Private Sector Electrifies the Car Market

The opening of the film documentary Who Killed the Electric Car?, about General Motor’s EV-1, has helped to reignite interest in electric cars — that plus $3.00 a gallon gasoline.

Liberals and environmentalists are on something of a witch hunt, thinking that some dastardly entity — the oil companies, GM, somebody — must have torpedoed the earlier electric car movement. Otherwise, millions of Americans would be happily driving them, saving money and the planet at the same time.


While it is true that car manufacturers did not do a lot to advertise their electric creations, that’s in part because they didn’t think Americans really wanted them.

Who really wanted them was the California Legislature, which passed legislation in 1990 requiring carmakers to sell a small percentage of what were called “zero emissions vehicles” (ZEV) in the state. GM rolled out its EV-1 in 1996.

The car companies can be forgiven for not equating California lawmaker demand with consumer demand. Especially since what consumers were pouring their bucks into at the time were big, gas-guzzling SUVs. Remember, the mid-90s was the era of the “soccer moms,” who wanted big vehicles to haul around everybody’s kids to their various activities.

Electric cars were smaller, sluggish and had a very limited rage. And they looked, well, let’s just say they were no fashion statement. Americans like styling and performance in their cars, and the electric cars just weren’t it.

But that may be changing. Innovative, private sector start-up companies are getting into the electric car act — much like they’re doing on space flight.

For example, USA Today reports that PayPal co-founder Elon Musk is bankrolling a new company called Tesla, which has designed a new two-seat roadster that looks something like the BMW Z4 and the Pontiac Solstice, only better. The company hopes to deliver the car next spring.

The car will be built by British sports car maker Lotus, has a range of 250 miles and will hit a top speed of 130 mph.

The car is very expensive — about $100,000. But early adopters always pay a high price; those prices usually fall as the technology improves and hits wider production.

The point is that there is little mystery why the first generation of electric cars failed: they were the result of government demand. The new generation is a result of private sector innovation striving to tap into consumer demand.

And that’s a “Formula 1” for success.