Schaller: Who un-killed the electric car?
We're seeing a revolution in global car culture
Electric vehicles seem to be having their moment these days, even if it's too soon to celebrate that last tank of gasoline. From what we can see here in Arizona, advances in EV manufacturing and battery chemistry have together brought an electric vehicle future closer than most have ever considered possible.
It wasn’t supposed to happen this quickly.
Hell, it wasn’t supposed to happen at all.
We’re seeing a revolution, not just in EV design and propulsion but across the global car culture itself. Our entire auto design, sales, maintenance and repair ecosystem is being transformed by new automotive leadership and patterns.
Many in the industry did not read the tea leaves correctly or soon enough. They are in overdrive now, destined to play catch-up if they are to remain competitive.
This is not the automotive industry’s first run at electric vehicles. An earlier effort by General Motors started in hope and quickly disappointed. At the time, Arizona was just a bit player in the game.
GM’s program shuddered to a halt before a full-scale technology shift ever felt possible. We didn’t know what we missed, so it might be helpful to revisit those times in light of what’s happening now.
At the outset, it is clear that this next gen EV technology coming to our driveways is nothing resembling the proto-EV that GM first built.
In our increasingly digital world, today’s EVs are often called computers on wheels, loaded with software and dependent for design and repair on coders and internet connectivity designers not combustion engineers.
One EV manufacturer recently announced a safety issue recall that will be corrected with an over- the-air software update. More like a phone app update for “bugs” while we’re sleeping. These will not be our parents’ cars.
The indirect consequences of the EV transformation will permeate the world of auto repair firms, spare parts manufacturers, auto mechanic training classes, back-yard tinkerers, and the very structure of our long-term relationship with those who sell us cars and finance them for us.
The Tucson energy and automobile economies and those in every city in America will ultimately need to address these realities. As our electrical grids continue to decarbonize, EVs will help us face up to the overdue problem of climate changing emissions in transportation. Yet dislocations in the dominant car culture of the past century are guaranteed.
The EV-combustion contrast is stark.
EVs don’t need gas tanks, fuel injectors, radiators, valve trains or exhaust systems. No more oil changes. EV drivetrains have about 20 moving parts compared with 200 in conventional drivetrains.
The auto repair lobby has not been heard from for the moment as its garages stay filled with internal combustion cars. At least until owners start making the leap to EVs. Or until combustion cars and their spare parts stop being made. In Belvidere, Ill., and other small towns, some of these dramatic steps are closer than we think.
This time we can anticipate Arizona being a full participant in the EV revolution, hosting factories to build both vehicles and the battery packs to power them.
We’re able to mention already, without fingers-crossed, that the petrol-funded Saudi Sovereign Wealth Fund is financing EV production in Casa Grande. Almost across the highway a $5.6B EV battery plant is being built in Queen Creek by the Korean battery giant LN Energy Solution Ltd. The company announcement in late March did not escape a headline in the Wall Street Journal, highlighting it as the largest ever investment in North America for a stand-alone battery manufacturing operation. Not in Michigan, not in Ohio, not in Windsor, but in little old Queen Creek, Ariz. And we’re still early in the game. Hang on.
Letting the genie out of the bottle
In the late 1990s General Motors had its first run at making an electric vehicle for the U.S. auto market. It gave us a two-seater, with archaic batteries and limited range, dubbing it EV1, the first production model electric vehicle in the modern era.
The initial production run of 660 cars in 1997 used lead-acid batteries, not unlike those on a golf cart. The second run, two years later, sported the nickel-metal-hydride batteries that Toyota and Honda were beginning to use for their innovative gasoline-electric hybrids. Just 457 of these EV1s were produced.
Bringing an electric car to market was always going to be a disorienting exercise in an industry used to getting up every morning and making more internal combustion engine vehicles. Yet the EV1 had its supporters, from alternate fuel die-hards to clean-air regulators in places like California.
Public concern over auto emissions was growing, including a deepening concern over carbon dioxide emissions amplifying climate change. GM seemed to have made a smart business decision.
Yet, the millennium passed and there was never an EV2.
GM halted production of the EV1 in 2002, saying that it represented an unprofitable niche market. Just like that, it was game over.
It was almost a told-ya-so moment for the skeptics. If the largest auto maker in the world decides to kill a model, or a technology, or even an engineering dream, it can usually do so with impunity, serving a lesson for others.
Who else but GM, with its market muscle, could take the risk to let the EV genie out of its bottle and then think it could be put back in?
Any EV1 'crusher' footage out there for TikTok?
Once the execution order had been issued, General Motors acted decisively, calling in all 1,100+ EV1s it had manufactured. The task was made easy in that GM had leased rather than sold the cars, meaning whoever had one was required to surrender it to GM on a call-in such as this.
