The reviews came in quickly, and they were exuberant. Even the editorial board of The New York Times got caught up in the excitement. In an editorial with the headline “Go Speed Racer!” the board wrote that “Tesla Motors, a Silicon Valley start-up, has developed a two-seater that goes from zero to 60 miles an hour in four seconds, leaving the days of electric cars as glorified golf carts in the dust.” Later that year, Time would name the Tesla Roadster one of the best inventions of 2006.
In Detroit, Bob Lutz followed the enthusiastic press coverage of Tesla with growing frustration. This was not a good year for the reputation of General Motors, where Lutz, a towering seventy-four-year-old, was head of global product planning. The company was drowning in cost. The health-care and pension deals it had struck with the United Auto Workers over the decades meant that the company was spending some $6 billion a year on benefits. At the same time, its concentration on big SUVs and trucks was backfiring as drivers began to move away from giant gas-guzzlers. GM was operating according to a business formula that left no room for a sudden spike in oil prices or a shift in driver preferences. As its products became less profitable, its obligations to its employees became more expensive. In 2005, CEO Rick Wagoner was in the middle of a major restructuring of the company, cutting costs and renegotiating health care with the union. But it wasn’t enough. In the first quarter of 2005, the company lost $1.1 billion. That number would soon be dwarfed by the almost incomprehensible losses GM would register in the coming years.
In January 2006, Who Killed the Electric Car? premiered at Sundance, and by the summer it was showing in theaters and bound for sleeper-hit status. The documentary helped harden the perception of General Motors as chronically insincere in its alternative-fuel efforts.
Then there was the Prius. When Toyota began selling its famous hybrid in the United States in 2001, Lutz and others at GM dismissed it as a marketing stunt. An awkward little econo-box that uses an expensive nickel-metal-hydride battery to squeeze out a few more miles to the gallon? Please. This was not a real car. This was not a threat. General Motors management persisted in believing that the Prius was not a threat until it was. The Prius gave Toyota an extraordinary image boost. By the time the Tesla and Who Killed the Electric Car? came out, Toyota was on its way to surpassing General Motors and becoming the world’s largest automaker.
Lutz had actually been fighting for a counterpunch of an electric-car project for some time. “I started proposing that we do something all electric with lithium-ion batteries about the time that Toyota was really starting to reap the PR benefit from the Prius. That would’ve been around 2004,” Lutz told me. “My original concept was more like the Nissan Leaf. In other words, a huge 25-kilowatt-hour lithium-ion battery to provide a range of about a hundred miles. And that was roundly rejected because of everybody remembering the misery of the EV1 and the bad press we got.”
Lutz also encountered this argument: We already have hydrogen fuel-cell vehicles! GM was indeed spending vast amounts of money on hydrogen, the alternative-energy red herring of the early 2000s. But there was a growing realization that the infrastructure required to replace gasoline with another liquid fuel—one that, incidentally, was most often derived from natural gas—would be staggeringly expensive and take decades to build. “I said, ‘Well, to be honest, nobody really takes that as seriously as they should because it is too easy to say, “GM is working on a technology that will be very difficult to generalize because of the absence of a hydrogen-refueling infrastructure,”’” Lutz said.
Nothing less than an electrically driven car would appease these critics. Lutz’s argument was, “Whether we like it or not, there are the environmentally conscious people, the government people in California, the car people—everybody seems to believe that the electric vehicle is the answer. And with the advent of lithium-ion batteries, I think that we’re getting to the point where it is feasible.”
His idea was killed again on technical grounds. “I had some battery experts explain to me that lithium ion was not suitable for automotive use because it is an energy battery, not a power battery. It’s okay for powering laptops and devices, but you can’t make a power battery out of lithium ion, et cetera et cetera. So I kind of grudgingly let it go to sleep for a while.”
Then he started hearing rumors about the Tesla Roadster.
