Carmakers Pull Plug On Electric Vehicles

By Chris Dixon
The New York 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.''