The Secret 130 Year History of Electric Vehicles

Henry Ford and big oil have spent the last century trying to kill the EV, but it seems like their time is up.

The growing popularity and adoption of electric vehicles (EVs) can largely be contributed to serial entrepreneur, Elon Musk, and his brilliance with Tesla. The prodigious humanitarian’s leadership and vision surrounding the all-electric automotive company has garnered the general public’s attention and prompted the industry to start following suit in the manufacturing of these more sustainable vehicles. Yet as the dawn of automotive electrification crests above the horizon, it’s important to reflect on the era of the past to see how our current situation came to be. With that, let’s take a journey back to the time of Musk’s innovative predecessors, Thomas Edison and Henry Ford.

The year is 1886. German engineer Karl Benz just invented the first internal combustion engine (ICE) vehicle, the Benz Patent-Motorwagen. Earth has just been gifted one of the most influential creations of the 20th Century: the world’s first production car. Perhaps Benz realized the potency of his latest creation, but what he did not realize was the importance of the race that was about to ensue.

Despite having first mover’s advantage, back during the turn of the 19th Century, ICE vehicles did not dominate the market; in fact, they didn’t even compete for the majority market share. As surprising as it may sound, at the beginning of the 20th Century, 40% of American cars were powered by steam and 38% were electric — gas cars only made up 22% of the American market. At the turn of the century, electricity was making a name for itself. General Electric and its founder, Thomas Edison, were in the process of electrifying cities across the country, popularizing the use of direct current, and doing great work on batteries. At the time, electric cars had nearly double the market share of gas cars. In the early 1900s, The New York Times even referred to the electric car as the “ideal” car, citing it as quieter, cleaner, and more economical than its gas competitor. Despite all this, ideal wasn’t the driving force of the early auto industry — scalable was.

In 1908, everything changed. Henry Ford and his five-year-old company came out with the car that took the automotive industry into the stratosphere: the Model T. This iconic production vehicle was the world’s first fast, sturdy, and affordable car. With this invention, Henry Ford all but ended the aforementioned race between EVs and ICE vehicles.

Before the Model T, both types of automobiles had their problems: EVs had short ranges and long recharging times, while gas cars were loud, hard to start, and emitted large amounts of smoke. A race was present and the victor unknown, but the path to success was very clear: the first vehicle to first solve all its problems would come out on top– queue the Model T. What Henry Ford did was unbelievable, he added an electric starter to gas cars to make them easier to start, he added a muffler to quiet the noise of the vehicle, and, most importantly, he found a way to scale the Model T via the assembly line. As ICE vehicles finally got their act together, EVs stood ineptly from the sideline and watched their competitor begin to flourish. Just like that, by 1914, 99% of new American cars ran on gas; by 1920, electric cars dropped entirely out of commercial production. The race had been won, the victor, Henry Ford, and ICE vehicles.

The important aspect to take away from this brief historical summary is that it was a race, it wasn’t 100% certain that ICE vehicles would be the norm. The future of cars had been up for grabs, yet Henry Ford outsmarted and outperformed the competition. Yet despite the near extinction of EVs, a threat of return still remained. To combat this, two players joined forces for years to come: automotive manufacturers and Big Oil.

After the takeoff of ICE vehicles, oil companies started reeling in the dough. Their resource was now able to be used in mass quantities, thus fueling an increase in demand and an influx of profits. Obviously, Big Oil wanted to keep things this way, with their revenue soaring, they proceeded to keep EVs all but an afterthought.

