GM lost a lot on EV1, but project pays dividends

The profit and loss entries in General Motors' corporate ledger for the EV1 don't lie: GM lost money — a lot of it — on every one of the 1,117 EV1s leased to customers.

But those numbers don't tell the whole EV1 story.

There's no entry in the books that places a monetary value on what GM learned designing, engineering, testing and building the EV1 or how the experience paid — still pays — dividends. But if you speak with the engineers who worked on the EV1 and experts who know about product development, they'll tell you it was a gold mine for GM.

Ken Baker, now retired in Arizona, was the program manager. He told me that throughout the development of the EV1, the automaker focused on maximizing energy efficiency on every single part of the car, a strategy GM had never before adopted in the creation of a production car. No component was taken off GM's parts shelf and installed without being lightweighted, downsized or made more energy-efficient. That even included the EV1's radio.

These same strategies are being employed today on GM's upcoming armada of electric vehicles — not only by engineers wrenching in the historical shadow of the EV1 team, but also by some of those EV1 team members still at GM. Where in the corporate ledger is the entry for the institutional experience they bring that saves the company time and money?

After an advanced high-tech program like the EV1 ends at an automaker, it's not unusual for the team to disband and go to other projects and even other companies. The EV1 crew mostly remained intact and went on to develop with Allison Transmission the diesel-electric hybrid system used in city buses. More than 9,000 of those buses have been sold globally, saving billions of gallons of diesel fuel and keeping tons of pollution out of the air. But you won't find any notation in GM's corporate books for that.

Other projects the EV1 team worked on included the Chevrolet S-10 electric pickup, which used the basic EV1 powertrain and electronics and was sold in 1997 and 1998, and, a decade later, the two-mode hybrid powertrain used in GM's big pickups and SUVs. It was a complex design that featured two 80-hp electric motors coupled to three planetary gear sets installed in a heavy-duty Allison transmission.

The result: The 2008 Chevrolet Tahoe Hybrid, a huge SUV, equipped with the two-mode powertrain was EPA rated at 21 mpg city and 22 mpg highway. Compare that with the 12 city and 18 highway for the gas-powered 2008 Ford Expedition, the Tahoe's chief competitor. Once again, there's no real way to delineate and calculate how GM's learnings on the EV1 helped with the creation of the two-mode hybrid.

"You have to learn to crawl before you can walk and walk before you can run. GM learned a lot from the EV1," said Don Sherman, former Car and Driver magazine technical editor. "The EV1 helped [the Chevrolet] Volt and Bolt. It helped develop people who have become instrumental in the company, and so that risk and cost was a wise investment."

Steve Tarnowsky, a veteran of the EV1 program who is now GM's chief engineer for EV propulsion, says the strategy engineers developed to manage the iterations of software in the EV1 is now used in the development of every GM vehicle, regardless of powertrain.

"The whole process ... where we would keep track of the individual controller software and coordinate the release of that software with the other controllers to make sure we deal with the interaction of the controllers ... the process around that was started on the EV1, and it is now prevalent at General Motors on every single vehicle we do, all the software releases," Tarnowsky said. How do you put a dollar figure on that?

Engineers at other automakers and at suppliers don't view the EV1 as a failure, says Lindsay Brooke, an engineer by training who is the editor of SAE International's magazine. "Engineers have high respect for the EV1," Brooke said.

"There were a lot of papers written about the car. This was really GM using all its strengths to create the most advanced vehicle of its time," said Brooke. "Its real benefit was laying the groundwork for where we are today in terms of the engineering team, in terms of the intellectual property, in terms of capability. Engineering builds on what was done yesterday. GM got into hybrids and EVs based on the EV1. The EV1 built GM's book of knowledge and its engineering bench."

Baker, who considers the EV1 the greatest accomplishment in his career, knows the full story of the EV1 can never be captured in just a cold accounting of the dollars spent to bring the car to market.

Said Baker: "It made a heck of an impact on the brand of General Motors, on the culture of General Motors, on the technical competence of General Motors and the whole attitude towards excellence."