Car Guys vs. Bean Counters - Bob Lutz [70]
In about 2005, I had the thought of creating a fully electric prototype as a show car. It would be an aerodynamic four-seater using very advanced (but unproven) lithium-ion batteries, giving it a claimed range per charge of roughly two hundred miles. A California high-tech idea and prototype company by the name of Applied Minds assured me it could build a running car. Excitedly, I shared this idea with my peers (and Rick Wagoner) at an Automotive Strategy Board meeting, only to be cruelly shot down.
First, it wasn’t known, feasible technology. Second, it would send mixed signals: did GM believe in fuel cells, or did we believe in EVs? Third, our prior experience with EV1 should have convinced us that no market exists. And, finally, the dreaded legal advice: we were engaged, along with most other car producers, in a lawsuit against the State of California over that state’s “EV mandates,” which were to force a certain percentage of vehicles sold in California to be electric. How could we fight the mandate and dangle an EV in front of the public at the same time? Sadly, I saw logic in that one and gave up.
Meanwhile, faced with the pressure of hybridization, GM did commit the massive sums required to engineer and produce our very sophisticated, ultracapable two-mode hybrid system for full-size trucks and sport-utilities. Our thinking was that if you’re going to spend thousands of dollars per vehicle to save 25 percent on fuel, why not do it on the large vehicles that consume a lot of fuel (and that the public wants to buy) rather than on a less-desirable small vehicle that doesn’t use much fuel in the first place?
That sounded convincing to us, but while getting a V8 SUV from 14 mpg in the city to 22 mpg might be a phenomenal technical achievement—it equaled the city number of the much smaller Toyota Camry four-cylinder—it was not dramatic enough to cause the skeptical, stridently anti-GM publications to say anything more than that we had gone from “wholly unacceptable” to merely “awful.” So, the two-mode hybrid system, jointly developed with such industry stalwarts as BMW and the then-DaimlerChrysler, didn’t do much to move the reputational needle out of the red zone either.
Here we were, the company with the best of intentions, vilified for killing EV1 while producing the Hummer H2, seen as pulling the wool over people’s eyes with the fuel cell (“a science project they’ll never put into production, there to make us think they’re doing something”), blessed with merely scant praise for the two-mode hybrid, and all the while compared against wonderful, altruistic Toyota and their “fuel-sipping offerings.” The degree to which Toyota benefited is beyond quantification. The mantle of impeccable greenness that was ceremoniously draped over them had a positive effect on all their vehicles, even the ones that demonstrably consumed way more fuel than the equivalent GM product.
I recall one gas station incident where I asked a woman why she had purchased a new Toyota Sequoia. Her answer was all about fuel economy. The family had considered a Chevrolet Tahoe, but as everyone knew, those were guzzlers. I asked her what her highway mileage was, and she replied, “Oh, about fifteen mpg.” When I told her the V8 Chevrolet Tahoe was rated at twenty-two mpg highway, it was in such conflict with her established belief system that she simply shrugged it off as an obvious fabrication. Thus, the so-called upper funnel measures, as divined by monthly rounds of research (such measures as “familiarity,”“favorable opinion,” “purchase intention”), continued to rise for Toyota, while ours shrank at the same rate. Clearly, something needed to be done.
I was convinced that, following on the heels of the Prius success, Toyota would next stun the world with an all-electric prototype, to be built “some time later.” If they did that, I didn’t see how any competitor could ever make up the resulting reputational hit.
At the Automotive Strategy Board,