Eyeing a Future of New-Fuel Cars

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What motivated you to write Zoom?
I had been looking at energy and environmental issues for a decade at The Economist. I'm an engineer from MIT, so I've always been interested in technology issues. But I have seen that things move very slowly when it comes to energy. It's not like a cell phone where we flip out every six months and get a cool new phone. Change comes very slowly. At the same time, the problems are quite serious—global warming, oil addiction, all of the complications that come from using dirty fuels the way we do.

A couple of years ago, it became quite clear to me that a perfect storm of forces was going to lead to much more rapid change. This happens in industries only once in a while. We saw this in the computing industry when the move toward distributed network computing arrived, and the old dinosaurs of the business that did mainframes were wiped out. Companies like Digital Equipment and Wang were big names, and they went bankrupt because they couldn't handle a sudden, disruptive change. A company like IBM [IBM], on the other hand, was a dinosaur that somehow managed to dance.

That's the challenge now being posed by this perfect storm of clean technologies, new public policies that take climate change seriously, and public awareness and a demand for change. That's fundamentally changing the paradigm of the energy business. That's why I decided to write this book with my co-author [Carson], who is our planes, trains, and automobiles guy. He knows a lot about cars. I know a lot about energy. We put our heads together to write a book about the clean car of the future and life after oil.

What is the book's main point?
After a century of being joined at the hip, the car industry and the oil industry are headed for a divorce. Cars are about to leave behind the dirty fuel—in this case, gasoline—that has powered them. In the way personal computing transformed the information age, in the way that mobile telephones can now be found in African villages that never had a landline phone, this is a disruptive innovation. It's going to have dramatic consequences throughout the energy and car industries. Each of these is a trillion-dollar industry in its own right. In the long term, I think we're going to see a convergence of these two great industries as the line between car plants and power plants blurs. We will see a smart, sophisticated, software-rich car of the future very soon. They are going to be plugging into the wall, they're going to be getting electricity from the grid, and they're going to be feeding electricity back.

Who is winning the race to build fuel-efficient cars?
It's too early to call any winners. But if you're to handicap the race, you'd have to say the Japanese have taken the lead because of the hybrid technology—not just Toyota [TM] but Honda [HMC] also. That's a smart software-based approach to making the car more efficient. Detroit is not out of the game yet. A company like General Motors [GM] has spent a billion dollars on hydrogen fuel-cell cars. All of the major car companies are working on making electronics and software, including plug-in hybrid cars that are going to come in the next three to five years that you'll plug into your household outlet, so that they'll run on electricity or gasoline. Chevy is going to come out with one of them.

There's a real chance for a renaissance in Detroit if those dinosaurs learn to dance, evolve a new business model, and innovate with new technology. The big question is which path will the Detroit companies take? Are they going to stick to their guns and defend their assets? Milk their existing base and fight for every scrap they had in the past and fight in Washington to have political protection? Or are they going to say, "Let's take some risks. Let's invest for the long term. Let's innovate and ultimately reinvent our company." That's the kind of leadership, I think, that's going to reinvent the car industry in America.