She continues her work as the Founder of the Lightning Rod Foundation, and has led the creation of the Automotive X PRIZE, and is a co-founder of Plug In America, the largest consumer-oriented electric drive advocacy organization. Additionally, Chelsea is a Senior Advisor to VantagePoint Venture Partners' CleanTec practice, and is a Consulting Producer on Chris Paine's next film, "Revenge of the Electric Car".
In the wake of GM's IPO, Chelsea shares her insight on the EV1, the Chevy Volt, the Tesla, and the US and world electric auto industries.
Todd: Talk a little about the story about how you got involved with the EV1.
Chelsea: Well, I actually started working for General Motors when I was 17. Not because I cared that much about cars, but because I'm stubbornly self-sufficient and wanted to pay my own way through college.
And as I got into working, initially with Saturn and then ultimately on EV1, I really got sucked into the technology of electric cars, and became enamored with them, and ended up finishing college but never going off and doing what I had studied.
And I really saw a lot of the potential for the technology in terms of the problems it could solve, but personally I'm more drawn to it from a geek technology perspective. And I really got spoiled on all the torque of that car.
I've become much known for my right foot. So it was very compelling to drive around and show people that electric cars are not golf carts.
We also found that, contrary to GM and the other automakers' expectations, people really loved electric cars. And the auto makers really thought, "Oh yeah, we'll put a few out there, and no one will really want them, and we'll be able to move on with our lives and build the cars we really want to build."
And lo and behold, people really did like these cars. And we ended up with a waiting list for the EV1. And obviously they chose to not only not continue to build the cars to fulfill that waiting list but to reclaim the vehicles that were already out there and crush them.
And for a couple years, we tried to stop this until ultimately GM just ended the program, laid off most of the people involved, and really got more aggressive about taking back the bulk of the cars that were left.
And we all did various things, tried to alert the media, get stories, and mostly just tried to see what attention we could draw to it. Generally, most of the media was still publishing GM's press release. And we kinda thought, "Well, gosh. Even if you think we're the crazy ones, it's a really interesting story. It's a perfect Frontline or 60 Minutes or something like that."
And no one would go near it. And so as a very last-ditch effort, a total press stunt, we held that funeral for the car. We were trying to draw attention to the story. We were trying to get attention to the fact that there were these people who loved these cars that worked so well, and the automakers were bent on taking them away and destroying them.
And there had been some pictures running around the Internet of some EV1s that are crushed. And in fact, they were posted by a GM employee who to this day is anonymous, opened up an anonymous e-mail account and sent us these photos and said, "You guys need to know what's going on. And you can use them for whatever you want. Just never try to find me."
And so we've always honored that, but it was just such a striking visual of destruction. And the death of these cars, that the funeral -- only in LA would you bury a car kind of event -- but it seemed fitting to have this sort of mourning for this car.
And so we invited every driver that was left, or at least every car, we had not just EV1, but any kind of EV. And we got a whole bunch of people that were associated with the program and engineers and various people that had worked on the EV1 or the Impact as well as some drivers. And we had a procession, got a Rabbi, and did the whole thing.
It was a little bit of closure for the people involved, and mostly a press stunt. And only when media did come out but told the story so wrong in terms of "you're all looking forward to hydrogen" and just an end-point to this phase, that Chris Paine decided, "okay, if no one else is gonna tell this story, I'm gonna give it a shot and tell it myself."
And so he made a trailer, and eventually we shut them in a room with Dean Devlin, who ended up funding the film. And over the course of three or four years, they set about making this little movie. And most of the time you sort of the time you think you burn copies just for your parents and sort of move on with your life.
So it wasn't really an expectation that it would ever really be seen. But it was certainly a labor of love by everybody, an effort to if nothing else, be sure the story got told. And lo and behold, it actually got a little bit bigger than that and was still running around word of mouth.
So we're working on the next one now, and it's due out next spring. And hopefully a bit more of an optimistic story to tell.
Todd: So there's an EV1 Deep Throat out there who's an unsung hero.
Chelsea: There is at least one, yes.
Todd: In the movie, you really come across as a passionate champion for a product for which the manufacturer did not want passionate champions. Is there a point in the life cycle of the EV1 that you remember when you felt that things weren't going exactly right -- you know that you're doing an amazing job promoting the EV1. But you realize your employer doesn't seem so happy you're doing an amazing job.
Chelsea: Well, there were several. There was not a single moment, and in large part that's because there is not a single GM. I mean, it's a common question -- When did GM decide to kill the program or Toyota or any of the other manufacturers involved?
