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Public Policy, Industrial Innovation, and the Zero-Emission Vehicle

Published online by Cambridge University Press:  03 February 2021

Matthew N. Eisler
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Abstract

Regulating environmental outcomes without stipulating the technologies to accomplish them is a characteristically American form of governmental intervention. This approach aims to encourage industry to address public-policy concerns while minimizing interference in its affairs. However, California's zero-emission-vehicle mandate of 1990 implied the development of specific technologies with highly disruptive sociotechnical effects. The most practical zero-emission vehicle of the day was the all-battery electric vehicle, a technology characterized by the temporal mismatch of its components. Batteries have shorter life-spans than electric motors, a durability dilemma that rewards battery-making. In response, General Motors and Toyota devised strategies to mitigate this risk that involved mediating the technology of the Ovonic Battery Company.

Keywords

electric carGeneral MotorsMatsushitanickel-metal hydride batteryOvonicToyota
Type
Research Article
Information
Business History Review , Volume 94 , Issue 4 , Winter 2020 , pp. 779 - 802
Copyright
Copyright © The President and Fellows of Harvard College 2021

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Footnotes

The author thanks Lillian Hoddeson, Cyrus Mody, Yasuyuki Motoyama, Hannah Rogers, and three anonymous referees for their constructive criticism of earlier drafts of this article. He also thanks the staff of the Bentley Historical Library at the University of Michigan at Ann Arbor for their invaluable help in accessing the Ovshinsky and Stempel papers.

References

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2 During the September 1990 hearings, battery expert Andrew Wortman cited a study by the Department of Energy indicating that operators of electric cars equipped with standard lead-acid batteries would have to replace their packs every fifteen months at a cost of $3,000 to $4,000 for each replacement; see Collantes, Gustavo and Sperling, Daniel, “The Origin of California's Zero Emission Vehicle Mandate,” Transportation Research Part A: Policy and Practice 42, no. 10 (2008): 1308Google Scholar.

3 Tom Cackette (former CARB chief deputy executive officer), interview by the author, 27 Sept. 2019; Jananne Sharpless (CARB chair, 1985–1993), interview by the author, 5 Sept. 2019.

4 Collantes and Sperling, “Origin,” 1312.

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8 The expression “‘pure’ electric car” is sometimes used to refer to the all-battery electric car, as distinct from the hybrid battery electric and fuel cell electric formats. Strictly speaking, the fuel cell electric vehicle is also a kind of “pure” electric vehicle, including variants that integrate fuel cells and galvanic batteries in an all-electric hybrid configuration. To avoid confusion, I will not use the adjective “pure” in this context.

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14 Cackette interview.

15 Sharpless interview.

16 George Harrar, “Technology: The ‘Concept Car’ Pushes Change,” New York Times, 1 July 1990, sec. 3, p. 5.

17 Brooks, an avid enthusiast and participant in advanced-technology human-powered lightweight racing, learned independently about the Tholstrup race and was planning his own entry around the time MacCready was contacted by Hughes. Alec Brooks, interview by the author, 6 Dec. 2019.

18 Two Sunraycer cars were built, with the second one incorporating improvements on the initial prototype. Hughes designed the power source system around specialized subsystems then mainly used in military applications, using its own gallium arsenide photovoltaic cells and silver-zinc batteries made by Eagle Picher. AeroVironment built Sunraycer's body and chassis and GM's Research Laboratories designed and built the motor. See Bill Tuckey, Sunraycer (Hornsby, NSW, 1989), 13–20, 43–49; and Shnayerson, The Car That Could, 14–15.

19 Roger B. Smith, “A Message from the Chairman,” in Tuckey, Sunraycer, 9.

20 Brooks interview; Shnayerson, The Car That Could, 21.

21 Roger B. Smith, “GM Impact (EV1) Intro at the 1990 LA Auto Show,” speech given on 3 Jan. 1990, YouTube video, posted 7 Aug. 2008, https://www.youtube.com/watch?v=OjgbTdAiJE0.

