Bottled Lightning
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Exxon Enterprises became a case study in how corporate diversification can go wrong. As Hollister B. Sykes, formerly of Exxon Enterprises, wrote in the Harvard Business Review in May 1986, “The high proportion of R&D ventures in our portfolio greatly increased our risk of failure and stretched out the time from start-up to projected sales. Because most corporations go through cycles in their base businesses, unprofitable operations not in the mainstream are especially vulnerable. Exxon was no exception. The steep slump in the consumption of oil products and natural gas from 1979 to 1982 caused concern. Along with the cutback in Exxon’s base business operations, we either sold or liquidated most of our smaller ventures.”
“We’re not interested”: Kirkland and Kuhn, “Exxon Rededicates Itself to Oil.”
“Without a market”: “The Slow, Sure Advance Toward Better Batteries,” Chemical Week, November 28, 1984.
3: The Wireless Revolution
Goodenough is now a professor: Many of Goodenough’s biographical details come from his book Witness to Grace.
Douglas H. Ring and William Roe Young: Private Line, “Cellular Telephone Basics,” January 1, 2006, www.privateline.com/mt_cellbasics/ii_cellular_history/.
On April 3, 1973: Stephanie N. Mehta, “Cellular Evolution,” Fortune, August 23, 2004, p. 80.
Process of elimination: Bernadette Bensaude-Vincent and Arne Hessenbruch, “Interview of John B. Goodenough,” March 2001, http://authors.library.caltech.edu/5456/1/hrst.mit.edu/hrs/materials/public/Goodenough/Goodenough_interview.htm.
before it started to crumble: During discharge, lithium ions swim from the anode to the cathode, where they embed themselves into the crystalline lattice of the cathode. When the battery is being charged, those lithium ions flee the cathode and head back to the anode. The whole project rested on whether the microscopic Jenga puzzle that is a crystalline lattice could stay erect even when half of the lithium ions docked within it were sucked away.
An excellent 4 volts: K. Mizushima, et al., “LixCoO2 (0
But that was just in the United States: This paragraph draws on Tom Farley’s article “Mobile Telephone History,” Telektronikk 3/4 (2005): 22–34.
From a car outside Soldier Field: “Cellular Mobile Phone Debut,” New York Times, October 14, 1983.
approximately $3,000 for an Ameritech car phone: Ibid.
first handheld mobile phone: Ted Oehmke, “Cell Phones Ruin the Opera? Meet the Culprit,” New York Times, January 6, 2000.
“an adjunct of the microelectronics revolution”: Jonathan Greenberg, “The Battery Boom,” Forbes, November 8, 1982.
“Mercury, a toxic metal”: Andrew Pollack, “Battery Pollution Worries Japanese,” New York Times, June 25, 1984.
“swallowing issue”: In the summer of 2010, the “swallowing issue” reemerged, and the culprit was button-cell primary lithium batteries. See Tara Parker-Pope, “For Very Young, Peril Lurks in Lithium Cell Batteries,” New York Times, May 31, 2010.
“They kind of got left in the dust”: Some in the industry suspected that simple greed guided the American battery companies’ lack of interest in rechargeables. After all, primary battery manufacturers made their living selling products you use and throw away. But there’s more to it than that. A 2005 study commissioned by a program within the National Institute of Standards and Technology identifies an array of reasons lithium-ion manufacture didn’t take hold in the United States. Among them: The Japanese companies who led the rise of the advanced rechargeable battery weren’t just battery manufacturers—they were electronics manufacturers, for whom having an in-house battery manufacturer that could engineer specific power sources for particular devices, leading to overall better and more profitable gadgets, made perfect sense. And because the gadgets that were driving demand for advanced batteries were being designed in Japan, by companies that had their own battery divisions, it would have been a challenge for the American manufacturers to get into this market even if they had dearly wanted to. Add to all this the cultural differences between American and Japanese business—most significant, the focus on short-term gains versus long-term success—and it’s not surprising that Japan ran away with the lithium-ion battery market. Ralph J. Brodd, “Factors Affecting U.S. Production Decisions: Why Are There No Volume Lithium-Ion Battery Manufacturers in the United States?” June 2005, www.atp.nist.gov/eao/wp05-01/contents.htm.
