Bottled Lightning

by Seth Fletcher

  EV1 drivers adored the car. It was fast, smooth, stylish, and silent. Brand manager Ken Stewart said that EV1 customers were demonstrating a “wonderfully maniacal loyalty.” Francis Ford Coppola, Mel Gibson, and other celebrities leased the car. But while GM was rolling in positive press as a result of the EV1, it was simultaneously lobbying the state of California to dismantle the CARB regulations. The company argued that this legislation was forcing a private enterprise to produce, at enormous expense, a product that nobody wanted. It declared that the best alternative to petroleum was not electricity but hydrogen, and if CARB would just give the automakers time, they would usher in a hydrogen-powered future. To prove that no one wanted electric cars, automakers relied on studies like one conducted by the Berkeley professor Kenneth Train. During CARB hearings in 2000, Train said that his research showed that the only way Toyota could get people to “buy” the electric version of its RAV4 would be to “give the average consumer a free RAV4-EV plus a check for approximately $7,000.” In reply, the California Electric Transportation Coalition commissioned a study that found that the potential electric-car market in California was actually something like 12 to 18 percent of new light vehicles, or as many as 226,800 electric cars a year. Starting in 2002, Toyota put electric RAV4s on the retail market with a manufacturer’s suggested price of $42, 510, which came down to $29, 510 after rebates. Toyota received more orders than it had cars and ended up building additional vehicles to fill all 328 of them. Then it quietly scrapped the program.

  General Motors and DaimlerChrysler eventually succeeded in beating CARB down. GM built the last EV1s in 1999; that generation used nickel-metal-hydride batteries and could run up to 150 miles on a charge. In all, GM leased some eight hundred EV1s between 1996 and 1999. The program was discontinued in 2002, and a year later Rick Wagoner officially canceled the program, saying it was a money loser.

  Then GM made one of the biggest public-relations mistakes in its history: it recalled the cars. GM couldn’t be responsible for maintaining these discontinued cars for the remainder of their fifteen-year warranties, the argument went. You can’t expect us to keep the parts around. A number of EV1 drivers pleaded with the company to let them buy their cars in exchange for freeing GM from warranty obligations, but it didn’t work. GM rounded up the EV1s, hauled them out into the desert, and crushed them. Unfortunately for GM, much of the recall process was caught on tape, and that tape was edited into Who Killed the Electric Car? In 2006, the year the film came out, Rick Wagoner admitted to a reporter that canceling the EV1 had been a serious blunder.

  After the Volt announcement, when the electric car once again appeared to have a chance, those who were there for the EV1 saga insisted that this time, things were different. “In the 1990s we had $20-a-barrel oil,” said Ed Kjaer, director of Southern California Edison’s Electric Transportation Department. “Fuel economy was thirty-seventh on the hierarchy of importance for purchase decision. We didn’t have 9/11, we didn’t have global terrorism, and we didn’t have—and this is the eight-hundred-pounder—China and India. And we didn’t have global warming, in terms of increasing regulatory pressure.” What they did have, and what generated the EV1 and its cousins, was air-quality regulation. Once the automakers succeeded in softening the regulation, what motivation did they have to keep making electric cars?

  Engineers who worked on both the EV1 and the Volt argued that the EV1’s fate portended nothing for the Volt. “It was a different proposition for the EV1,” said Jon Bereisa, chief of engineering on the EV1 and an early member of the Volt team. “The battery technology was not there and we knew it, but we believed that we could make up for it by designing a highly efficient vehicle. So what we did is we set about to make the world’s most efficient vehicle.” The second-generation EV1 extended the car’s range to as much as 160 miles, but, according to Bereisa, the large nickel-metal-hydride batteries that made the additional range possible contained costly materials such as cobalt and vanadium and were, as a result, outrageously expensive—as much as $40,000 or $50,000 a battery. Bereisa estimates that GM lost $1 billion on the EV1 project. “We established technical feasibility,” he says. “You could say we nailed it to the wall. But we really did not achieve commercial viability.”

  The first step toward making the Chevrolet Volt commercially viable was filling the giant blank spot at the heart of the car—developing the battery.