“I had an outburst at one of the big automotive strategy committee meetings. I said, ‘How is it that everybody at GM convinces me that this can’t be done, and we’re supposedly the world’s most competent car company, and I have every expert explaining to me that lithium batteries won’t work. And here is this outfit in California that nobody has ever heard of, and they are gonna put a car on the market with lithium-ion batteries, it’s gonna accelerate from zero to sixty in four-point-something seconds, gonna have a top speed of 140 and a two-hundred-mile range?’” The response: Don’t believe all that hype, Bob. “I said, ‘All right, discount everything by 20 percent and it is still sensational.’And of course, we didn’t know about the $100,000 price tag back then, or the fact that the production would be so limited. But to me, it was the signal that, hey, there is a way to get there with lithium-ion batteries.”
Lutz, a four-decade veteran of the automotive business, had already had a remarkable career. It began in the golden years of the early 1960s. Would it end with the greatest car company the world had ever known disgraced and teetering on the brink of bankruptcy? By 2006, Lutz had become a symbol of Detroit, an astonishingly candid, gruff-voiced cigar smoker and whiskey drinker, an old-school charmer, an icon from the Good Old Days. An ex-marine born to a Swiss banker in 1932, he famously flew fighter jets on the weekend and drove a Corvette to work every day.
Educated at the University of California at Berkeley before serving as an active-duty marine from 1954 to 1959, Robert A. Lutz got his start in the car business at General Motors of Europe in 1963. In 1971, he decamped for a three-year stint at BMW, where he was in charge of global sales and marketing. Next came a twelve-year tenure at Ford. By then he was becoming known as one of the most colorful men in Detroit, earning a place in David Halberstam’s epic story of the battle between Ford and Nissan, The Reckoning. In 1986, Lee Iacocca recruited Lutz to help rescue Chrysler. In his twelve years there, his crowning and most personality-appropriate achievement was the production of the Dodge Viper, a V-10-powered hell demon of a two-seat sports car.
Next he spent four years at Exide Technologies, the lead-acid battery manufacturer descended from the Electric Storage Battery Company, which Thomas Edison spent the first decade of the twentieth century racing against. Lutz’s time at Exide gave him a strong appreciation for the battery. “Exide was never a large producer of advanced batteries, but we did have a subsidiary in Germany that did very exotic batteries for space applications,” he said. “For instance, batteries that would power tiny stepper motors that would make minute adjustments on space telescopes or space lasers. And these were batteries that had to hold their charge for ten to fifteen years, because it’s tough to get up into space to swap batteries. We had all kinds of advanced primary batteries for munitions for the NATO military. I found that fascinating.”
In 2002, he returned to GM. Four years later, the company was a disaster, but the downfall had been a long time coming. GM was crippled by decades of accumulated health-care and pension obligations and hopelessly dependent on big SUVs and trucks, which were inordinately profitable but reliable sellers only in an era of reliably dirt-cheap oil. Any shift in consumer preference would expose GM as dangerously dependent on the likes of its Hummer. That, of course, is exactly what came to pass.
Fixing General Motors would require renovating the culture and corporate organization, taking a thresher to the company’s cost structure, and rebuilding the company’s ruined reputation among car buyers. As head of global product planning, fixing the company’s reputation with good cars and advanced technology was Lutz’s job.
In early 2006, he and a handful o
f other high-level executives decided to begin work on a project unimaginatively but tellingly called iCar. Lutz enlisted Jon Lauckner, vice president for global product development, to work up the new car. Lauckner is a tall, vaguely haughty engineering savant who started his career as an employee-in-training with Buick in 1979 and worked his way up to vice president of global program management for GM. When he’s on his best behavior, he gives the impression of actively restraining himself from vocalizing the constant stream of withering retorts that are running through his brain.
The iCar was a vessel for every engineer’s favorite alternative propulsion system. Ethanol fans said it should be an ethanol car. Hydrogen believers argued that it needed a fuel cell. Despite the EV1 debacle, GM still had electric-car lovers among its ranks, but a purely electric car seemed too limited. Lauckner is credited with the idea that united these warring factions: building an electric drive system with a dedicated spot for backup power.