According to Sony’s official history: www.sony.net/SonyInfo/CorporateInfo/History/SonyHistory/index.html.
a hostile takeover bid: States News Service, April 16, 1986.
In February 1990: “Sony Subsidiary to Begin Shipping Lithium Ion Battery,” Japan Economic Newswire, February 14, 1990.
The founder was Rudi Haering: Interviews with Jeff Dahn; Ann Shortell Vansun, “Recharging Moli’s Battery,” Vancouver Sun, September 26, 1991.
By the spring of 1986, Moli: David Climenhaga, “Firm Finds Battery Has Drawing Power,” Globe and Mail, March 13, 1986.
held a public stock offering: “Moli Starts Producing at Vancouver Plant,” Battery and EV Technology 19 (1994).
in 1988, Moli’s first battery: “Moli Energy Introduces New High-Energy, High-Voltage Rechargeable,” PR Newswire, December 15, 1988.
an NTT phone equipped with a Moli battery: Ann Shortell Vansun, “The Question of Quality,” Vancouver Sun, October 1, 1991.
Moli laid off 56 of its 192 employees: “Moli Energy Lays off 56,” Financial Post (Toronto), October 2, 1989.
Mitsui stepped in: Anne Fletcher, “Mitsui & Co. to Take Control of Troubled Moli,” Financial Post (Toronto), March 12, 1990.
Motorola sold $180 million worth: The figures in this paragraph come from “The Role of NSF’s Support of Engineering in Enabling Technological Innovation; Phase II,” Chapter 4, SRI International, May 1998, www.sri.com/policy/csted/reports/scrdt/techinZ/chp4.html.
“The competition is becoming fierce”: David Thurber, “Dull but Durable, Rechargeable Batteries Enjoy Surging Demand,” Associated Press, March 10, 1992.
“While electronics manufacturers”: “The Battery Market; Recharged,” Economist, May 2, 1992.
Beginning in 1992, Sony offered: “Sony’s ‘Handycam Station,’” Consumer Electronics, September 7, 1992.
In 1993, there were thirteen million cell phones: Peter Haynes, “The End of the Line,” Economist, October 23, 1993.
by some 25 percent a year: Ibid.
electromagnetic fields came in at number one: David Kirkpatrick, “Do Cellular Phones Cause Cancer?” Fortune, March 8, 1993.
a guest on Larry King Live: “The Wireless Wonder,” Forbes, April 26, 1993.
In 1994, Electronic Engineering Times: Martin G. Rosansky and Ian D. Irving, “Lithium-Ion Offers Better Choices,” Electronic Engineering Times, May 23, 1994.
In Japan, manufacturers were scrambling: Hisayuki Mitsusada, “Lithium Ion Set to Recharge Firm’s Sales,” Nikkei Weekly, August 21, 1995.
total Japanese dominance: Even as its competitors got into the lithium-ion business, Sony was so far ahead that on November 4, 1995, when a fire in Sony-Energytec’s Koriyama factory caused a train wreck in the global battery supply chain, none of Sony’s competitors had anywhere near the capacity to take up the slack. Sony had been making three million cells a month in Koriyama; its Tochigi factory still wasn’t running when the fire erupted. As a Japanese industry analyst noted at the time, global demand for lithium ion that year would be forty million, and even with A&T, Matsushita, and Sanyo running full bore, the Sony fire meant that the market would probably be ten million cells short. Mark LaPedus, “Fire Chokes Battery Supply—Sony Halts Output at Lithium-Ion Plant,” Electronic Buyers’ News, November 13, 1995.
Weighing only 3.1 ounces: Scott Hume, “Motorola’s Big Push for Smallest Phone,” Adweek, January 8, 1996.
