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As Oil Prices Rise, Carmakers Look to Electric Future

June 25, 2008 at 6:30 PM EDT
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Rising oil prices and improvements in battery technology are fueling new interest in developing electric cars. Spencer Michels reports on how industry giants and start-up car companies alike plan to release new vehicles by 2010.
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SPENCER MICHELS, NewsHour Correspondent: For decades, the American public has been taunted with the promise that noiseless, gasoline-free, powerful, and sleek cars that run on cheap electricity were just around the corner.

That moment may finally be at hand, according to General Motors’ chairman Rick Wagoner.

RICK WAGONER, CEO, General Motors: The auto industry can no longer rely almost exclusively on oil to supply the world’s automotive energy requirements.

SPENCER MICHELS: Cars that don’t use gasoline but run on electricity have long been almost ready, but batteries that would stay charged for a long ride were not.

In 1914, Henry Ford’s wife drove around in this electric beauty. And in the last 20 years, big automakers rolled out a series of electric prototypes and hinted they would be available soon.

In 1996, I went for a ride in a $19,000 all-electric sports car called a Zebra, made by a startup in California whose part-owner thought the future looked bright.

GARY STARR, Zebra Motors: We’re taking orders for the first limited run of 500, which will be built next year.

SPENCER MICHELS: But Zebra, like a lot of optimistic electric car makers, went out of business, and its successor company, while producing scooters, bikes, and some short-range vehicles, has not delivered electric full-scale cars yet.

Also in 1996, the most famous electric vehicle of all was put on the market, General Motors’ EV1, which it leased to motorists. But in 2003, GM pulled the plug, recalled the cars, and claimed the public wasn’t ready and the cars were not profitable.

The revival of electric vehicles

Elon Musk
Founder, Tesla Motors
I've actually made a prediction that, within 30 years, a majority of new cars made in the United States will be electric. And I don't mean hybrid; I mean fully electric.

SPENCER MICHELS: The documentary, "Who Killed the Electric Car," told of how GM and Honda physically crushed all the electric vehicles they had produced. The film blamed GM and others, including the oil companies, for conspiring to eliminate non- gasoline vehicles.

Whatever happened in the past, GM's boss says, today, much has changed.

RICK WAGONER: I guess I'm not going to spend a lot of time looking into the rearview mirror, but what has changed is energy prices are up. And I don't think it's a cyclical thing.

In addition, there's a lot more focus in society on CO-2 emissions, and it's making clear to me that consumers have different expectations today and are willing to make different tradeoffs for fuel economy than they were in the past. And if we want to be successful, we've got to get out in front of that.

SPENCER MICHELS: Some companies already say they are in front. Tesla Motors, in California's Silicon Valley, is starting to produce a two-seat electric sports car that is selling for $109,000. The company has orders for more than 1,000, selling out its expected first-year production.

Tesla's founder, 36-year-old Elon Musk, who started PayPal, has invested $50 million in the company and has no doubt about the future.

ELON MUSK, Founder, Tesla Motors: I've actually made a prediction that, within 30 years, a majority of new cars made in the United States will be electric. And I don't mean hybrid; I mean fully electric.

SPENCER MICHELS: The Tesla sports car, called the Roadster, accelerates from zero to 60 in 3.9 seconds, which, I can attest, is breathtaking.

ELON MUSK: Well, this is faster than any Ferrari or Aston Martin currently in production.

It has fantastic handling, by the way. I mean, this car will crush a Porsche on the track, just crush it. It uses half the energy and creates less than half the CO-2 per mile of a Prius.

SPENCER MICHELS: It takes about three-and-a-half hours to charge the Tesla's batteries. The electricity costs about $4, and the charge lasts just 225 miles, something the company hopes to improve.

The battery, of course, is the key to the Tesla. It's powered by nearly 7,000 of these, lithium-ion batteries, the same kind that powers your computer. And they go into this metal case, which then goes into the car. It weighs 1,000 pounds.

ELON MUSK: This is really about leveraging a completely new technology that the big incumbent car companies don't really understand that well. And it's something that is well-suited to Silicon Valley, where electrical engineering expertise is the greatest in the world.

Challenges of low-cost production

Rick Wagoner
CEO, General Motors
We had about 100 years of an auto industry in which 98 percent of the energy to power the vehicles has come from oil. We're really going to change that over the next time period.

SPENCER MICHELS: While Tesla boasts about its advances in battery technology, a bigger challenge will be mass producing less expensive electric cars in the future, says GM's Rick Wagoner.

