Foreign carmakers
know there's money to be made from clean cars,
and the Big Three don't want to eat their dust

to get from the research labs to the showrooms, the clean car must surmount huge political and financial hurdles. Many U.S. carmakers lobby against clean-air reforms from one office while pushing alternative vehicles from another. In California, this tension has played out dramatically over the fate of the battery-powered electric car.

It's not surprising that California was the first state to get tough on auto emissions. Auto exhaust accounts for 90 percent of the state's carbon monoxide, 77 percent of its nitrous oxides, and 55 percent of its reactive organic gases. On some days, ozone levels in Southern California can be three times the federal limit. In recent years, California's air has gotten cleaner, a result of stringent state regulations that prompted carmakers to build special pollution-controlled "California editions" of their cars.

At a cost of only about $300 each for additional equipment, California's cars now have the cleanest internal-combustion engines in the world. The state has also become the nation's incubator for the alternative-fuel automobile, with CALSTART, a state-funded nonprofit consortium, helping electric-vehicle businesses take root. Southern California Edison operates one of the nation's biggest electric-car fleets, and electric buses ferry travelers around Los Angeles International Airport. To fully understand the city's need for electric vehicles, you have only to visit on a bad-air day, when the natural glories of the San Gabriel Mountains are lost in an ominous brown mist.

In 1990, the California Air Resources Board threw down a gauntlet to an astonished auto industry. It declared that the major companies would have to start producing emission-free vehicles (at the time only battery-powered electric cars fit the definition) or face stiff fines. The state mandates specified that 2 percent of the automakers' fleets would have to be zero-emission vehicles by 1998, and 10 percent by 2003.

The auto industry reacted as if rear-ended by a semi. The mandates intruded on its cherished belief that the market, not regulations, should decide what kind of cars were made. And it believed, at least then, that people wouldn't buy electric vehicles in any form. To the industry's great frustration, the Air Board waved away its warnings that the technology wasn't ready. After several years of quiet pressure, automakers, aided by their allies in the oil business, decided on a public fight.

The cash-rich auto and oil companies and their front groups made a formidable lobbying team, drumming up fears of higher car prices and taxes. A Western States Petroleum Association "fact sheet" distributed in 1995 estimated that electric-car mandates would add $2,000 to the cost of every conventional car on California's roads, thus reducing new-car sales in the state "by 10 percent or more." A petroleum-association-funded petition from the same period upped the ante, stating, "We oppose the assessment of nearly $18 billion in hidden taxes and other costs to promote electric, natural gas, and other alternative-fueled vehicles."

In the six months ending in November 1995, the auto companies spent $500,000 on their campaign to kill the electric vehicle, dwarfing the budget of the opposition California Electric Transportation Coalition. In their testimony at state hearings, auto executives reinforced the lobbying campaign with strongly worded doubts about electric-vehicle performance. Ford's John Wallace, who would later head his company's electric Ranger-truck program, was pessimistic about electric vehicles in public. "As anybody who is familiar with today's battery technology will tell you, EVs are not ready for prime time," he said. GM's original choice of low-range lead-acid batteries neatly ensured that outcome.

Melanie Savage of CALSTART describes the anti-EV effort as "a very extensive multimillion-dollar campaign against the mandate that effectively undermined faith in the technology. For every dime we spent, they spent a dollar." The industries were engaged in questionable tactics, according to Savage. "They bused in old people from Orange County to public hearings, gave them box lunches and told them that their tax bills would go through the roof so that a small number of people could have electric cars."

State regulators got the message. While there are real problems developing a suitable EV battery, officials caved in after it became apparent that the anti-mandate lobbying was having a strong effect on public opinion. Polls that had shown nothing but good will toward electric vehicles now revealed an undercurrent of worry-about subsidies, about battery technology, about range. In 1996 the California Air Resources Board shelved its requirement that 2 percent of vehicles sold in the state be zero-emission vehicles by 1998, but kept the "10 percent in 2003" mandate-which the auto industry is already gunning for.

The petroleum lobby's motives are transparent: the oil industry stands to lose huge amounts of money if electric vehicles succeed and Americans stop consuming 121 billion gallons of gasoline a year. But industry groups like the now defunct American Automobile Manufacturers Association (whose budget was $34 million in 1995) represented a constituency with divided loyalties. General Motors was contributing to a fight against California's zero-emission mandate that directly affected the marketability of a product it spent $300 million developing, the EV1. That vehicle indeed met a skeptical public when it was first offered, for lease only, in California and Arizona in 1996.

The California mandates were hardly the first time the auto industry stonewalled government regulations and ignored pollution warnings. Big Three executives and their trade associations are on record as saying that acid rain is not a serious environmental problem, that emission standards are impossible to meet, that fuel-economy standards should be rolled back, that the Clean Air Act of 1970 is too stringent, that air bags are unnecessary, that the technology "does not exist" to produce electric vehicles, and many other things that have proven ridiculous or untrue. Just last fall, automakers beat back a bill in Congress that would have given tax credits to car buyers who purchased high-efficiency vehicles. There is a long and inglorious history to carmaker combativeness.

