Carmakers Pull Plug on Electric Vehicles
By CHRIS DIXON
Published In The NY Times: March 28, 2004
FIVE to 10 years ago, when the future seemed to
belong to electric cars - and California clean-air rules forced
reluctant automakers to offer them - a small but enthusiastic group
of optimists and environmentalists signed on as pioneers. While a
few bought electrics outright, most signed leases that obliged them
to return the vehicles after a few years.
Regulators and auto manufacturers have since pinned their hopes
on newer technologies, like hybrid gasoline-electric vehicles and,
further in the future, hydrogen cars. Electric autos have become
orphans, abandoned in favor of more promising offspring.
Parental neglect has, in fact, turned into infanticide. General
Motors and Ford are taking back electric vehicles when the leases
expire - not to resell them, but in many cases to crush them. The
companies have refused to sell them to leaseholders, saying there
are not enough on the road to justify the maintenance costs, and
they want to avoid liability for any problems that might arise. They
see electric cars as an interesting but failed experiment that
taught valuable lessons for the future.
But some drivers, upset at losing their cheap-running,
zero-emission cars even as gasoline prices jump, are fighting
back.
One Ford lessee, William Korthof, has hired a Los Angeles civil
rights lawyer, Nora Quinn, to press his case. She says she may file
a class-action lawsuit against G.M. and Ford on behalf of
lessees.
"I am personally, morally offended by the idea that they would
destroy these functional vehicles that have such a positive
environmental impact," Ms. Quinn said.
Ray Levinson of San Francisco says he may also retain Ms. Quinn.
Not only does he drive a Ford Ranger EV pickup, he has compiled a
long, green résumé as an environmental programs manager for the
United States Postal Service on the West Coast. In 2000, he
organized an initiative that put 500 electric Ranger-based postal
trucks on Southern California streets; he later oversaw a huge
solar-power installation.
Although Mr. Levinson's lease ran out on Feb. 25, he has refused
to return his 2000-model truck. He said that before the lease
expired, he sought to buy the truck for the $7,000 residual value
indicated on his contract. "The next day," he said, "I got a call
back that said, nope, no option, turn it in."
Ford's response is similar to that of G.M., which has quietly
reclaimed most of its ground-breaking EV-1 electric cars, from some
800 lessees, since production ended in 2000. G.M. has crushed many
of the cars, undeterred by rallies and mock funerals organized by
the EV-1's devoted fans.
After $1 billion to develop the bullet-shaped electric speedster,
G.M. canceled the EV-1 after building about 1,000 cars. Dave
Barthmuss, a G.M. environmental manager, said that although many
lessees loved the EV-1, it didn't make enough money and cost too
much to keep on the road.
"But we've learned a heck of a lot from the EV-1 in terms of
technology transfer and what is necessary to sell advanced vehicles
like hybrids and fuel cells," he said.
Mr. Barthmuss added that although many cars were crushed - he
prefers "recycled" - vital parts were retained for the 100 or so
that remain in private hands until all leases end in August. Other
EV-1's will live on in museums or as research vehicles.
Ford, too, is quietly reclaiming its electric trucks. Most of the
1,500 Ranger EV's went to commercial fleets, but Ford also leased
about 200 to individuals and sold a few. Only 180 or so remain in
fleets; about a dozen are still in private hands.
Several Californians who leased Rangers, including Mr. Korthof of
Pomona, who installs solar panels, and Dave Raboy, a rancher in
Catheys Valley, near Yosemite, received letters from Ford offering
to let them buy their vehicles when the leases expired. But they
said that when they tried to exercise this option, they were turned
down.
In December, Mr. Korthof retained Ms. Quinn. She cited several
grounds for a possible lawsuit, asserting that contrary to Ford's
assertions, several lessees were not told they couldn't buy their
Rangers when the leases ended. She said Ranger and EV-1 drivers had
no other options if they wished to drive electric vehicles. And she
asserted that EV-1 lessees were being required to pay for wear and
tear on crushed cars.
Mr. Barthmass said that wear and tear charges were not unusual
for leased cars, and that not all EV-1's were being crushed.
While battery-powered vehicles made barely a ripple in the
marketplace, they inspired near-religious zeal among many of those
who bought or leased them. The impetus to sell electrics in
California came in 1990 with a state mandate that 2 percent of
automakers' sales had to be zero-emission vehicles, called ZEV's, by
1998. The mandate was to rise to 10 percent by 2003.
Automakers bitterly fought the requirement, arguing that it
unreasonably manipulated the marketplace and forced consumers to buy
vehicles for which they had shown relatively little appetite. In
2003, facing the prospect of prolonged litigation with G.M.,
regulators altered the ZEV mandate to include hybrids and hydrogen
vehicles.
Mr. Korthof said his Ranger was a perfect match for his
solar-panel business, since he can charge it using his own panels.
Mr. Raboy, whose lease expires in April, also charges his vehicle
with panels on his ranch. "We're just trying to do our part," he
said, "Not use gas, protect the environment and help with foreign
oil in a small way."
Mr. Korthof said that when his lease ended in December, he
refused to return the truck but continued to make the $480 monthly
lease payments. After what he described as several angry calls from
the company, his lawyer, Ms. Quinn, contacted Ford. She said Ford
would not agree to let her client keep the truck even if he signed a
waiver agreeing to assume responsibility for its upkeep. But Ford
has since left Mr. Korthof alone and is accepting his payments.
In contrast to G.M. and Ford, Toyota has allowed lessees to buy
its remaining RAV4 EV's, and the company will continue to service
them. "We offered these up for purchase, and when we did that we
knew that we had a commitment from that point forward," Nancy
Hubbell, a company spokeswoman, said.
Honda, which produced about 300 EV-Plus cars, allowed lessees to
keep the cars so long as they do not require new batteries,
unavailable parts or expensive service.
Ms. Quinn said she saw no reason Ford or G.M. could not sell the
cars with titles that would indicate that the vehicles were no
longer be supported by the manufacturers.
But this is not how Ford wants to do business, said Philip
Chizek, the company's marketing manager for sustainable mobility,
particuarly with a technology that he said was never intended to be
on the road for more than three to five years.
"Once the vehicle gets in the hands of the owner, they can make
modifications that wouldn't be proper," he said. "They may not be up
to Ford's standards in terms of preventative maintenance.
"Once you hand off the keys to someone with that type of
unlimited liability, it puts Ford in a bad position. And that's not
the type of customer relationship that we want."
Mr. Chizek said that when the trucks were leased, "we told them
upfront that this was a limited lease and that the probability of
them extending the lease is very slim because the technology would
be outdated."
Less than two years after Mr. Levinson recommended that Ford
receive the electric postal truck contract, the company pulled the
vehicles out of service, saying batteries were not available, and
substituted gasoline-powered Windstar vans. Had he known that his
hoped-for 12-year fleet would be gone so soon, another bidder would
probably have won the contract.
Today, he said, he just wants Ford to honor a more personal
environmental commitment. "It costs me $1.25 to charge the truck to
get a 50-mile range," he said. "It's just criminal that in this time
of war for oil and these ridiculous prices for gasoline that I would
be forced to give up something that's helping clean the air,
eliminate our dependence on foreign oil and is just such a great
vehicle to drive."
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