“I sat down with Jon Lauckner,” Lutz said, “and he convinced me, you do something with a huge battery, it’s gonna cost a fortune, it’s gonna be extremely heavy, and you’ll have a limited range. The far better proposition would be, let’s go for the eighty/twenty solution”—a battery pack big enough to cover 80 percent of the people, plus gas power for backup. “I said, ‘Boy, that sounds real good.’ Jon did some fast calculations and figured that somebody who drives sixty miles a day would probably be looking at a real-world 150 miles per gallon. Well, that got me very excited. So we talked to design and started doing some sketches of the original prototype Volt, and we talked to some battery suppliers, just enough to know what an automotive cell would look like.”
The decision was to pair lithium-ion batteries with a small gasoline “range-extending” engine that would generate electricity once the battery was depleted. The batteries would store enough energy to travel forty miles before the backup gas engine was activated. After examining the market research, the Volt group realized that forty miles a day would cover 78 percent of American drivers—those people could theoretically never use gasoline. Everyone else would get gas mileage that was simply unheard of.
Lutz took Lauckner’s idea to the boss. “I talked to [CEO] Rick Wagoner a few times and said, ‘Rick, look, we’d like to do this concept car for the show, just a concept car. It’s not a pure electric, but it would introduce the concept of lithium ion,’” Lutz said. “I would say there was grudging acceptance of the idea. And one of the reasons there was acceptance was that the board of directors, which contained some people who were very much into technology, like Kent Kresa, the former CEO of Northrop [Grumman], were actively pushing: ‘When are we going to demonstrate technological superiority to Toyota? Why are we sitting back and taking this rather than making some sensational move?’ So I think that pressure from the board and my constant wheedling finally got, ‘Okay, all right, let’s do a concept car.’”
Bob Boniface, director of GM’s Advanced Design studio, had just finished his design for the revived Camaro and was enjoying the post–Detroit Auto Show lull, an annual breather before the design team begins working in earnest on the next year’s show cars. “In early ’06, word came down that next year Lutz wanted to do a ‘technology-based vehicle,’” Boniface said. “So I ask, ‘Does he want this, does he want that?’ And they say, ‘I don’t know, just a technology-based vehicle.’” Boniface rolled his eyes and shrugged his shoulders, palms in the air. We were talking the evening before the beginning of the 2010 New York International Auto Show, standing next to a finished Volt prototype. “So we started working up all kinds of crazy stuff—maglev cars, cars without wheels. And then I finally get some clarity: ‘No, you don’t understand: Lutz wants an electric car.’”
Even before the Volt team had its first official employee, rumors about the car started leaking. Chelsea Sexton, one of the stars of Who Killed the Electric Car?, began hearing rumors of a new GM electric in March 2006. “One of my friends [inside GM] said, ‘We’re working on something. I can’t tell you what it is, but it would make you really happy,’” she said. “It was very clear that it had a plug on it, but he wouldn’t tell me any more than that.” As it happens, that was the month that GM’s Automotive Strategy Board approved the Volt.
In April, Tony Posawatz, a short, stout engineer who looks like he’d make a good high school wrestling coach, was hired to lead the Volt program. He was employee number one. Posawatz faced a dilemma that other GM engineers had faced before him: Do I sign up to lead an electric-car project, knowing that historically GM electric-car projects are doomed and possible career killers? He hesitated. He doesn’t do concept cars, he protested. Lauckner and Lutz assured him that while, yes, the Volt was a concept car, it wasn’t a concept concept. “I never looked at it as a concept that we weren’t going to execute,” Lutz said. “One of the reasons I didn’t is that I knew, I knew in my gut, that the concept of a lithium-ion-powered vehicle with a forty-mile electric range and then another, say, almost three hundred miles beyond that, was going to be a very, very compelling proposition.”