22 Collantes and Sperling contest this claim; see “Origin,” 1306–7. It is likely that CARB was aware of Impact prior to conceiving the mandate. Cackette recalled that as his team was preparing the LEV in 1989, AeroVironment invited them to view the Impact prototype. Cackette interview.

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26 Shnayerson, The Car That Could, 187–90.

27 Wallace, Harold D. Jr., “Fuel Cells: A Challenging History,” Substantia 3, no. 2 (2019): 83–97Google Scholar; Eisler, Matthew N., Overpotential: Fuel Cells, Futurism, and the Making of a Power Panacea (New Brunswick, NJ, 2012)CrossRefGoogle Scholar. As a type of miniature chemical plant, fuel cells require physical plumbing to manage liquids and gases, making them more difficult to integrate into electric drivetrains than conventional galvanic batteries.

28 Leon J. Krain to Stanford R. Ovshinsky, 4 Mar. 1994, box 47, ECD/Corporate Partners/Joint Ventures, 1971–2004, Stanford R. Ovshinsky Papers, Bentley Historical Library, University of Michigan at Ann Arbor (hereafter SROP).

29 See Doron P. Levin, “Mr. Pearce's Growing Domain,” New York Times, 15 Nov. 1992.

30 Environmental Protection Agency, Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 through 2016 (EPA-420-R-16-010, Nov. 2016), 51.

31 Itazaki, Prius, 107, 153–54.

32 Itazaki, 19–21, 301.

33 Former CARB member Daniel Sperling suggested that the PNGV inspired G21; see Sperling, “Public-Private Technology R&D Partnerships: Lessons from U.S. Partnership for a New Generation of Vehicles,” Transport Policy 8, no. 4 (2001): 251. For a review of the founding of the PNGV, see National Research Council, Review of the Research Program of the Partnership for a New Generation of Vehicles (Washington, DC, 1994), 6–7.

34 Itazaki, Prius, 71–73, 115–16, 319, 340.

35 Itazaki, 75–76, 83, 94, 102.

36 Taniguchi, Akihiro, Fujioka, Noriyuki, Ikoma, Munehisa, and Ota, Akira, “Development of Nickel/Metal-Hydride Batteries for EVs and HEVs,” Journal of Power Sources 100, no. 1–2 (2001): 117–24CrossRefGoogle Scholar; “Panasonic Battery History,” Panasonic Global website, accessed 29 June 2020, https://www.panasonic.com/global/consumer/battery/about_us/history.html; Panasonic, “PEV: Battery for Pure Electric Vehicles,” data sheet, 1998, accessed 28 Jan. 2018, http://www.evnut.com/rav_battery_data_sheet.html.

37 Itazaki, Prius, 263–65; Taniguchi et al., “Development,” 119–21.

38 Thomas N. Young, “Civil Action No. 96-70919; Memorandum of Law in Support of Ovonic Battery Company Inc.'s Motion for Preliminary Injunction,” 3 Mar. 1996, 5, box 32, untitled dustcover (Matsushita), Robert C. Stempel Papers, Bentley Historical Library, University of Michigan at Ann Arbor (hereafter RCSP).

39 Morton Amster, Jesse Rothstein, and Daniel S. Ebenstein, “Civil Action No. 96-101: Matsushita Battery Industrial Co., Ltd., versus Energy Conversion Devices, Inc., and Ovonic Battery Company, Inc.,” 28 Feb. 1996, 8–9, box 32, untitled dustcover (Matsushita), RCSP.

40 Venkatesan, Srinivasan, Fetcenko, Michael, Reichman, Benny, and Hong, Kuochih C., “Development of Ovonic Rechargeable Metal Hydride Batteries,” Proceedings of the 24th Intersociety Energy Conversion Engineering Conference 3 (1989): 1659–64CrossRefGoogle Scholar.

41 Chang, Shiuan, Young, Kwo-hsiung, Nei, Jean, and Fierro, Cristian, “Reviews on the U.S. Patents Regarding Nickel/Metal Hydride Batteries,” Batteries 2, no. 10 (2016): 2–3CrossRefGoogle Scholar.