There isn't a single moment because the company was made up of hundreds of thousands of people at the time who all have their own opinions and factions and various things. So it was less that there was a single moment and more that there was a series of things that just started to happen that just didn't make sense.
And the marketing was kind of obtuse and a little strange. And the fact that they weren't building a ton of cars, and just this whole little series of things happened. And at first, you thought, "Well, okay. GM's very mid-west centric, and they're kind of known anyway for not understanding the California market and struggling with appealing to it."
And stuff like that. So you thought, "you know, there was just a disconnect." I mean, that's really what we boiled it down to at first. And we go to Michigan and go to the factories, and everyone who worked in the factory loved that car like I do. But we'd still get some of them asking in a snowy Michigan November, "Do you think anybody in California will really actually want one?"
Because it was just such a different world there. So it wasn't about whether they liked the car or not. They just still weren't sure there was a market for it. So we just started out trying to prove, oh yes, there is a market. And all of these different sorts of things, and the owners got behind it. And after a while, it became clear that, oh, they were fully aware that there's a market. That was indeed the problem.
So we knew that initially when we started taking a waiting list, we didn't tell GM about it specifically. We didn't hide it specifically. We just did it to prove demand, and when they found out about it, they weren't terribly thrilled. And we were told to hide the waiting list.
And so those sorts of things and what made it clear a few years into the program that oh yeah, they knew. And they weren't happy about it. And well before the automakers actually got together and sued the state of California, it was pretty clear that because of the mandates they were going to dig in and not do this any more than they had to.
Todd: As a business person, I find the whole story astonishing and disturbing -- that a company would really go out of its way in what appears to be a really duplicitous way to kill its own product, and a product that by all accounts was excellent, something that its customers were actually willing to fight for. I don't know a lot of people who are willing to go out and picket and fight and get arrested for their cars. It's amazing.
Chelsea: It is. And I give them crap all the time for it now, about you guys built a car so good people got arrested for it. There's no doubt that we know that GM can build a good electric car. The question is: do you know, GM, that you can build a good electric car?
Todd: You mentioned something I just want to pick up on. It's the weird marketing that happened back in EV1 days. I think that the movie does a great job of defeating GM's claims that there was no demand for the EV1, but I was particularly struck by the EV1 ad campaign that was presented in the movie. There's that scary ad in the movie narrated by Linda Hunt, with the ghoulish shadows. I think it's one of the creepiest ads I've ever seen, and it's hard to believe that campaign was designed to do anything but scare people away from the product. Do you think that that was actually the intention behind the campaign?
Chelsea: Yes and no. The first few ads that came out, we chalked up to the lack of understanding. And there was not just by GM, but by all of the stakeholders, even the utilities and all the various people that were involved with trying to put EVs on the road. There was a struggle with how do we talk about these vehicles as being different?
We're seeing it again in this generation as well, the attempt to -- in a manner of trying to show how easy they are, we try to strip them of all the emotion and make them into these appliances. We start to portray these vehicles not as vehicles but as these sort of weird attached devices that are just another thing we plug into our homes.
Part of that went into the advertising, and just sort of an assumption that we can't market these as regular cars, when in fact that's exactly how they need to be marketed. And so that was certainly a part of the problem as that campaign went on, we saw more and more strange ads, even after we all met with the advertising agency and the drivers all met with the advertising agency and with GM.
And that feedback went back to General Motors that how awful these ads were that when they persisted, then we knew there was something up. And indeed, we've heard since from Hal Riney, who ran that campaign, and we've heard from Hal Riney's folks since about how they would walk into GM with six different ad concepts and sort of lay them out and say, "We really recommend this first one. We think this one'll be the best."
And GM would say, "No, no, no. We want this bottom one." And they said, "No, you don't understand. We think that this one will actually be more effective and here's why." And they went, "You don't get it. We want this bottom one."
So by the end, there certainly was some gamesmanship and let's not make these too attractive. But on some level, I think the effort of this duplicitous conspiracy gives them too much credit.
Todd: So they weren't that smart, and they weren't that stupid.
Chelsea: Pretty much. Yeah. The auto industry is a funny thing anyway. There's a historical notion of the policies of the auto industry depending a lot on who's in power at the time and whether it's a car person or a bean counter.
Business and marketing around this technology has always struggled. It struggled on EV1. It's struggling on the Volt. And that's the piece that remains to be seen if GM's going to be able to get past. The Volt is a good car. No one doubted it would be a good car. And EV1 is a good car.