Soon Boniface left Advanced Design to lead the Volt design team. Three GM design studios—Boniface’s studio in Warren, Michigan, another in Hollywood, and another in Coventry, England—began working up concepts. Boniface’s studio submitted five themes, the English studio did two, and the Hollywood studio did one. In time, a theme from Boniface’s team was chosen as the show car.
The Volt project began attracting veterans from the EV1 days, engineers like Andrew Farah and Jon Bereisa. Meanwhile, in the outside world the whispers about GM’s secret electrified car were getting louder. Sexton recalls standing with crew members on a Minneapolis street corner at the end of the film tour for Who Killed the Electric Car? Someone’s cell phone rang. It was a reporter. “They said, ‘Do you want to comment on the fact that GM is about to unveil a plug-in car at the end of the year?’ And we thought: Interesting.” The information aligned with everything Sexton and her colleagues had been hearing.
In November, Rick Wagoner teased the Volt during a speech at the Los Angeles Auto Show, emphasizing GM’s commitment to alternative fuels and hinting that something big was on the way. That same month, as production engineering on the car began, GM held an advance press briefing to get journalists accustomed to the idea of the Volt—that it wasn’t exactly an electric car, but it also wasn’t a normal hybrid, and it was certainly not a joke.
GM was set to unveil the Volt concept at the 2007 North American International Auto Show in Detroit, but the company remained dangerously noncommittal about the car. Days before the show, GM executives were still debating whether it made sense to put the Volt into production. Lutz knew that it would be a public-relations catastrophe to show the car and then never build it, so he gave his colleagues an ultimatum: If we’re not going to build it, we can’t show it. We have to decide right now. Ultimately, of course, the show went on. At the unveiling, the official status was that GM was “actively studying production.” “We all decided that it was just one of these programs where, this is where GM can finally demonstrate to the world that when it comes to advanced propulsion technology, nobody else in the world can lay a glove on us,” Lutz said. “It became an important act of corporate will and demonstration of the corporate mastery of technology. And I think in this area everybody else is three years behind us.”
The Volt reveal was over the top even by North American International Auto Show standards. It began with a video projection on a large rounded screen behind a stage. Images of cuneiform tablets gave way to Gutenberg’s printing press before flashing forward to a twentieth-century newspaper press and then cutting all the way back to the Lascaux cave paintings. “Can you imagine modern life without the invention of the printing press?” a deep male commercial-ready voice-over intoned. “The photograph? The automobile?” Here the video raced through the history of the automobile as told by GM, pausing on an image of the EV1. “And yet, the history of innovation is largely one of evol
utionary improvements.” A space shuttle blasted off. A space station orbited Earth. “When one change inspires countless others, setting in motion events that will forever alter history.” Neil Armstrong and Buzz Aldrin hopped around on the moon. Benjamin Franklin’s kite hovered. Thomas Edison’s visage covered the screen for a few seconds, providing an unsubtle hint about where this was going. “It only takes a single idea to spark the flame that lets us see all the challenges in new eyes and a better world in a flash of light.”
Rick Wagoner stepped onto the stage. “About six weeks ago at the Los Angeles Auto Show, I delivered a speech on a very important topic for all of us: the inevitability and the promise of energy diversity,” he began. “I highlighted some serious concerns about sustainable growth, the environment, and energy availability and supply, issues that have come to be called energy security. I made the point that it is highly unlikely that oil alone will supply all the world’s rapidly growing automotive energy requirements.”
The language Wagoner used to describe the implications of this energy crunch suggested that GM had decided to deny that they had ever turned away from electric cars. “At GM this means we’ll continue to improve the efficiency of the internal combustion engine as we have for decades,” he said. “But it also means that we’ll dramatically intensify our efforts to displace traditional petroleum-based fuels by building a lot more vehicles that run on alternatives such as E85 ethanol, and very importantly by significantly expanding and accelerating our commitment to the development of electrically driven vehicles.”
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