“will WEAR rather than carry it”: “Motorola Unveils European StarTAC Cellular Telephone,” Motorola press release, March 28, 1996.
“A big cellular phone”: P
aul Hochman, “Mine Is Smaller Than Yours,” Forbes, November 18, 1996, p. 136.
“twenty indispensable luxuries”: Esther Wachs Book, “’Tis the Season to Covet,” Fortune, December 23, 1996, p. 258.
a choice gangsta fashion item: Dana Kennedy, “Deadly Business,” Entertainment Weekly, December 6, 1996, p. 34.
sixth greatest gadget: Dan Tynan, “The 50 Greatest Gadgets of the Past 50 Years,” PCWorld, December 24, 2005.
more than 120 million: Richard Ernsberger, Jr., and Judith Warner, “War for the World,” Newsweek, February 10, 1997.
two each second: Manuel Del Castillo and Henry Valenzuela, “The Role of Microwave Technologies in the Wireless Revolution,” Microwave Journal, September 1, 1998.
200 to 300 percent per year: “Battery Manufacturers Charge Ahead, Despite Impending Glut,” Nikkei Weekly, July 28, 1997.
Internet-capable phone called i-mode: “The World in Your Pocket,” Economist, October 9, 1999.
The merging of the cell phone: “The Conquest of Location,” ibid.
A piece in Time: Adam Cohen, “Wireless Summer,” Time, May 29, 2000.
“Perhaps the more worrisome outgrowth”: Stephen Baker, Neil Gross, Irene M. Kunii, and Roger O. Crockett, “The Wireless Internet,” BusinessWeek, May 22, 2000.
“foot-soldiers of the digital revolution”: “Hooked on Lithium,” Economist, June 22, 2002.
4: Reviving the Electric Car
sold NuvoMedia for $187 million: “Valley Techs Tackle Electric Car,” Australian, July 11, 2006.
They soon arrived at the design for their battery pack: When I told Eberhard that powering a car with 6,831 laptop cells wired together sounded incredibly makeshift, he replied, “When you say it like that, that’s true. That’s like saying a car is a whole bunch of sheet metal and bolts all stuck together.”
Even the editorial board: “Go Speed Racer!” New York Times, July 23, 2006.
one of the best inventions of 2006: “Best Inventions 2006: Batteries Included,” Time, November 13, 2006.
some $6 billion a year on benefits: “GM Will Reduce Hourly Workers in U.S. By 25,000,” Danny Hakim, New York Times, June 8, 2005.
the company lost $1.1 billion: Sharon Silke Carty and James R. Healey, “GM Takes $1.1B Hit in First Quarter,” USA Today, April 20, 2005.
earning a place: Halberstam, The Reckoning, pp. 741–42.
a long time coming: For a deep account of GM’s downfall, see Paul Ingrassia’s Crash Course.
tellingly called iCar: Holstein, Why GM Matters, p. 131.
possible career killers: A GM engineer named Kenneth Baker confronted a similar situation in 1990 when he was asked to lead the EV1 program. He had led the doomed Electrovette program in the late 1970s, and over the years he came to feel that its failure had stalled his career. When he was recruited to do the EV1, he was afraid that it could be his undoing. See Michael Shnayerson’s excellent The Car That Could for a detailed account of the EV1 saga.
The language Wagoner used: A GM executive would argue that the hydrogen fuel-cell research that the company conducted in the years after the demise of the EV1 shows that they never did turn away from electrically driven vehicles.
ten times the attention: Tom Walsh, “GM’s Message to the World—Don’t Count Us Out,” Detroit Free Press, January 10, 2007.
“not a public relations ploy”: Lindsay Brooke, “All the Technology Needed for 100 M.P.G. (Batteries Not Included),” New York Times, January 7, 2007.