We know they can build good cars. It's can they do the rest of it? Can they market them well? Can they get behind them? Can they really accept this technology as part of their portfolio in a way that demonstrates this is indeed their figure, at least part of their future?
Todd: Despite everything that's happened, despite the movie and despite the crash of the big auto companies, in spite of everything, the Volt still strikes me as kind of an advanced test. It's a production electric car, sort of a reverse hybrid. But I still kind of get the sense that they're kind of wait and see how this car performs in the market, and I think one of my concerns is that there's still the potential for them to look at this and look at soft demand for an expensive hybrid electric car in a soft market and say, "Well, look. We told you so. There wasn't any demand for the EV1, and there's not a heck of a lot of demand for the Volt either despite all the tax incentives."
Chelsea: I worry about the Volt failing. I worry about it for different reasons. It's more that as a proponent of the technology, I know the technology will be held responsible for all of the early efforts to commercialize it, whether it's the Volt or the Leaf for the Mini E or whatever.
So any of these programs that fail will be a black mark for plug-in vehicles. And there is absolutely an assumption of, well, gosh, if Nissan can't do it, GM can't do it or whatever, then it must not be ready for prime time. There are nuances with respect to GM on that because right now GM's not seen as being able to do an electric car in a sincere way.
So if the Volt is the only one that fails, that effect will be mitigated by the fact that it was GM. I think the genesis of the Volt started off in that same place that you talk about. There was an internal dialog in the company about whether to do a pure EV, and now there are certainly leaders at the top who said -- relative top -- who said, "You know I think the market is limited for a pure EV. And maybe we oughtta aim at something a little broader."
So on one hand, yes I think they were hedging some bets. On the other hand, I think they were trying sincerely to make sure they picked something that had the best chance of success knowing that people would be cynical about the fact that it was them doing it.
Todd: Let's talk about the Volt. I understand the EV1 was a prototype, and the Volt is a production car. But from my lay perspective, in some ways it seems like a leap backwards compared to the EV1 in terms of still being tethered to an internal combustion umbilical cord. And the Volt seems to have a relatively modest electric range of about 40 miles. It seems as though GM is trying to straddle the fence between the commitment to a pure plug-in electric car versus a plug-in hybrid. In some ways, the Volt sort of seems like a little bit like a Rube Goldberg contraption compromised between the two.
Chelsea: It is indeed probably the most complicated way to go about this. I actually categorize the EV1 as a production car. And while GM has wanted to revise history, at the time, it was considered a production car. And in fact, GM talked about it as the most aerodynamic production car ever made.
There is definitely a difference in terms of volume and resources dedicated to the Volt. And that's just the main difference between the last generation and this generation in general.
But with respect to the difference between the EV1 and the Volt, on one hand, GM really approached the Volt as, "Now let's do a real car." And by that I mean, not something hand-built, but a real production line and in a real-volume factory. In this case, they can do up to 250,000 Volts a year if they really wanted to in that factory.
So there is a difference in attitude that is more serious, but the configuration really stems from desire to give consumers an all-electric experience, and I think that's why they went that sort of more serial route than a parallel plug-in hybrid.
They could have cut the battery in half and done a 40-mile parallel plug-in hybrid and called it a day and had it look more like a Prius. But I think they recognized the desire for an all-electric experience, but also really saw it -- they definitely see this range-anxiety thing.
And I think they're right on picking roughly 40 miles in this configuration rather than 60 or 80 or whatever. And we have this debate all the time among the stakeholders of what's the magic number of miles. And for now, given the cost of battery technology, even outside of GM, most of us kind of come down on the 20 to 60 mile range.
And that it'll probably shake out there somewhere. And anything below 20 becomes too little range to be useful, and anything above 40 or maybe 60 becomes carrying around an extra battery pack that you're not generally going to use. Because if you're gonna have gas on board or something else anyway, there's no reason to carry extra batteries and therefore extra cost.
And that's really what it comes down to. So what's the minimum number of batteries you can stick on a car, keep it as cheap as possible, but give consumers enough range they see it as legitimate. And that's the balance I think GM was trying to strike in that.
Todd: What would the US look like, and what would the US auto industry look like today had GM and the automakers had not killed their electric cars back in the '90s?
Chelsea: I think it's probably safe to say the industry and certainly GM would be a whole lot healthier right now. Any of us that were realistic wouldn't pretend that it was a mass-market product back then. And in classic auto industry terms, it's probably not serving as a mass-market product now.
