Former GM Head Stempel Turns to Electric Cars: Bloomberg Forum
New York, Sept. 18 (Bloomberg) -- Six years after leaving General Motors Corp., the world's largest automaker, former Chairman and Chief Executive Robert Stempel is still hooked on cars, albeit in a different way.
Stempel, 65, is working on electric vehicles.
''I've had a fascination with electric cars for a long time,'' Stempel told the Bloomberg Forum. ''The Sunracer, a solar- powered car we made at GM, convinced me electric cars really could work in the environment. We just needed the right battery.''
That led Stempel to his current job, chairman of Energy Conversion Devices Inc., a developer of new types of batteries, solar-power devices and rewritable computer disks, based in Troy, Michigan.
Energy Conversion and its subsidiary, Ovonic Battery Co., developed the nickel medal-hydride battery, a powerful, environmentally safe battery used in consumer electronic products and now being introduced as the power source for electric vehicles, such as bicycles, scooters, trucks and cars.
Stempel said it will probably be five to 10 years before the electric car is part of everyday life in the U.S., but he sees the technology making big strides in the meantime.
''We have a contract with GM,'' Stempel said. ''Our batteries are in the Chevrolet S10 Electric Truck that's being sold to fleets around the country, and in just a few weeks we'll be in the EV1, GM's electric car.''
Stempel said the nickel medal-hydride battery enables a car to travel about 100 more miles on a single charge than earlier generations of batteries, which are limited to about 70 miles.
Still High Production Costs
Despite the improvement in performance, the cost of producing an electric vehicle is still high.
''Today we're talking hundreds of electric cars, when typically in the automotive industry we talk of hundreds of thousands of cars, so the costs are substantially higher,'' Stempel said. ''By the time we get to mass production levels, the cost of an electric car will be on par with a gasoline engine car of the same size.''
An engineer by training, Stempel was chairman and chief executive of GM from 1990 to 1992. He worked for GM in a variety of positions for almost 35 years. During his tenure, he helped to develop the first major front-wheel-drive car, and the catalytic converter, which controls engine exhaust emissions.
Energy Conversion is also making nickel medal-hydride batteries to power bicycles and scooters. In February, Energy Conversion teamed up with former Chrysler Corp. Chairman Lee Iacocca's company, EV Global Motors Co., to develop a bicycle powered by nickel medal-hydride batteries.
Closely held EV Global makes electric bikes, scooters, carts and other small vehicles.
''We have licensees in China and Taiwan, which are very interested in the electric scooter and bicycle,'' Stempel said.
Energy Conversion has two other main product lines, solar technology and data storage.
Solar Shingles, Rewritable Disks
In 1990, Energy Conversion and Canon Inc. formed a joint venture that developed a thin device to capture sunlight and convert it to electricity.
''Our solar shingles are starting to be looked upon as a real product, not just a novelty, Stempel said. United Solar began selling products last year, he said.
Energy Conversion said its high-capacity phase-change optical memory will be the technology of choice for rewritable digital versatile disks (DVD).
DVD disks can store seven times more data than comparable CD- ROMs.
''That technology is emerging now,'' Stempel said. ''There will be a good royalty stream from those products,'' using its licensed technology, he said.
While his company's technologies are promising, Stempel said Energy Conversion still needs to turn a profit. For the fiscal year ended June 30, 1997, the company reported a loss of $17.95 million, or $1.67 a share, on sales of $29.57 million. It hasn't yet reported fiscal 1998 results and Stempel wouldn't specify how it did other than to say ''we're still in a loss position, but as many of our new products take off, that is going to change.'' He said ''revenue is increasing.''
Janney Montgomery Scott Inc. analyst James Meyer expects Energy Conversion to become profitable in the year 2001 and grow increasingly profitable from then on.
Shares of Energy Conversion closed unchanged at 5 3/8. The shares have fallen 56 percent this year.
17:05:45 09/18/1998
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