ZEV Killed the Electric Car

I finally went to see Who Killed the Electric Car. It's a good movie, as documentaries go...it clearly has a specific interpretation of what happened and isn't subtle about making it...otherwise where would the entertainment be? But I left not agreeing. First of all, big disclaimer: I simply don't know enough to feel I have an accurate grasp of the situation, but here are my reactions...

GM and its CEO tried genuinely to innovate, probably to stake out a bold leadership position and certainly with an eye on the future, rather than next quarter or even the next fiscal year. In other words, it was a great display of forward thinking and leadership. And they did it by working with one of the most storied energy and mobility innovators out there: Paul MacCready. Wow. Shouldn't they be commended?

In response to this, California's famous and powerful Air Resources Board (CARB), the only body in this country that can legislate air quality other than the federal government, passed the Zero Emissions Vehicles mandate (ZEV). Its market based strictures on the auto makers to sell a specific quantity of vehicles that emitted nothing was, it seemed, an extension their pioneering work...but it was really a slap at GM and all the other auto makers: to sell cars in the biggest auto market on Earth, they would have to sell a specific minimum of cars, no matter the specific economics or potential future financial liability.

Wow. That's pretty harsh: a company tried to stake a leadership position, and assumed that with success, its resulting market advantage would let it define a white space and own it...just as Chrysler did with the minivan and Toyota has clearly done with hybrids (even though that's just a description of what should be considered effective energy management rather than a class of car...but that's another post). But that didn't pan out. CARB slapped them and killed the beginnings of what could have become a new market dynamic in which the auto makers would have been competing on efficiency rather than size, acceleration, weight, etc. CARB overplayed its hand and set us all back.

Okay, that's harsh, too, but if you view it this way, everything that happened after ZEV passed is entirely understandable...all the players acted in ways that were practical from a fiduciary perspective. Shareholders rule and these companies acted in their shareholder's best interests. It doesn't excuse their behavior, but it also doesn't require tin foil to interpret.

Okay, since I've probably offended a lot of people already, I'll keep going. It strikes me that we've reached a point where legislation is not going to be as effective as market based innovation. The forces of legislation are extremely powerful--witness our cleaner air, safer vehicles, etc. But the forces of rear-guard gaming of legislation by entrenched and wealthy powers--whether lobbying, increasing weight to get around CAFE, selling flexible fuel cars as CAFE credits to sell more heavy inefficient cars and trucks, or employing whole departments of people who do nothing but figure out how to game specific regulations--is equally powerful. There's something trite to say about immovable objects and unstoppable forces, but it's not entirely accurate. We've just backed ourselves into a brittle mess.

Hey, I've got an idea. How about a prize to create a new dynamic? If we give them the reason to compete on efficiency, they will, and we'll all win.

Comments

[Carl]

ZEV's existed long before GM made one. GM's research project just added to the burden of proof that ZEV's were viable.

GM knows the routine: legislation arises, you fight it in court, and if you lose then you finally comply. The fact that they pursued both this 'innovation' and the legal war, implies that GM had realized that it was likely they might lose this time.

GM has been shooting down legislation like this for decades. I imagine they're aware they can't win forever.

I'm willing to put money down that the top contenders and even the winner of your prize will be various forms of electric/hybrid cars.

[Roderick Wilde]

Mark Goldstein stated: "In response to this, California's famous and powerful Air Resources Board (CARB), the only body in this country that can legislate air quality other than the federal government, passed the Zero Emissions Vehicles mandate (ZEV)."

Mark, how can you state such a thing that you should know darn well just isn't so.

Washington State became the eighth state to legislate for cleaner air quality. The following is from The League of Women Voters of Washington:

http://www.lwvwa.org/legislative_NL/LNL2006/GlobalClimateChangeLNL.html

"E S HB 1397 Clean Cars—Signed into law on May 6, 2005
Passage of this bill is a huge step toward addressing the global warming issue in Washington. We are the eighth state to pass these stronger vehicle emission standards. Shortly, the vehicle manufacturers in Detroit and perhaps even the federal government will hear the message that Americans want technology implemented to improve air quality and reduce emissions that cause global warming. Automobiles are the number one source of Washington’s air pollution. These clean-car standards will reduce toxic and global-warming missions from autos by giving Washingtonians cleaner car choices. With these standards, all new cars sold in Washington after 2008 (starting with the 2009 model year) will emit less toxic air pollution, while also saving on fuel costs and starting to reduce our dependence on foreign oil. They will also:

Reduce cancer-causing auto emissions
Save $2.3 billion in fuel costs for state consumers by 2020
Enable Washington to reduce global warming pollution from new cars by roughly 30 percent by 2016
Leave more room for our state’s economy to grow within safe air pollution limits"

Mark further stated: "It strikes me that we've reached a point where legislation is not going to be as effective as market based innovation."