But electric vehicles probably would have enjoyed a trajectory very similar to hybrids. And when Honda and Toyota first started with Hybrids, their first year out combined, they sold something like 7,000 vehicles. I mean that would be a deal killer in the traditional automotive sense for any program.
But they went ahead and had a long enough vision that this was gonna go somewhere that they kept at it. And now it's to the point that hybrids never make headlines anymore. With a few of them, they can barely build enough.
And that's probably something along the lines of what would have happened with electric vehicles and plug-in hybrids. We would have had millions of them by now had we just kept at it. And with respect to the EV1 both Wagoner and Lutz have kind of said, "Yeah, it was a huge PR mistake to have done what we did."
Larry Burns is the only guy from GM that I know of that has publicly said, "It was a huge mistake because it cost us 10 years in terms of an engineering lead." He was VP of engineering, so I think he appreciated the facts more than some of the others.
But that's what really set them back. There were certain components they continued to work on, which was one of the main reasons they were able to get the Volt to market in four years instead of seven. But for the most part, they gave up their lead.
Todd: Speaking of being overtaken, what's your take on where China is today on their commitment to electric cars and progress vis a vis the US?
Chelsea: Well, certainly from a government perspective, China's really bullish on electric cars. And there's no question that particularly China, to a lesser extent India, are factors in our administration and our country in getting serious about electric cars, which is becoming aware of the potential of having our lunch eaten by China. And that's the thing, that general sense of competition, whether serious or playful, is absolutely becoming a factor in all of this.
And that's nothing but good, frankly.
Todd: Do you have any earthly idea of what you would be doing right now if the movie hadn't happened?
Chelsea: No. I'm definitely surprised by the ride that this has been, not least because not only because was the movie gonna be somewhat different, but I wasn't supposed to be in it and didn't know I was in it until I went to Sundance and saw it.
I was a little shocked, actually.
Todd: Wait a second. Back up. You didn't know you were in the film until you saw it?
Chelsea: Yeah. When Chris started it, we sat down right at the beginning and sort of will you help behind the scenes fact-checking and whatnot. And I said sure no problem behind the scenes. And I am actually one of the shyest people in our little movement and in general.
And I said, "As long as I don't have to be on camera, I don't want to be in the movie. But otherwise I'll help you." And he goes, "That's fine. I don't want you in my movie anyway." And so we proceeded on that basis for a few years.
And even during the vigil, I was surprised when the media figured out there was a former employee in the bunch. I mean, I think of myself as kind of anonymous and in the background.
And at the very end, he said, "Well, let's do one quick interview to sort of tie up a couple of loose ends." And we did that whole thing in my mother's kitchen.
And I'm kind of shaking in front of the camera. And our producer, who minces no words, just came over, and she's just like, "Look, we have 300 hours of good film. We have time to use two seconds of this interview. Just chill out so we can do this and go home."
And we finally did and got that interview. But I was operating off the two-second basis. One tiny little clip, maybe, assuming I don't hit the cutting room floor. I was shocked. I went to Sundance, and I was like, "Oh my god! You guys have a very different definition of two seconds than I do."
Todd: Yeah. You went from two seconds to being the star of the film.
Chelsea: Yeah.
Todd: I think that your involvement in the film really gives a human face to the car. And certainly, it's heart breaking to see the cars crushed in the film. Because they just seem like really -- like more than just cars. It seems like the embodiment of some really great ideas and thinking and work. And it's all personified in this car.
And I think that you really gave a human face to that that might not have otherwise happened had you not had such a prominent role in the film.
Chelsea: It's tough to see that from my position. But yeah, the car was the embodiment of an idea and of potential and much more than four wheels and getting from Point A to B.
And I know that that was a lot of the mission -- how do we get people to care about a car anyway, and one they've never heard of and one they didn't have. And how do we not let this be rich person's toy kind of thing?
And I know that they probably had a lot of internal discussions along the way of how to do that. And I'm sure that played into why it changed at the end, and that was just a last-minute decision to put me in it. And I think the fact that it balanced all the middle-aged white guys probably didn't hurt.
It helped add a little color to the personalities in the film. But it definitely was a surprise to me as someone who thought it would be anonymous to go out and do this movie, and it'll be great. You know. Whatever comes it comes of it. But it certainly wasn't prepared or expecting all that has happened since.
Todd: It does seem like you have a cool and interesting and fun life.
Chelsea: It is. I've been very, very fortunate. And that's never lost on me.
Todd: I just wanted to ask you about Tesla. Okay. So the Roadster's an amazing car, but the company, it's struggled obviously. What do you see as some of the key problems that they've had to face up to?