42 In June 1992, Kawauchi wrote a short but warm letter to Ovshinsky that began with the following lines: “As you know, according to Buddhist philosophy, in our human life, we all have a unique occasion to meet the right person at the right time. I regard our meeting in Japan as one of those occasions.” Kawauchi to Ovshinsky, 12 June 1992, box 8, Matsushita, 2007, SROP.

43 Krain to Ovshinsky, 4 Mar. 1994, 1–3, SROP; “OBC_PLN3.DOC 06/13/94,” 13 June 1994, box 32, GM-Ovonic, USABC John Adams, 4, RCSP; GMO Battery Summary, 21–23 Sept. 1997, 1–3, box 32, GM-Ovonic Battery Summary, RCSP; Shnayerson, The Car That Could, 101, 204.

44 The contrast in the views of Ovonic and GM-Ovonic on the relationship between battery cost and manufacturing can be seen in a comparison of a draft and the final version of a press release announcing the formation of the GM-Ovonic management team. The draft, likely written by someone from Ovonic, quotes Adams as stating that GM-Ovonic's evaluation of the Ovonic battery was the “next logical step in the commercialization process … as you move from the laboratory to the marketplace.” The draft also quotes Ovshinsky as stating that “opening the manufacturing facility” was necessary to achieve cost and production goals. The official GM press release omits any mention of Ovshinsky and includes only a more moderate claim from Adams that the automaker was encouraged by its technical evaluation and that GM-Ovonic was committed to moving the technology from the laboratory to the marketplace. See, respectively, “GM-Ovonic Forms Management Team, Readies Manufacturing Facility,” 30 Aug. 1994, and “GM-Ovonic Forms Management Team, Names Board of Managers,” 9 Sept. 1994, both in box 47, ECD/Corporate Partners/Joint Ventures, 1971–2004, SROP.

45 The initial business plan stipulated that GM would not fund Ovonic directly but instead facilitate resources from “organizations such as USABC.” “OBC_PLN3.DOC 06/13/94,” RCSP; see also Shnayerson, The Car That Could, 233.

46 The pack heated up when charging and when discharged in warm ambient conditions; see Shnayerson, The Car That Could, 233–35.

47 Shnayerson, 233–41.

48 A battery's state of charge is defined as the level of charge relative to battery capacity, ranging from empty to full. See Nasser H. Kutkut, Herman L. N. Wiegman, Deepak M. Divan, and Donald W. Novotny, “Design Considerations for Charge Equalization of an Electric Vehicle Battery System,” IEEE Transactions on Industry Applications 35, no. 1 (1999): 28–35. A further complicating factor in battery pack management is that even cells from the same final assembly batch can develop different states of charge depending on their placement in the pack. Victor Tikhonov, “Simple Analog BMS for the Tinkerer, Part 1,” Current Events 44, no. 12 (2012): 1, 34.

49 Nickel-metal hydride cells were moderately tolerant of overdischarge because the reaction yielded hydrogen that, if not produced too rapidly, could be reabsorbed by the anode. Ovonic promoted this quality of its metal hydride materials as a way of dispensing with costly pack management technology. See Stempel, Robert C., Ovshinsky, Stanford R., Gifford, Paul R., and Corrigan, Dennis A., “Nickel-Metal Hydride: Ready to Serve,” IEEE Spectrum 35, no. 11 (Nov. 1998): 29–34CrossRefGoogle Scholar.

50 GM Advanced Technology Vehicles, “Manufacturing EV-1 and S-10 Electric NiMH Batteries,” press release, 3 Dec. 1998, 1–3, box 31, Electric Vehicle Miscellaneous, RCSP.

51 Ovshinsky was accustomed to altering the chemistry of scaled-up cell prototypes and was annoyed when he learned that the GM-Ovonic production line would not be stopped to accommodate changes. Ovshinsky to Stempel, “Subject: GMO 3 Status,” 24 July 1998, 4, box 50, Business Admin ECD/notes (includes org chart) 2005–2006, SROP.

52 I thank battery expert Jack Johnson, cofounder of Volta Power Systems, for these insights; Johnson, interview by the author, 26 Jan. 2017.