Here I am in total agreement with you Mark. That is why the next generation of environmentally clean, energy efficient cars will come from China. It will be like the seventies all over again except that GM will most like not survive this time. They recently put their eggs in one basket and closed down all their plants making smaller, less profitable cars. They kept open the SUV and bigger pick up plants with the higher profit margins. The big mistake here is it doesn't matter what your profit margin is if you can't sell the product.

Furthermore energy efficiency is becoming a matter of national security. Just as important is the issue of global warming and the survival of this particular planet that many of us call home.

Roderick Wilde
Suck Amps EV Racing
www.suckamps.com

[Paul Pancella]

I am having trouble following the logic here. Agree that GM should be commended for pursuing the EV1 program and actually getting vehicles on the road. It is even possible that CARB "overplayed" by requiring ZEVs when and how they did. But how was this a "slap" at GM?
It is what happened at the end of the EV1 program that is not so commendable. You state that it is at least easy to understand, as GM acted in the interest of their shareholders. How was crushing the cars instead of selling them to people who wanted them better for the shareholders? I admit I am not an economist, so I am interested in the simple explanation.

[Mark Goodstein]

Paul, the point I'm making is that CARB mandated that auto manufacturers sell a specific number of cars, regardless of profit, to be allowed to remain active in the largest, most important auto market on the planet. That type of legislative or government mandated market changing strategy has worked well in the past, witness our clean air and safe cars, but in this case. With the EV1 clearly not a profitable car, and not intended to be for a while, I'm just putting forward the case that maybe CARB should have allowed the industry to play it out and see if market forces produced the desired results (e.g., competition based on fuel efficiency). I'm happy to be wrong...this was just my first-blush response to the movie.

[Mark Goodstein]

Roderick, in fact, California is the only state that can introduce new vehicle related emissions legislation (under section 209b of The Clean Air Act). Other states can then adopt those or stick with weaker federal regulations. So, Washington was only able to pass that bill once California had led the way.

[Jim Beyer]

GM crushed the cars because of the liability in fielding vehicles that had no extensive spare part inventory. Suppose someone owns an EV1 that breaks. It is fixed in some jury-rig way, because of the lack of spare parts. Then it crashes, killing some self-righteous hollywood actress/actor (or someone else...). GM gets sued. That's probably not 100% logical, but that was the thinking. Ford and Toyota relented when their consumers complained so much, and finally let them have their cars, after signing off on the liability of the vehicles.

Another point is that the cars themselves cost $50-$100K to build, so they were never very practical to own in the first place. GM probably had determined that the first batch of EV1s would NEVER be owned, so part reliability and availability were never to be issues. But the got broadsided by the publicity and acted badly with it.

I can understand the sentiment (kind of) but I don't really understand why all these people got so mad at GM for recalling vehicles it had never sold, nor ever planned on selling. A deal's a deal.

[Kim]

I think the main problem is that the car companies that developed EVs still hold the patents for the engines, and refuse to release them to provide someone else with the opportunity to improve the technology.

There actually were people who wanted to buy these cars, but they were only allowed to lease them. What's the point of making them available if they aren't allowed to be kept? That's like winning the lottery only to have the money taken away...

What I don't understand is why the electric EV was pushed aside in favor of hydrogen fuel cell vehicles. There's no hydrogen pipeline to my house, and there's no hydrogen pump at the gas station, yet there were charging stations for the electric car. Hydrogren fuel isn't that efficient anyway...

[Charlotte Stibbs]

I personally think that parts could have been made, maybe creating more jobs for Americans but I also think that GM (and the powers that be {PTB} wanted the "test" to fail. If not, why did they only lease the cars? And if liability was an issue I bet everyone of the people who wanted to keep their car would have signed a legal binding document to release GM from liability. But the car was doomed by the oil interests. Just think maybe someone will come along, buy the plans, create a plant and produce the cars and create jobs for American! But, that won't happen because it's not what the haves want and I guess creating a strong manufacturing base in this country is against what our leadership wants. I don't think our future lies with hybrids, I believe that someone out their will create a true electric car that you'll plug into your solar garage and won't pay the PTBs/CEO's one red cent. Too bad Tesla didn't live longer...who knows what his theories would have done to the power structure and poor peoples lives.