of U.S. battery maker Energy Conversion Devices, Inc. before leaving the company last year.
At both GM and at Energy Conversion Devices, Mr. Stempel's efforts to make a profitable business out of electric vehicles hit numerous potholes. GM has taken flak for killing the EV1. Mr. Stempel, who was long gone when the plug was pulled, says there was no subterfuge involved.

"The business side of the case wasn't there. The EV1 was too expensive…We were way off the cost target," he says.
Mr. Stempel, now a consultant with an office in suburban Detroit, says the obstacle to mass production of electric vehicles is the same issue as it was "when Mr. Edison told Mr. Ford that in a year he'd have a battery for his car. The weak link is the battery."
Nickel metal hydride (NiMH) batteries have proven reliable, he says. "It doesn't do anything naughty, like burn up," he says. But NiMH batteries don't have the range to be competitive with conventional cars.
Lithium-ion battery technology, similar to that used in laptop computers, offers better range from smaller, lighter packages. But lithium-ion batteries do have a propensity to be naughty. The Tesla Roadster uses lithium-ion batteries similar to those used in laptops. Tesla's important technology idea isn't the commodity batteries. It's the systems Tesla engineers designed to assure they stay cool and under control.
Associated Press
GM's EV1
Piling thousands of laptop batteries into a car creates "a control nightmare," Mr. Stempel worries.
Then there's the issue of cost.
"Look at what happened to the cost of nickel," says Mr. Stempel. "The price of nickel has gone off the charts." A lot of the commodities used in batteries have gotten expensive in the recent commodity price boom, he says.
None of this necessarily means the auto industry should once again give up on electric-drive cars. When it comes to reducing the economy's dependence on oil, the amount Americans burn up in cars isn't one issue. It is THE issue. But consumers need to take the latest flurry of press releases touting forthcoming electric-drive vehicle models with a few grains of salt.
The petroleum-fueled internal combustion engine has dominated automotive transportation for a century for a good reason: On the basis of power per dollar, it's more cost effective than the competition. Depending on how strictly one controls the emissions, Mr. Stempel says, a gasoline fueled car can be five to ten times more efficient on a dollars per horsepower basis than an electric car.
The challenges confronting the drive to electrify automobiles point to a big question underlying the current energy debate in America: How much faith should we have in technology to bail us out?

Forget Democrats vs. Republicans. When it comes to the future of cars, it's Technologists vs. Skeptics. Technologists believe that innovations in battery technology, hydrogen storage, cellulosic ethanol production, water-to-hydrogen systems, and lightweight vehicle design are right around the corner – thanks in part to the digital revolution of the late 20th Century.
Technologists acknowledge the cost hurdles confronting alternatives to oil, but insist they will be overcome just as they were for the personal computer.
Skeptics believe that the technology to substantially displace oil-fired mobility will take years, maybe decades to develop to commercial scale at reasonable costs.
They also question who will come up with the billions in research and development capital to make cars like the Chevrolet Volt or the next generation of Tesla cars vehicles that ordinary people can afford. That's particularly relevant when it comes to Detroit's Three struggling car makers – who inconveniently tend to run out of money in the middle of the oil price shocks that refocus their minds on alternatives to oil. GM last week announced it's slashing its capital spending budget to ride out the cash crisis caused by the collapse in sales of its fuel-thirstiest trucks.
The only thing worse than the current situation, would be a sudden collapse in the price of oil. In the absence of incentives to pay the price for new technology, consumers could strand expensive electric vehicles on dealer lots.
"I'm glad I am not an automotive CEO right now," says Mr. Stempel. "I thought I had problems."
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