In the third installment of our interview with the author of Zoom: The Global Race to Fuel the Car of the Future, Vijay Vaitheeswaran explains how the White House and Detroit inspired Toyota to create the Prius and dominate the market for efficient vehicles.
Listen to the podcast of this interview via iTunes, or listen/right-click to download.
(Click here to listen to part 1, and here to listen to part 2.)TreeHugger: The American auto industry is clearly ill. Let's be honest; the big three (one of them has already fallen to European ownership) are getting creamed by the Asian automakers. But you argue that this could be a boon for the environment in the end. How so?
Vijay: I think the fact that the American car companies have been beaten to the punch by Toyota, Honda, and some of the other companies on hybrid electric cars has really proved to be a wake-up call for Detroit.
In the ‘90s, Detroit had the chance to produce clean cars. Al Gore actually had a program that was called the "Partnership for a New Generation of Vehicles" and these so-called 'supercars' would get almost 90 miles to the gallon of fuel economy. The American government subsidized the Detroit companies to come up with something that would be like the hybrid cars.
Detroit didn't want to do it. They said, "we don't like it but we'll join hands with you, Al Gore, as long as you don't force us to make a single car." And through the ‘90s, they did this research program where they insisted the Japanese companies were not allowed to be part of the program or part of the partnership.
At the end of it, they spent a billion and a half dollars in tax money; they didn't produce a single car. Meanwhile, the Japanese got so scared, they said, "oh my God. Al Gore and Detroit are in some government program with taxpayer money, they're going to come up with some kind of hybrid car." They got so scared and without a penny of subsidy, Toyota took its best engineers, locked them up at a room and said: "Whatever resources you need, come up with a car that gets 50% better gas mileage than today and do it pronto."
And in the end when you have top management attention, resources, and access to technology, there is always a way. And that's what happened: they came up with hybrid technology. And today, the Prius is a top ten car in America. Toyota sold over a million hybrids and this is the essential enabling technology for all of the cars that are to come in the future.
That is an important story for Detroit because they realized that they made a mistake in going for the cheap, easy profits that came from SUVs in the ’90. They really gave up their long-term future. Now, they're playing catch-up and they're getting quite aggressively into making cars—not only hybrids—but to go ahead with what are called 'plug-in hybrids.’
GM is very committed now to making the Chevy Volt, an inexpensive electric hybrid car that they claim will be out in less than five years. Let's see what happens. I'm delighted to see GM and some of the other U.S. car companies get very serious about alternative vehicles. I'd like to see the actions match the words.
TreeHugger: Do you see the potential for that sort of technology to save Detroit? Could that be what rescues them from this history of relying on cheap profits from SUVs?
Vijay: I think that the future for Detroit lies in this divorce between the oil and car industries, because oil is a problematic partner. Toyota has already concluded that there are going to be disruptive changes in the future, fundamentally having to do with the scarcity, cost, and the volatility of petroleum, as well as global warming problems and the regulation on tailpipe emissions. And so that’s the reason why they have invested a lot of money in the future.
If the GM keeps its word (Ford and Chrysler are a little less enthusiastic about this), if they really do see their future as automotive companies rather than as gasoline-burrning engine companies, then I think there's every reason to think we'll have the renaissance in Detroit. Otherwise, they risk going the way of the buggy 100 years ago.
TreeHugger: You write about how the same forces that are linking the world through the Internet, the Silicon Valley Revolution, are injecting these disruptive technologies into the auto market place—companies like Tesla Motors and others. Who are these players, these startups? And what's this going to mean for this global race?
Vijay: There are two kinds of outsiders or innovators that are coming up. You're seeing Silicon Valley companies, the best example is a company called Tesla Motors, the first new American car company in many decades. The guy who sold PayPal to eBay for a billion and a half dollars, one of the Silicon Valley luminaries, has created this company. He poached a lot of top engineers from Lotus, one of the great engineering design companies in the car world, and come up with a very sexy sports car that's 100% electric.
It uses advanced lithium=ion batteries so that you can get 250 miles of range on a single charge. It uses a lightweight carbon composite body, which is something that the great guru Amory Lovins has been supporting for many years. Cars need to get lighter, he says. There's no reason to carry around thousands of pounds of steel to move a few hundred pounds of human beings. It doesn't make any sense. And so this car is the true technology breakthrough that will be cutting into the marketplace next year.
We're seeing similar upstarts coming up in China; that's a real market to watch. Chery, which is a leading Chinese brand, as well as several other companies, are part of a cluster emerging outside Shanghai that I think could be the Detroit of the 21st century.
They may have some competition because in India where cars have become much more electrified. We all know that the software clusters in Bangalore and other parts of India are among the world's leading sectors. There is an opportunity there because most Indians don't have cars yet: they're about to buy cars for the first time in the next 10 to 20 years.
And what Indians want out of cars can be very different from what Americans either want or are forced to take. The reason is, these developing countries don't have legacy assets. Most of the gasoline stations or highways or cars that are going to be on the road in China, in India, in South Africa, in Brazil in 2020 (never mind 2050), most of them haven't even been built yet. Whereas if you look at a country like America which is a very mature economy, we're not going to build a whole lot of new highways in the next 10 to 20 years.
Here, the gasoline infrastructure is built out. This is true for all the rich countries of Europe and Japan. Whereas the developing giants, they're in the phase of rapid roll-out of energy infrastructure. Developing nations could take a very different path. If there were to be public policies as well as market innovations in places like India and China (Brazil has already done this with ethanol) you could see them embracing a clean alternative to gasoline.
Whether it be electric cars (or hydrogen in the case of China, ethanol in the case of Brazil) you could have a very different car industry thanks to those disruptive innovators who are coming up with the goods in a way that Detroit hasn't been doing in the last 10 years.