Industry prefers voluntary programs such as the Partnership for a New Generation of Vehicles, which the Clinton administration initiated with much fanfare in 1993 as a government/industry collaboration that would solve the smog problem. Under the partnership, seven government agencies and the United States Council for Automotive Research, a consortium with representatives from GM, Ford, and DaimlerChrysler, would have ten years to produce low-emission, 80-mile-per-gallon family cars. These designs will first appear as working models in 2000, then as "production-ready" prototypes by 2004. But the program isn't binding, and no automaker has committed to mass-producing them, so the prototypes may do little more than revolve on show stands.

In effect, the partnership is a shield for politicians and industry participants. The administration gets credit for a clean-air program aimed at cutting global warming and dependence on foreign oil, all for appropriations of about $200 million a year, and the automakers can derail criticism about their absurdly poor performance on fuel economy. Dan Becker, director of the Sierra Club's global warming and energy program, says that voluntary initiatives are no substitute for government mandates. The partnership, he says, is "a scam to keep regulation at bay."

When it comes to meeting the voluntary goals of the Kyoto treaty, the auto industry is in not willing to do its part. A start would be a tightening of corporate average fuel economy (CAFE) standards, the federal law for cars and light trucks. The average 12-mile-per-gallon gas guzzler emits more than four times as much carbon dioxide as a 50-mile-per-gallon compact. The auto industry has tenaciously fought against any attempt to tighten fuel-economy standards. (Until California regulators cracked down in 1998, and the feds followed this year, the industry also succeeded in protecting its lucrative sport utility vehicles from tough emissions regulations.) The result is that actual fuel economy has declined since 1988, as the Big Three have switched from producing fuel-efficient cars to more profitable (and gas-wasting) light trucks and sport utilities.

In public forums, auto executives have either derided the science behind global warming or simply claimed there wasn't enough information to make a judgment. But that's beginning to change, as Japanese and European automakers take the lead in confronting environmental problems with alternative technologies.

Toyota was the first auto company to announce, in the spring of 1998, that it was joining with other heavyweights such as British Petroleum, Enron, United Technologies, and Lockheed Martin in an alliance to address global warming. Toyota, which has aggressively sought an environmental image, hopes to shield itself against the public and political reaction to global warming.

And, strange as it may seem in a period of exceptionally cheap gasoline, the end of the fossil fuel era is a real possibility. As Scientific American observed in a recent special report called "The End of Cheap Oil," demand could soon start to exceed supply, a problem that could be exacerbated by the concentration of most remaining large reserves in a few Middle Eastern countries. (The recent decision by OPEC countries to limit output highlights the problem.) What's more, some experts say, the size of many countries' oil reserves has been systematically exaggerated for political and economic reasons.

Electric vehicles won't completely solve our fossil-fuel problems. Early fuel-cell cars may well run on these fuels. Hybrid cars will burn them, though they'll do it efficiently. And as critics point out, even "emission-free" battery-powered vehicles rely on electricity from utility-owned power plants that often burn oil or coal. But, according to the Union of Concerned Scientists, it would take 100 electric vehicles getting their power from a fossil-fuel-burning grid in California to equal the volatile-organic-compound production of the typical new gas car, 5 to equal its nitrogen oxide production, and 100 to match its carbon monoxide output.

What worries American automakers is the thought that after a decade of U.S.-auto industry resurgence, Asian and European automakers may once again deliver fuel- efficient, environmentally friendly automobiles to a public that won't be able to get what it wants from Detroit. The prospect of that happening, as it did in the fuel crisis of the 1970s, keeps U.S. automakers interested in alternative fuels.

In Japan, all the major manufacturers are aided by a supportive central government that pours money into solar power and basic hydrogen research. In Germany, DaimlerChrysler has taken the lead in fuel cells. The French seem to be doing the most serious thinking about how best to use electric vehicles in the urban environment, and EV rentals are more widely available there than anywhere in the world.

In response, the Big Three have formed alliances with their global competition. Replacing the strident American Automobile Manufacturers Association is a new and less polemical international body called the Alliance of Automobile Manufacturers, representing nine companies, including Detroit's Big Three. Even if Detroit's heart is still with internal combustion, practical and competitive pressures are forcing it to take alternatives seriously. The industry is beginning to think it can build not just a cleaner car, but a better one.

With gasoline costing less than bottled water, fuel-efficient, hydrogen-powered cars may seem like the answer to a question few drivers are asking. But the auto industry is, for once, looking ahead, and seeing not only the end of the oil era but also a global-warming crisis that won't be solved without changing the way the world drives. And it's doing so with the encouragement of environmentalists. "We need to change America's love affair with the car, but first we need to change the car," says the Sierra Club's Becker. "It's hard to influence the thinking of two hundred and forty million Americans, but there are only twelve companies that make the bulk of the world's cars. It's much easier to turn them around." Becker sees "dramatic changes for the better" on the horizon, offering as an example the hydrogen fuel cell. "It emits water," he says. "We like water." —Jim Motavalli