53 Itazaki, Prius, 274–78.

54 Thomas N. Young, “Complaint and Jury Demand,” 29 Feb. 1996, 6–7, box 32, untitled dustcover (Matsushita), RCSP; and Young, “Civil Action No. 96-70919,” 6.

55 Morton Amster to Chester T. Kamin, 28 Feb. 1996, in Amster, Rothstein, and Ebenstein, “Civil Action No. 96-101,” 12.

56 Ovshinsky to Kawauchi, 5 Feb. 1996, box 32, untitled dustcover (Matsushita), RCSP.

57 Kamin to Amster, 26 Feb. 1996, in Young, “Complaint and Jury Demand.”

58 Kamin to Amster, 26 Feb. 1996 in Young, “Complaint and Jury Demand,” and

Amster, Rothstein, and Ebenstein, “Civil Action No. 96-101,” 11–12.

59 Young, “Civil Action 96-70919,” 11–12.

60 Amster, Rothstein, and Ebenstein, “Civil Action No. 96-101,” 5–12.

61 Young, “Civil Action No. 96-70919,” 2–8.

62 Deborah Salon, Daniel Sperling, and David Friedman, “California's Partial ZEV Credits and LEV II Program” (UCTC No. 470, University of California Transportation Center, Berkeley, 2001), 2; Heavner, Brad, Pollution Politics 2000: California Political Expenditures of the Automobile and Oil Industries, 1997–2000 (Santa Barbara, CA, 2000), 7–8Google Scholar.

63 A number of large manufacturing enterprises, mainly Japanese, had extensively patented nickel-metal hydride cell construction methods and components. See Chang et al., “Reviews,” 7–9.

64 Amster, Rothstein, and Ebenstein, “Civil Action No. 96-101,” 15; see also Thomas N. Young and Carl H. von Ende, “Civil Action No. 96-70919: Toyota Motor Sales U.S.A., Inc.'s Memorandum in Support of Motion to Stay This Proceeding Pending Decision of Delaware Court on Motion to Stay, Dismiss, or Transfer,” 12 Mar. 1996, 9, box 32, Young, and von Ende, Miller, Canfield, Paddock, and Stone, 03.12.96, RCSP.

65 Stempel to Rich Piellisch, 6 Mar. 1996, 1, box 32, Fleets & Fuels inquiry, RCSP.

66 “Potential Settlement Plan,” 28 Jan. 1997, 1–3, box 50, Bus Admin ECD/Notes (includes org chart) 2005–2006, SROP.

67 Ovonic claimed its second-generation battery pack (the GMO-2) had an energy density of eighty watt hours per kilogram and hoped to put it in production by the end of 1997. “Slide 48 MBI,” Annual Meeting 1997, 58, box 96, ECD Annual Meetings, 1996–1998, SROP.

68 Stempel made these assertions in a letter to Robert C. Purcell, executive director of GM's Advanced Technology Vehicles division. Stempel to Purcell, 14 Apr. 1997, box 32, GMR Meeting 7/23 Baker, RCSP. With the court victory all but certain, Stempel wrote Pearce: “Thank you for all your valuable help on the Matsushita-Ovonic matter … now that the MBI EV battery market position has been defined (and limited), it is clear that GM can be in a dominant, controlling position with NiMH EV batteries.” Stempel to Pearce, 14 Apr. 1997, box 32, GMR Meeting 7/23 Baker, RCSP. The U.S. District Court for the District of Delaware formally dismissed Matsushita's lawsuit on 23 Dec. 1997. Energy Conversion Devices, “MBI Litigation Concluded in Favor of ECD,” news release, Jan. 5 1998, 1–2, box 32, Black Folder (ECD/Ovonic/NiMH Update), RCSP.

69 Valerie Reitman, “Toyota to Sell Hybrid Gas-Electric Car: Auto Maker Cites High Efficiency, Low Emissions,” Wall Street Journal, 26 Mar. 1997, A12; “(Fairly) Clean Cars,” New York Times Sunday, 30 Mar. 1997.