The deal was, “You can’t buy, it, you can’t sell it.” If you wanted an EV1 back then, you had to lease it. If there was a number to call with any questions, it could have been 1-800-Its-Ours.
Leases were initially offered only in the cities of Tucson, Phoenix, and Los Angeles, expanding later to San Francisco and Sacramento. The Arizona cities soon became suspect for leasing as concerns arose over hot weather performance of the novel nickel-metal hydride batteries.
GM used the lease arrangement for a number of plausible reasons. Getting quickly out of the EV business without even a few visible reminders on the road was one of them. In GM’s thinking there were big headaches if EV1s stayed in private hands and the company was no longer selling them or offering parts, servicing, warranties and the like. There was also its proprietary technology to consider.
How about liabilities should the new technology require major safety recalls? There were far too many reasons to let the essentially hand-built, first generation cars stay in service if the company was abandoning the technology. They needed to be “abandoned” too.
The cars were easy to find. With ranges of 55-105 miles and absent a public charging infrastructure at the time, they had likely not strayed far from their original driveways.
Most of the EV1s reclaimed by GM were crushed at its Arizona Proving Grounds and sent to the landfill. There is no easy record of what became of those EVs specifically leased in Arizona. Those which avoided the crusher had their powertrains deactivated and were sent to museums. One went to the Smithsonian.
Of the car crushing moment itself, I wonder if there is footage of the ceremony somewhere? Perhaps a record number of TikTok crusher views awaits.
Closure on the EV1 came in 2006 when documentary film director Chris Paine gave us “Who Killed the Electric Car?” At that juncture, hope seemed thin that the technology would ever again be tested.
Of course it hasn’t turned out that way. GM was not alone in seeing potential in an electric car, and it was certainly not the only one with an engineering dream to make it real. As the world quickly learned, the electric vehicle genie had not disappeared.
If you start me up, start me up, I'll never stop
For aficionados of an electric vehicle, the end of EV1 was a cause to mourn what might have been. To GM’s dismay, not everyone took this path. Within two years of the car crushing, and before Paine’s documentary even debuted, a most unusual form of electric vehicle redemption was unfolding.
In 2003, just a year after GM dismantled the EV1, Martin Eberhard and Marc Tarpenning founded Tesla Motors, an electric vehicle startup. Tesla quickly caught the attention of South African-born entrepreneur Elon Musk who had just sold the fintech company PayPal to eBay for $1.5 billion.
In 2004, Musk used some pocket change from his new wealth to front a $6.5 million investment in Tesla, becoming the largest shareholder of the company.
Musk has often said he was inspired to help advance the transition to sustainable transportation and renewable energy. He saw Tesla as a way to do this.
Musk also admits being encouraged to take on the electric vehicle challenge by the very abandonment of the EV1 by GM two years earlier. Since 2008 he has served as Tesla’s CEO and product architect.
As a start-up, Tesla had its own unique challenges establishing credibility in almost every aspect of designing and building this new form of vehicle, from a battery supply chain to workforce hiring and training.
Its biggest asset, apart from Musk’s vision and deep pockets, was that it was not a conventional auto maker. It had far less to unlearn, few or no traditions to break or legacy liabilities to cover.
It was on a path not seen since the days of Ford’s hegemony in the first decades of the twentieth century. From the outset, Tesla went big.
It began a partnership with industrial giant Panasonic for the initial batteries it needed. The batteries would be powerful, using lithium-ion cathodes. Some were packaged to give a range between fast charges of up to 500 miles. They provided torque that almost no other car could match.
Teslas were more like Formula 1s than EV1s and drivers took notice.
Tesla took over a former GM auto manufacturing plant in Fremont, Calif. where the first retail delivery of its Model S occurred in 2012. The expanded plant now produces multiple models and employs 22,000 people.
Musk, never accused of excessive pause or introspection, was moving Tesla fast. Had he used a rear view mirror in early 2013 he would have seen that it was the 4th quarter of 2012 when Tesla’s cumulative production of electric cars first exceeded 1,100.
Eleven hundred was the approximate number of EV1s that GM crushed into potential zombie cars a decade earlier. The only electric cars that would ever haunt GM in the years to come would be Teslas.
In neighboring Nevada, Tesla established its initial gigafactory (Giga Nevada) to assemble lithium-ion batteries and components for its growing fleet of electric vehicles and home energy storage systems.
In technical terms, a gigafactory is a battery plant capable of producing more than a billion watts of continuous power per year. Giga Nevada began mass production of cells for EV batteries in 2017. When fully built-out, the factory is expected to have the largest footprint in the world.
To this point Tesla was one highly unusual startup having unusual success selling expensive electric cars. A lot could have gone wrong, and almost did, that would have sent Tesla to its own figurative crusher yard.