5: The Blank Spot at the Heart of the Car
The idea that electricity could be used as a locomotive force: This section on the early history of the electric car owes a considerable debt to Schiffer’s thorough and eminently readable Taking Charge. For a more academic take on the same period, see Kirsch’s The Electric Vehicle and the Burden of History, which also proved valuable in assembling the historical passages of this book.
“Men fell on their knees”: Schiffer, Taking Charge, p. 51.
“The day does not seem so very far distant”: Ibid., p. 35.
“a hospital full of sick dogs”: Quoted ibid., p. 64.
“That any firms lasted past the war”: Ibid., p. 159.
Not until air pollution became an issue: The document that establishes this link most clearly is the report of the Department of Commerce’s 1967 panel on the problem: The Automobile and Air Pollution: A Program for Progress. Details about the experimental electric city cars of that same era (the GM XP512E, the AMC Amitron, and the like) are drawn from Shacket, The Complete Book of Electric Vehicles.
The Impact concept car had grown out of the Sunraycer: The definitive source on the CARB zero-emissions mandate and the saga of the EV1, which I rely on in my capsule history of this period, is Shnayerson, The Car That Could.
“General Motors is preparing”: Matthew L. Wald, “Expecting a Fizzle, G.M. Puts Electric Car to Test,” New York Times, January 28, 1994.
lobbying the state of California: The story of the electric-vehicle wars of the 1990s is sprawling, complex, fascinating, and told very well in a number of books. Shnayerson provides the view from inside General Motors, which in those years had passionate engineers making an urgent good-faith effort to develop the EV1 while at the same time executives and lobbyists were fighting California’s zero-emission mandate and effectively working against the success of the electric car. See Doyle’s Taken for a Ride for a full account of the conspiracy charges of the era, in which the Sierra Club Legal Defense Fund sued the Big Three, accusing them of colluding to “hinder the introduction of electric vehicles” (pp. 305–23). The same chapter includes evidence that “the Big Three used USABC [United States Advanced Battery Consortium] to limit or suppress battery technology development.” Boschert’s Plug-in Hybrids explains the theory that Chevron may have intentionally limited automakers’ access to nickel-metal-hydride batteries, which when installed in the final generation of EV1 extended the driving range to 160 miles. On the subject of nickel-metal-hydride batteries, see Shnayerson for a portrait of Stan Ovshinsky, the legendary inventor behind the nickel-metal-hydride battery, which many argue should have made the EV1 a truly attractive vehicle. Who Killed the Electric Car? is, of course, an essential source for understanding the story of the EV1.
“a free RAV4-EV plus a check”: James R. Healey, “California May Soften Electric Car Mandate,” USA Today, June 2, 2000.
the California Electric Transportation Coalition commissioned a study: “The Current and Future Market for Electric Vehicles,” Green Car Institute, 2000.
Starting in 2002, Toyota: “Auto Emission Rules in California are Forcing Changes,” Danny Hakim, New York Times, July 22, 2002.
Bereisa estimates that GM lost $1 billion: The claim that GM lost $1 billion on the EV1 is contentious. “At the time they stopped production entirely, the total cost was being reported as some $700 million,” Chelsea Sexton wrote me in an e-mail. “How do you spend another $300 million on a car program that’s no longer in production?” Sexton argues that creative accounting is at work here. “Whatever the number is, all sorts of other things would be assigned to it—the Chevy S-10 electric program, which ran parallel to EV1, all the lobbying costs to fight the mandate, and the full costs of the various technologies that are now being deployed in many other programs today. It’s a common industry practice to bury all that in one program that’s deemed a loss, so the other programs aren’t burdened with those development costs.” From GM’s perspective, negative $1 billion is, in this case, an attractive number. “It makes a tidy little story about why the program was cancelled,” Sexton wrote.
laptops powered by Sony lithium-ion batteries began catching fire: The details of the first incidents with Sony batteries and the Sony recall are drawn from Damon Darlin, “Dell Will Recall Batteries in PC’s,” New York Times, August 15, 2006.