For EVs, solutions to the aforementioned problems of limited range and slow charging times were stunted by one thing and one thing only: battery technology. Big Oil knew this, so for the next 85 years, from 1920–2005, they proceeded to buy up any EV or battery companies making any serious progress. As unethical as it may sound, especially keeping in mind the environmental impact of these decisions, Big Oil would use their earnings to eliminate EV competition by simply buying up any battery or EV company and then immediately kill the business, rendering their technological and sustainability progress useless. On top of that, car manufacturers, often paid by Big Oil, agreed not to work on the development of EV technology, and why would they– a majority of their profits came from consumers’ incessant maintenance costs associated with owning an ICE vehicle. To speak further about automotive companies actions toward EVs, in the 1990s, GM made a great EV called the EV1. Yet after its creation, GM realized that if the EV1 became very successful, taxes against ICE vehicles would sweep across the nation cutting their profits. With that, they stopped production of the EV1, recalled them all, and destroyed them. Extremely effective business maneuvers, these practices continued all the way up until they could no further: till the advent of the smartphone.

You see, EV advancements could be halted as long as the major players in the battery space were making major advancements in any other fields. This was entirely the case up until all but the early 2000s. Thanks to major computer companies such as Microsoft and Apple, mobile technology started to really take off. Laptops were being built, iPods were taking the world by storm, and most importantly, smartphones were being created. Prior to these inventions, the demand for battery technology could be halted by Big Oil, but now a bigger player had immersed in the field. Consumers now demanded battery-inclusive products, and with multi-billion dollar tech companies now stepping up to the plate, Big Oil’s once firm grasp of halting the industry was now slipping away. Battery technology soon began to see rapid technological advancements thanks to the massive investments through technology manufacturers.

In 2003, things really started to change when the first electric sports car was created. AC Propulsion, an EV company utilizing the new, lithium-ion battery technology, created a car called the “tzero” that went 0–60 mph in 4.9 seconds. To boast even further, the car range of over 250 miles on a single charge– farther than the base model of the Tesla Model S, X, and 3. This blew the previous competition out of the water and, saliently, brought the catalyst into the picture: Elon Musk.

Having just reaped $180 million from selling his share of PayPal to eBay, Mr. Musk was looking where to take his talents next. Amazed at the recent development of EV technology, and already familiar with alternate automobiles, Musk decided to come on board with Tesla. Soon buying out the founders and taking over the company, Musk decided he was going to pave the way for the pendulum to finally switch side. With that, he launched a mass consumer adoption plan:

Tesla’s Long-Term Business Strategy

Step 1: High-Priced, Super Fancy, Low-Volume Car for the Super Rich

• $100k car
• Build something awesome to:
• Show the world how great an EV can be
• Generate revenue to develop their Step 2 car
• Launch car in specific market: luxury performance sports car
• Utilize top-down model in getting rich celebrities to buy in first which in-turn showcases prestige to regular consumers

Step 2: Mid-Priced, Pretty Fancy, Mid-Volume Car for the Rich

• $75k car
• Funded through profits from Step 1

Step 3: Low-Priced, Fancy, High-Volume Car for the Masses

• $35k car (before EV tax credit, $27.5k after tax credit)
• Traditionally, this would be infeasible since the car battery alone costs $20k, so Tesla’s building a $5 billion “Gigafactory,” a sustainably energized factory capable of producing 30 GWh of lithium-ion batteries per year, an amount equivalent to all the lithium-batteries currently in the world
• This will supply all the batteries needed to produce their 500,000 Model 3s a year and, more importantly, drive down the cost of lithium-ion batteries at least 30%
• With this, EV range will increase substantially since it can then load more batteries in cars but for the same price
• Funded through profits from Step 2
• This step is why Tesla exists
• If executed properly, Step 3 will change the world

Thanks to Tesla, the change has now arrived. Car manufacturers like Chevy and Nissan have realized the impact Tesla has made and started making plug-in hybrid and battery electric cars of their own. Major car manufacturers such as VW have made plans to launch many new EVs in the coming years. Countries have passed legislation requiring and incentivizing the adoption of EVs. Big Oil has taken note and started investing in solar energy. Infrastructure has followed suit and adjusted to the growing demand of EVs. EVs time is not quite here yet, but it is coming. It could have happened much sooner if not for ICE vehicles winning the automotive race of the 1900s and Big Oil and car manufacturer stunting its growth, but that’s in the past– EVs are the future.

Get ready.