But something else happened to ensure that this time the revival of electric cars would be permanent.
In 2014, Chinese President Xi Jinping announced that development of electric vehicles was a strategic policy goal for his country. He called it the only way that his country could transform “from a big automobile country (the world’s largest market) to an automobile power.”
Its 10-year goal was for 20 percent of its new car sales to be electric. China met Xi’s goal last year, 24 months early.
Before this, Tesla was already doing its part to make Xi’s plan a reality. In 2016 Tesla, from its plant in Fremont CA, sold $1 billion worth of US-made electric cars in China. Quickly, China and Tesla reached an agreement for Tesla to build a $2 billion gigafactory in Shanghai.
The Shanghai plant moved from permitting to its final electrical work in only 168 working days.
Musk saw the factory as a template for Tesla’s future growth and has since opened gigafactories in Germany and Texas while moving out on a nearly $4 billion expansion at Giga Nevada. Tesla sales in 2022 exceeded 1.3 million vehicles, easily dominant in the industry.
Musk often mentions ideas for an additional 10 gigafactories this decade.
Outside of Shanghai, the EV transformation across China was happening almost overnight, with home grown firms like BYD (Build Your Dreams), XPeng, and Nio now battling for market share. BYD is already neck and neck with Tesla for industry dominance in EV production and sales.
More than 300 other Chinese companies are making EVs with Chinese and global export markets in mind, China is well on its way to being an “automobile power.” And Tesla is along for what looks like a very long ride.
Time to play pile-on
As Tesla and China made the economic and political case for an EV transformation, it became the scaffolding for others to build upon. Legacy auto makers from VW to Volvo, Nissan to Hyundai, Ford to, yes, GM, have begun the climb.
Some accelerated their own once-tentative plans for EV lines just in case Tesla was truly onto something. Others are tying up with auto makers already ahead in the EV game, including startups with piles of private capital. While Tesla secured its market sources for the money metal, lithium, other manufacturers still scramble to find partnerships with mines and metals processors to back up their press releases about EV goals and a phase out of internal combustion cars.
Everyone wants to partner with a South Korean or Chinese battery company (or three) before their competitors do. Almost 30 million EVs are now on the road globally and by the end of this year the number will reach 40 million.
Here’s where Arizona has been able to play a much more expanded role than time or technology allowed in the days of the EV1.
Phoenix and Tucson have quickly become two of the fastest-growing areas in the country outside of California for new EV registrations through the first half of last year. At the same time in 2021, Arizona was ranked 7th in the country for the most registered electric vehicles (28,7070).
It has become a game of industrial pile-on, for legacy and start-up auto manufacturers alike. Not so much for fun but to ensure the future of their brands if not their very existence in the EV industry.
Beyond the dominant market presence of Tesla and China, there has been an insane amount of private capital and strategically placed government incentives in the last 2-3 years.
The investment by auto industry heavyweights in EV and EV battery production by 2030 is dizzying: VW $200 billion, Mercedes-Benz, $47 billion, BMW, Stellantis and GM $35 billion each and Ford $50 billion.
Tesla spending for the same period has not been disclosed, but its announced plans to build 20 million EVs will come at a cost of hundreds of billions of dollars, according to Reuters.
More firms and their investments could be listed, but it would blur. Jumping to the bottom line, Reuters reports that the world’s top automakers are intending to spend nearly $1.2 trillion on EVs through 2030.
In many cases its an all EV-or-nothing proposition as companies announce intent to stop making combustion engine vehicles with stunning swiftness. Having tried going all-out of the EV business earlier, GM is now going all-in on EVs by 2035. Volvo and Buick say they’ll do it too, only five years sooner.
The sounds we’re hearing are from the legacy automakers spinning off or winding down their combustion engine assembly lines. Business models are disintegrating. Rarely quiet or pretty.
Ford’s CEO Jim Farley told dealers last summer: “We’ve got to go 100% on-line. There’s no inventory, it goes directly to the customer.” Said Farley, dealers have to adapt or die.
Tesla on the other hand has never made anything but electric vehicles.
There are slow movers for sure, and our favorite auto makers may be among them. Toyota recently did some housecleaning in its C-suite as it became the last major automaker to aver the inevitability of an EV world.
For the slow movers like Toyota, Honda, and Ford, the problem was, and remains, that none of them can make up the decade of lead time that Tesla gained starting in 2008.
Nor can they expect to easily make up the long-term investments and infrastructure spending China used to lay the foundation for its EV market, a market now standing subsidy-free.
Everyone playing catch-up is largely paying for that investment by selling as many of their gas- guzzling best sellers before the combustion era winds down even more.
As Tesla began selling its first EVs in 2009, outgoing CEO of GM Rick Wagoner said the biggest mistake he ever made as chief executive was killing the EV1 car and failing to direct more resources to electrics and hybrids after such an early lead in this technology.