  Before the concept was even announced, GM had approached General Electric about supplying the batteries for the Volt. The idea was two American icons coming together to build the car of the future. But it wasn’t to be. “We were hoping that we could in fact announce some sort of partnership with GE when we showed the Volt,” Bob Lutz said, “and as it turned out we couldn’t. They were not ready to commit to lithium-ion production.”

  Instead, GM began searching the globe for potential partners. “We went into a very profound analysis of the top twelve or fourteen lithium-ion battery producers of the world and we assessed them on such things as size, technological capability, reliability in the field, level of automation in their plants, suitability of the chemistry,” Lutz said.

  The month after the reveal of the concept car, delegations from eight battery manufacturers began filing one after another, props and proposals in hand, into the massive glass-walled Vehicle Engineering Center on GM’s sprawling, Eero Saarinen–designed Tech Center campus in Warren, Michigan. Start-ups and multinational giants alike, these companies had survived the initial cut in the Chevy Volt battery-supplier derby, in which some twenty employees from various GM divisions spent two months scrutinizing proposals. They graded each company’s batteries on energy and power density, temperature performance, safety, life span, and cost. They weighted each metric by importance and factored in what Tony Posawatz diplomatically called “qualitative factors,” such as, Are we going to hate working with these guys?

  Each supplier had to prove that its product could store 16 kilowatt-hours of energy, drive the Volt forty miles on electricity alone, launch the car from zero to sixty in eight seconds, run for at least ten years, withstand five thousand full discharges, lose no more than 10 percent of its charge capacity along the way, fit into the tunnel that houses a conventional car’s driveshaft, weigh no more than four hundred pounds, and cost as little as possible. And never, ever explode.

  Any manufacturer that relied on lithium-cobalt-oxide batteries, which by then were being used in billions of laptops and cell phones, would have to stage a particularly persuasive show. Yes, Tesla was using them, but of the several varieties of lithium-ion batteries on the market or in development, it had recently become clear that lithium-cobalt-oxide batteries were the most prone to the chemical reactions that cause what engineers euphemistically call “thermal runaway.” And in early 2007, just months after Sony lithium-ion batteries around the world started going up in flames, this fact was particularly raw.

  The crisis began in December 2005, when laptops powered by Sony lithium-ion batteries began catching fire. Videotaped and YouTubed laptop fires began to make the news. In June 2006, images of a laptop bursting into spectacular flames at an Osaka, Japan, business conference circulated on the Internet. The following month a UPS cargo plane was engulfed by fire at the Philadelphia International Airport, and lithium-ion batteries were immediately suspected. That same month, a Sony battery inside a Dell laptop caught fire in a Nevada man’s truck, triggering ammunition he had stored in the glove box, igniting the gas tank, and blowing the truck to pieces. On August 14, Dell recalled 4.1 million laptops in what The New York Times, citing the Consumer Products Safety Commission, called “the largest safety recall in the history of the consumer electronics industry.” The battery disaster made its way into the casual tech argot of the day, as in this blurb for a new flame-retardant laptop cover published on the blog Engadget that September: “We’re not sure if these new fire-retardant covers are meant to protect nearby objects in the event of battery explosion, or if they’re meant to
protect the MacBook from thermal disaster in its surrounding environment—but either way, they’re a pretty stylish new necessity.” By October, Sony had recalled nearly ten million batteries worldwide. The explanation appeared to be that in a certain batch of batteries manufactured at Sony’s Fukushima plant, metal fragments made it into the electrolyte during the process of crimping shut the battery’s metal shell. Eventually, in some cases, those metal fragments caused a short circuit; in the worst cases, that led to a fireworks display and a viral media phenomenon. The episode made clear the risks of packing so much energy into such a small container. If something goes wrong, there’s a lot of energy to be released.

  So the Volt-battery-supplier hunt took place in a sensitive context. Meanwhile, Bob Boniface’s team was busy with the production design for the Volt—a project he hadn’t necessarily expected to still be working on. “I didn’t think it was gonna go over that well,” he said. “There was an outpouring of goodwill. I miscalculated.”