70 Subhash K. Dhar to Ovshinsky, “Subject: Hybrid Electric Vehicle,” 21 Mar. 1997, and Paul R. Gifford to Ovshinsky, “Meeting with GM Hybrid Vehicle Team,” 21 Mar. 1997, both in box 32, HEV Batteries Ovonic, RCSP.

71 Robert Stempel, “Trio Report: Summit of 8 Meetings, Denver, Colorado,” 20 June 1997, 2–3, box 32, dustcover 3, unorganized/misc 1, RCSP; and Stempel hand notes, “H.J. Pierce [sic] Office, 9:30 AM 13 Aug. 1997,” 1–3, box 32, unmarked folder 2, RCSP.

72 Satoshi Ogiso, “The Story behind the Birth of the Prius, Part 2,” Toyota Global website, 13 Dec. 2017, https://newsroom.toyota.co.jp/en/prius20th/challenge/birth/02/.

73 On the MITI subsidy, see Itazaki, Prius, 381. The Prius also benefited from the Bush administration's Energy Policy Act of 2005, which provided a tax credit of up to $7,500 for conventional hybrid passenger vehicles up to a total of sixty thousand units until December 31, 2010. See Public Law 109-58, Energy Policy Act of 2005, 8 Aug. 2005, 1043, 1047, 1049; and Molly F. Sherlock, “The Plug-In Electric Vehicle Tax Credit,” Congressional Research Service, 14 May 2019, https://fas.org/sgp/crs/misc/IF11017.pdf.

74 Ogiso, “Story.”

75 Itazaki, Prius, 115, 270, 340; United Nations, Report of the Conference of the Parties on its Second Session, Held at Geneva from 8 to 19 July 1996. Addendum. Part Two: Action Taken by the Conference of the Parties at its Second Session. 29 Oct. 1996. 4, https://unfccc.int/documents/977.

76 For an influential analysis of the TPS, see Steven J. Spear and H. Kent Bowen, “Decoding the DNA of the Toyota Production System,” Harvard Business Review, Sept.–Oct. 1999, 96–106. For an example of the influence of the TPS in nonautomobile fields, see Christensen, Clayton M., King, Steven, Verlinden, Matt, and Yang, Woodward, “The New Economics of Semiconductor Manufacturing,” IEEE Spectrum 45, no. 5 (May 2008): 24–29CrossRefGoogle Scholar.

77 Gregory L. White, “GM Stops Making Electric Car, Holds Talks with Toyota,” Wall Street Journal, 12 Jan. 2000, A14; “Texaco to Acquire General Motors’ Share of GM-Ovonic Battery Joint Venture,” Business Wire, 10 Oct. 2000, 1. Shortly after Texaco acquired GM's stake in GM-Ovonic, Texaco was itself absorbed by Chevron; see Boschert, Sherry, Plug-In Hybrids: The Cars That Will Recharge America (Gabriola Island, BC, 2006), 44–45Google Scholar, 82–83.

78 The liquidation of the EV-1 took place in the context of GM's gradual divestiture of its electronics and parts empire. In 1997, the automaker sold Hughes to Raytheon and GM's Automotive Components Group (renamed Delphi Automotive in 1995) absorbed Delco Electronics in 1997 before GM spun off Delphi in 1999.

79 Salon, Sperling, and Friedman, “California's Partial ZEV Credits,” 3–5: CARB, “Fact Sheet: The Zero Emission Vehicle Program-2008,” 6 May 2008; “California Cuts ZEV Mandate in Favor of Plug-In Hybrids,” Wired, 27 Mar. 2008, http://www.wired.com/autopia/2008/03/the-california/.

80 GM produced some 1117 EV-1s, most equipped with lead-acid battery packs and a few hundred with Ovonic packs. By 2017, Toyota had produced nearly four million Priuses; see Toyota Motor Corporation, “Worldwide Sales of Toyota Hybrids Surpass 10 Million Units,” press release, 14 Feb. 2017, https://newsroom.toyota.eu/global-sales-of-toyota-hybrids-reach-10-million/.