So who un-killed the electric car?
Thanks to Paine’s 2006 film, we know how the EV1 was killed. But how to assign thanks (or blame if you are a newly minted combustion mechanic) for un-killing the electric car?
There is a short answer and a long answer.
From the start Tesla shocked the automotive world with its brash scale and size. The performance of its cars from the Roadster onward had buyers lining up while Tesla stayed one step of growing demand by expanding production capacity at a feverish rate. So we can certainly thank Tesla.
And before Tesla had sold even 30,000 EVs, China had committed to a massive market pull. Its people filled Tesla showrooms to buy US-made EVs while it unleashed its own manufacturing might.
Giga Shanghai and 300 new EV manufacturing companies in China followed. Soon there was capacity to make tens of millions of electric vehicles for domestic and global markets every year. Little doubt remains that the EV transformation is locked in. So we can thank both China and Tesla.
The short answer then is that the electric car was resurrected by the successes of a quirky South African billionaire, Elon Musk, and the autocratic leader of the world’s largest country, Xi Jinping. They saw before others the potential in that early EV1 and acted quickly.
They reimagined the EV, redesigned it, built it better, built more of them, and sold more of them to millions around the world. They gave us new words like “Teslafication,” and “gigafactory.” All in a decade.
Closer to earth here, in places like Arizona, there is a longer answer.
In one scenario, we would ignore everything above and dig in for combustion’s last stand. Digging in is probably unwise.
More likely, we will be helping ensure that the near-monolithic Tesla-China decade of EV success becomes irreversible by manufacturing EV batteries in places like the $1.2 billion gigafactory being built in Tucson by American Battery Factory and the electric mobility battery plant being built by Sion Power, also in Tucson.
Just a month ago, Evelution Energy announced plans to build the only cobalt processing facility in North America near Tacna, Ariz., best recalled if at all as the name on an interstate exit sign a few miles east of Yuma.
We will also be building factories to make EVs, like start-up Lucid is doing at its two manufacturing complexes in Casa Grande. The Lucid Air, a more expensive first car, a la Tesla, earned Lucid the 2022 Motor Trend “Car of the Year” (https://www.motortrend.com/news/lucid-air-2022-car-of- the-year/award).
Lucid did not begin with Musk-like money in its back pocket, but having the Saudi Arabia Sovereign Wealth Fund as its majority shareholder brings more than chump change.
Unsurprisingly, the Saudi government plans to buy 100,000 cars from Lucid and build a manufacturing facility in that country. Making EVs in the desert is a trick it has already learned.
We will also buy EVs. We will sell EVs. Some of us will help manufacture EVs.
Some of us will choose to work for a future where electric vehicles can actually help reverse inequities in social mobility, where networks and organizations come together to ensure equal access to charging stations and to just plain getting around.
To be sure, a world of electric trucks and cars will not cure the multitude of other problems with how we currently move ourselves about. We’ve had a century to get so much wrong and we’ll need more than a decade to get it straightened out.
EVs will not do away with pot-holed streets. EVs will not on their face result in less congestion, better urban and suburban designs, safer streets, or more equitable access to transit. We still have to figure out a bunch of this.
The good news is that we get to rethink many of these problems and perhaps address them in a better way. This transformation offers an opportunity to achieve a plenitude of other socio-economic, environmental, community security, and political goals. How much of this happens is up to us.
The old models are under duress and crumbling while we watch. Even the use of lithium is not a sure bet. CATL, the world’s largest battery producer, announced in April that its first sodium-ion battery would power EVs made for Chinese brand Chery.
As we follow this transformation in mobility, there will be winners and losers along the way. A few years from now that will be a story we can better trace. Right now, everything is literally in motion. “Fast” is almost too slow a word to describe what is underway.
There surely won’t still be 300 Chinese companies making EVs a decade from now. Not all the EV startups and their SPAC ATMs, including those in Arizona, will be in business at the end of this great shift. Those who make the wrong calls on battery chemistry, supply chains, and business models for a new technology will become an anachronism in automobile history.
The pace of this change will be breathtaking for a technology about to dislodge petroleum from its commanding perch as the century-old mainstay of our global transportation and industrial economies.
No, it won’t happen tomorrow, but the EV share of global new car sales is now at 14% and rising. For all doubters out there, electric vehicles are back and are for real this time.
The electric car has been un-killed and there is no longer anything tentative about the transition. It remains an open question whether we will recognize the auto industry, our streets, and maybe even ourselves as the production of internal combustion vehicles comes to an inglorious end.
David Schaller is a Tucson native and retired environmental scientist. He currently writes on energy, water and climate security. He has published a weekly newsletter on best sustainable practices in technology, social and governance models for more than 20 years.