  Soon there were signs that GM felt cornered by the Volt—that it knew it might have on its hands, but that it was also afraid the car had the potential to backfire in a devastating way. On March 23, 2007, an article appeared in The Detroit News headlined “GM Tries to Unplug Volt Hype.” According to the piece, the fact that the Volt was based on batteries that the company didn’t yet have in hand “led to intense debate within GM over whether it was wise to show the Volt in Detroit. And now that the world’s waiting for GM to deliver what could be the biggest environmental breakthrough so far this century, company officials are actively trying to temper expectations.” The article tells of a GM-initiated background session in which journalists were reminded of the many technological issues that, taken together, meant that the car might never actually reach the road. “The pressure is intense,” said Nick Zielenski, chief engineer on the Volt. “We came out with this idea and now people are saying, ‘Okay, where is this car? We want it now.’”

  While the expectations management happened on one front, the scramble to build the Volt continued on many others, and in the battery-supplier competition, the finalists soon became clear. As Lance Turner, lead engineer for battery development, put it, “It’s very easy to deal with someone close by”—that would be Compact Power, Inc., whose Troy, Michigan, offices are a fifteen-minute drive from GM’s Warren battery lab—“and it’s very easy to deal with someone we’ve dealt with before.” That would be Continental, the German auto parts manufacturer responsible for bundling battery cells from a young Boston-area start-up called A 123 Systems into a functional battery pack.

  In addition to pitting company against company, the Volt battery competition would be a contest between two competing strains of lithium-ion battery chemistry: lithium manganese oxide, which Compact Power used, and lithium iron phosphate, which A123 built its company on. Those two chemistries differed greatly from one another and from the lithium-cobalt-oxide batteries used in consumer electronics. Because both of them did away with expensive, toxic cobalt, both were potentially cheaper and better for the environment than lithium-cobalt-oxide. They were also safer, and that was A123’s strongest selling point: the double covalent bonds that held the phosphate group together were the strongest bonds in nature, and that made it extremely difficult for that chemistry to react inappropriately. The trade-off for greater inherent stability, however, was lower energy density than its competitor from Compact Power.

  By the company’s annual shareholder meeting in June, Bob Lutz was ready to announce the finalists. There was a certain David and Goliath dynamic in the matchup. Compact Power (often called CPI) is the frontier settlement of one of the largest consumer-electronics manufacturers on the planet—the Korean company LG Chem. Behind CPI’s modest Troy headquarters lies the unseen power and weight of a company that builds tens of millions of lithium-ion batteries each year. Behind A123 was buzz. By 2007, the press had become infatuated with A123, the company that MIT professor Yet-Ming Chiang and three colleagues had founded six years earlier. They were made for the media, a clean-energy throwback to the hip start-ups of the dot-com era, and flattering profile after profile portrayed the young company as the very picture of American high-tech ingenuity.

  CPI had been working for five years on the lithium-manganese-oxide chemistry that John Goodenough and Michael Thackeray first developed at Oxford in the 1980s. It was attractive for electric cars because of the low cost of manganese and because of its inherent power, which is best understood through an analogy: Energy is how much water fits in a bottle; power is how quickly you can pour it out. In a car, power equals acceleration.

  Energy capacity was another major concern. “We had to have a cell that effectively doubled the energy capacity of a typical hybrid cell,” said Prabakhar Patil, the CEO of Compact Power. CPI’s seventy staffers worked nights and weekends for four months after the shareholder meeting. They then surprised the engineers in GM’s battery lab by delivering their first finished battery pack right on time, on Halloween day.

  At the same time that GM technicians worked eagerly to hook the CPI battery to the machines that would test its worth, and at the same time the local papers were gleefully reporting on the first battery’s arrival in Warren, A123’s first pack was stuck in Customs. The U.S. Department of Transportation considers lithium-ion batteries dangerous material, which made it difficult to get the pack delivered from the packaging facilities in Germany. It probably didn’t help that the stainless-steel casing wrapped around A123’s cells made the battery look like a nuclear weapon from a Jerry Bruckheimer movie.

  After more than two months of ulcerous delay, in January 2008, Customs released the batteries. Jon Lauckner was in Washington, D.C., sitting on a panel on plug-in hybrids at the Center for American Progress, and he insisted he be told the minute the battery reached the lab. Lauckner took the stage and began to field questions from the audience. “Where are you with the second battery?” someone asked. Lauckner looked down at his BlackBerry and replied, “It arrived in our lab five minutes ago.”