Chelsea: Tesla started with a ton of ambition but not as much actual auto experience. And so a lot of the lessons I think they've learned and their learning curve has been in the department of wow, this industry, this little auto thing, is a bit tougher than they thought it would be starting out.
And they really kind of came from this initial arrogant place of oh, every electric car that came before was a punishment car and everybody from Detroit is stupid and they just need somebody who's innovative and some Silicon Valley type to show everybody how it's done.
And along the way, they've had to go, "Wow some of those auto people actually know some stuff. And we should hire a few of them." So that's been, I think, the core of their learning.
It's really difficult to break into that industry. And we've had no shortage of companies who have tried, and electric car companies that have tried and gas car companies that have tried. And it's just -- it's very difficult for a variety of reasons, and it requires a tremendous amount of capital.
And Elon has been one of the best things that's happened to that company, one of the best people to try to take that on. You need that much ego and ambition to try to take on something that big. And he's also been a little bit polarizing along the way. And they've had some things to overcome, but they're finally in a place where they've got some cars on the road. In fact, they've put more cars on the road than any major automaker today in terms of electric cars. And they've got three partnership now with other huge companies, Daimler and Toyota and Panasonic. And they've got another car on the way.
And there's still a lot of space on the ground that has to be covered between now and Model S. There's no guarantee. But they're definitely in a brighter spot than they were a couple of years ago.
Todd: So you're more optimistic about Tesla today than say a year or two ago?
Chelsea: Oh, for sure. I still think they have a bunch of challenges ahead of them. But I think it would be difficult not to be more optimistic given the capital that they've raised in the last year or two. Two years ago, they were on the brink of demise.
Todd: It does often seem to be the case that there's this assumption that Silicon Valley can do everything better than everybody else, particularly if they've never done it before.
Chelsea: Yeah. No question. And at the same time, we see it some in other companies. It's not unique to Tesla. They were sort of the first to take that task. And they've grown a little humility along the way, too. There's no question about it. And if they skin their knees and have to lay people off, and all of the leadership infighting and the various things that have occurred, it's become clear to them that this isn't quite as easy as they thought.
Google did the same thing for their part when they came in with their initial investment. Obviously, they don't sell cars. But they really kind of came in to this whole plug-in car thing thinking it was very promising. And oh, you know, this can't be that hard. We're Google. And we just need to put our name and our power and a little bit of money behind this, and it'll all be solved.
And so they did their $10 million investment and they got their fleet of plug-in hybrids, and a few years later, they're still trying to figure out if and where they fit into this whole problem, because, lo and behold, it's actually kind of complicated.
Todd: I wonder if that hubris might have actually served Tesla well -- I wonder if they had known then what they know now, if they ever would have taken this on.
Chelsea: I think you're completely right. I think the hubris has served them well. There are places in which it has cost them. But like I said, you have to have some serious nerve to take on what they did. And it's a little bit of ignorance is bliss. They didn't know how hard that really was. And that probably was to their benefit at the time.
Todd: I guess in hindsight it's pretty crazy, isn't it, to set up a car company in Silicon Valley to try to take on the biggest car companies on the planet. But I'm really glad they're succeeding or they appear to be succeeding.
Chelsea: Yeah. I am too. I mean, look. It's crazy regardless of geography. If it was in Detroit, it would still be crazy for a few guys in a garage to convert a car and decide you're gonna take on the rest of the industry or you're gonna prove something that anybody else hasn't been able to or however you define success.
Todd: What is the Lightning Rod Foundation?
Chelsea: The Lightning Rod is a little, tiny nonprofit through which I do the many various things that I do, advising and public speaking and different stuff like that. It's purposely not loud and proud, because it's just a few individuals who believe it's more important to do the work than to put your name on it.
Todd: What can you tell me about Revenge of the Electric Car?
Chelsea: Revenge of the Electric Car is due out next spring and sort of loosely covering a few of the efforts to bring electric vehicles back. There now are so many efforts that we have no longer decided to try to cover every one of them. So we're sort of sticking a few major storylines and looking at things like whether GM will be able to redeem itself with the Volt and is there room for a mass-market electric car like the Leaf, and will Tesla ultimately succeed against the big boys? What role is there for individuals and consumers and the more provocative mad-scientist types -- I use that term endearingly -- but is it only about the major automakers or is there room for others?
Todd: Is it fair to say that this time around, you have a better idea of what role you're actually playing in the movie?
Chelsea: No, not at all. In fact, I'm not sure if I'll be in this one ether.
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