RICK WAGONER: We've watched with admiration as to what Tesla is doing. It's fine if you're making 1,000 or 2,000 of an electric car, but it's not going to have a big dent in oil consumption in the country or CO-2 emissions. What's going to have a big dent is if you can do 100,000, 200,000, 500,000, a million units.

SPENCER MICHELS: Figuring the day of mass-produced all-electric cars is still far off, a non-profit group called CalCars is working to convert hybrid cars like the Toyota Prius to nearly all electric.

CALCARS EMPLOYEE: I've got an extension cord ready for you.

SPENCER MICHELS: At the Luscious Garage in San Francisco, Carolyn Coquillette adds extra batteries to the Prius, which then can be charged using household power. The conversion costs more than $5,000, which CalCars' Felix Kramer admits is a lot.

FELIX KRAMER, CalCars: The CalCars' plug-in hybrid conversions are simply a strategy. They're to build awareness and support for the carmakers to win. So the big win is when the carmakers build them in the millions.

SPENCER MICHELS: In fact, Toyota plans to bring out a hybrid plug-in in 2010, as does GM, with a car called the Volt.

RICK WAGONER: We had about 100 years of an auto industry in which 98 percent of the energy to power the vehicles has come from oil. We're really going to change that over the next time period, things like battery development and applying batteries to cars, as we're planning on doing with the Volt, is an important step, kind of, in the next 100 years of the auto industry.

Making hydrogen-based technology

Mary Nichols
California Air Resources Board
Right now, the little fuel cells are just not that durable and so these cars don't have the range. The gold standard that we're talking about is a 400-mile car.

SPENCER MICHELS: Some car companies, like Ford, are betting on yet another technology: hydrogen fuel cells. Through a chemical reaction, the cells convert hydrogen directly to electricity, which powers the car, as in this Ford Focus advanced prototype.

ROB RILEY, Project Manager, Ford Motor Company: There are no fan belts.

SPENCER MICHELS: You don't need a fan belt?

ROB RILEY: No.

SPENCER MICHELS: Rob Riley is a project manager for Ford in Sacramento.

ROB RILEY: The tailpipe emissions are drips of clean water. And that's what makes this vehicle what they call a zero-emissions vehicle.

SPENCER MICHELS: Watching the various new technologies is Mary Nichols, head of the California Air Resources Board, whose aim has been to improve the California air polluted by gasoline-burning cars. But fuel cells, she says, aren't quite ready.

MARY NICHOLS, California Air Resources Board: Right now, the little fuel cells are just not that durable and so these cars don't have the range. The gold standard that we're talking about is a 400-mile car.

SPENCER MICHELS: There are just a few hydrogen fueling stations, making the cars impractical for now. And critics say generating hydrogen uses too much energy. Why not simply make electricity instead of making hydrogen? asks Tesla's Elon Musk.

ELON MUSK: The fuel cell is just a fundamentally inferior way of delivering electrical energy. It's incredibly inefficient to do that. You'll always win by taking that same electrical source and just directly charging a battery.

Carmakers encouraged to reach out

SPENCER MICHELS: Nichols' Air Resources Board has, for years, required that carmakers produce low-emission and no-emission vehicles, be they biofuel, hydrogen or electric. But recently, the board retreated from insisting on zero-emission vehicles, saying the car companies couldn't produce the number of clean cars the state required.

MARY NICHOLS: The purpose of this program is to mandate the big companies -- the General Motors, the Fords, the Toyotas -- to start selling us cars that run mostly on electricity or all-electric drive in the future. And to do that, you've got to reach the mass market, not just the early adopters or the committed environmentalists.

SPENCER MICHELS: Many of those environmentalists have criticized Nichols for giving not being tough enough. Ze'ev Drori, the CEO of Tesla, is also critical.

ZE'EV DRORI, CEO, Tesla Motors: I think the state must push, cajole and encourage the carmakers to get into cleaner and cleaner vehicles, zero-emission vehicles.

MARY NICHOLS: We're pushing them pretty hard, because, by 2020, we're actually going to need a vehicle fleet that's all electric drive train.

SPENCER MICHELS: The regulators and the carmakers themselves know the electric car industry is still in its infancy, but nearly everyone involved says it has turned a major corner. And the promises of the past are closer to fulfillment than anyone imagined just a few years ago.

RAY SUAREZ: Tomorrow, California officials will unveil a blueprint for fighting global warming. Among the recommendations: encouraging more electric and fuel-efficient vehicles, and requiring utilities to use more solar and wind power.

And on our Web site, you can find more from Spencer's interviews with General Motors CEO Rick Wagoner and others in his report. It's all at PBS.org.