  The batteries that both companies submitted weighed approximately four hundred pounds and, stood on end, reached a height of six feet. Each $10,000-plus, T-shaped monolith contained more than two hundred individual 3.6-volt lithium-ion cells, bundled together in groups of three, then wired in series and kept from overheating by an elaborate liquid cooling mechanism. A computerized monitoring system inside each battery pack conducted this little orchestra, coordinating the actions of the individual cells, balancing voltage, and watching, above all, for any indication that a cell might be failing, shorting out, or otherwise threatening the stability of the system. The batteries were engineered to propel the 3,520-pound Volt forty miles. (To make sure the battery lasts the warranty-required ten years and 150,000 miles, the Volt team initially decided to use only half of the 16 kilowatt-hours, never charging it above 80 percent of capacity and never depleting it below 30 percent, thereby reducing the chemical strain on the battery’s cells.)

  By the summer of 2008, those batteries were powering the earliest Volt prototypes around GM’s proving grounds in Milford, Michigan. These were the Mali-Volts—Chevy Malibus gutted and fitted with the Volt power train. In early June, Lutz described driving the Volt as both thrilling and eerie. “It’s like being in a conventional car at seventy miles an hour and coasting with no engine,” he told a reporter for Green-fuelsforecast. com. Back in the lab, he reported, the batteries were performing well. Some of the welds that tie the individual battery cells together had failed, but that was expected and not fundamentally a big deal; the team was increasingly confident. “The guys are now convinced that unless we have some sudden whoops! that we don’t see, we’re good for November 2010,” he said.

  Such a showstopper, if it did appear, would most likely show in longevity tests at GM’s Warren battery lab. There, those celebrated first two battery packs had, since their arrival, been constantly subjected to the abuses of the pack cycler, a refrigerator-size device that tests cycl
e life—how many times the battery can be discharged and charged again without deterioration—and another apparatus called the thermal chamber. In two years on the pack cycler, engineers can put a battery through the equivalent of 150,000 real-world miles. The only way to see how a battery ages over ten years, though, is to make the battery, use it for ten years, and see what happens—unless you have only two years, as GM did. Then you artificially accelerate the aging process by heating the batteries in a giant metal sauna for months on end. The first Volt batteries were scheduled to hit the crucial ten-year mark in April 2010—a scant seven months before the Volt was set to go into production.

  The general vibe at an industry convention may or may not be a valid metric for measuring the momentum behind a new technology. Nonetheless, at the Plug-In conference in July 2008, it became clear that even the most gun-shy members of the electric-car activist scene, people for whom the failure of the EV1 remained an exposed nerve ending, were allowing themselves to feel optimistic. This time, so many factors were aligned—$4-a-gallon gas, growing awareness of global warming, the desperation of the Big Three automakers, the major advance of the lithium-ion battery. “I’ve worked in the battery business for twenty-nine years,” Michael Andrew, a project manager at Johnson Controls– Saft, a joint venture between the Milwaukee-based auto-parts supplier Johnson Controls and the French battery company Saft, told the audience during a preconference workshop on lithium-ion batteries. “What’s changed to cause so much optimism? This is it.”

  That didn’t mean everything was going smoothly. Tesla had had a rough couple of years since unveiling the Roadster. Depending on whom you ask, the problem was either Martin Eberhard, Elon Musk, or both. According to Eberhard, Musk was a disruptive force, intruding on the design process, creating delays, and driving up costs by changing the headlights at a cost of $500,000, redesigning the chassis to lower the door sill by two inches (his wife had trouble getting out of the car; cost: $2 million), ordering custom seats ($1 million) and insisting on a new carbon-fiber body rather than the fiberglass panels used originally. According to Musk, Eberhard had proved a disastrous CEO, which is why in 2007 he was demoted and then pushed out of the company. When Musk told his side of the story to Fortune that July, he said the only reason he had kept quiet so far about the conflict was that he “was too busy trying to fix the fucking mess [Eberhard] left. I will say, I have never met someone who is as capable of creating such a disinformation campaign as Martin Eberhard.”