Lee Iacocca on Green Cars

In 2004, one of the auto industry’s most storied leaders, Lee Iacocca, sat down with Green Car Journal to discuss electrification, boomers, and Detroit vs. Japan. Here’s what the outspoken father of the Mustang and the minivan had to say.

Lee Iacocca distinguished himself as an automotive icon over a career that spanned nearly six decades. A hero to many for his leadership role in saving the former Chrysler Corporation from extinction, Iacocca is revered as the father of the Ford Mustang and the man who brought many beloved performance vehicles to American showrooms. Not inconsequentially, he also shepherded to market the Dodge Caravan, the world’s first minivan, changing forever the way that families seek mobility. Iacocca ventured into the environmental automotive realm with Chrysler’s electric TEVan debut under his watch in 1992, and then with electric bicycles and low-speed electric vehicles – decades ahead of today’s trend toward electric bikes – after retiring from Chrysler. The son of Italian immigrants, he exemplified love-of-country by serving as chairman of the Statue of Liberty-Ellis Island Foundation in the effort to renew our national icon in the early 1990s, an appointment made by President Ronald Reagan. Lee Iacocca passed in 2019 at the age of 94.

This article shares a 2004 interview of Iacocca conducted by editor/publisher Ron Cogan and is presented as it originally ran in Green Car Journal’s Spring 2004 issue.

Ron Cogan: After a long and storied career in the auto business, what motivated you to get into light electric transportation like electric bikes?

Lee Iacocca: “Until 1950, the auto business was not that huge. But two things happened. Eisenhower created a 42,000 mile road system and the G.I. bill. The guys came home, moved to the suburbs, and had a new life outside of the city and had two kids. We caught them in the sixties with the Mustang but that was just for fun. Then twenty years passed, and we caught them with minivans because their lives changed.

“The reason I tell you this story is, naively enough, I thought I followed the baby boomers so long I knew them, even though I wasn’t one of them. I got them in 1964, I got them in 1984, and I would get them in 2004 with something electric. The same guy who now has kids and grandkids buys our bike and says it seems like an oxymoron to have a bike that you don’t have to pedal, but you can. It has a seven speed Shimano derailleur on it, first class. But when the kids come home he can’t keep up with the grandkids, so he goes for a ride and uses the electric one on the hills. It doesn’t embarrass him. That was a great theory, but I never made it work.

“I have a folding bike in my garage, it’s a knockout. It folds, it goes in the back of a minivan or Jeep, and I thought all the car dealers in America would have embraced it as an option because it gives you mobility where you can’t use internal combustion engines. I tried to force it, but in five years we’ve only sold about 25,000. But the market for bikes is so huge, all you have to do is get a small percentage of ‘em to say, ‘I’ll give electric a whirl.’

“The time is not here for electric cars. I’ve said that very openly. But the technology was here for light electric transportation and I thought there was demand, but I was wrong. I remember Pininfarina’s car. They had a hybrid in it, and I said, ‘Man this is off to the races, it might get support.’ In the background we’ll sell bicycles. It was light electric transportation systems and I said, ‘Let’s do it.’”

RC: So the vision was that electric bikes would lead to other light electric vehicles like neighborhood EVs and lightweight hybrids like the Pininfarina Ethos. How were you going to do this?

Iacocca: “I wanted every university to get on Lee’s Green Team. I wanted them to wear green jackets on campus, put a bike in every bookstore, and we’d get young people to say ‘Wow!’ If I get a bike in every garage, young kids are gonna say, ‘Hey dad, why do we have three cars and none of them are green?’ They’ll force the issue where older generations won’t. So, that’s what I tried to do when I came here.

Iacocca’s vision encompassed light electric transportation, ranging from electric bikes to light electric cars and other vehicles like the Pininfarina Ethos hybrid concept shown in this mid-1990s advertisement.

“We’ve got a damn good product, at a damn good price. Why did it fail? Well, like fuel cells will fail…the distribution system. I chose car dealers to sell bikes because I knew most of them. Big mistake. It was introduced right in the heart of three years of all-time car and truck sales. Even my close friends who were dealers and bought 25 to 50 of them as a favor to me never put anybody on the showroom floor to sell them, never. So it didn’t work, and now we’re going to independent bike dealers.”

RC: You say that fuel cells will fail? What about the billions that automakers are spending developing fuel cell vehicles?

Iacocca: “Well, they’ll bet the farm on fuel cells, and it ain’t gonna happen easily. Not because I’m an expert here in California, but I’ve dealt with GM research guys and GM has so much going with fuel cells, although Chrysler, through Ballard, has also invested a ton of money in fuel cell technology. But they’re missing the whole problem here. The technology’s probably here now but the challenge is to change the distribution system. Once you’ve got the hydrogen – a challenge in itself – we’ve got to figure out how to deliver it to customers. Developing the infrastructure will require a huge investment. And what are you going to knock out? Wipe out the oil industry at retail levels? You can’t do that. Fuel cells are getting touted too heavily, I think. Am I for it? Yeah, but I don’t think I’ll live long enough to see it.”

RC: Where does politics fit into all this?

Iacocca: “I’ve written two books and I’ve taken the Japanese apart because of their trade practices, but what I’ve really taken apart is that this country does not have an energy policy. I’ve gone through nine Presidents of the United States and I can’t get them in twenty-five words or less to tell me what our energy policy is. I know that we’re at war because of oil, probably. Deep down, we don’t want to talk about it. We’re there for terrorism, right? We’ve got to make democracy come alive in the Mideast. That’s the oil capital of the world and we can’t avoid it. In a democratic nation, a free-enterprise nation, we’ve put up with a cartel and accepted it, and now we’re hooked on their oil.”

RC: What about China?

Iacocca: “Beijing announced they’re going to put restrictions on fuel economy that are stricter than the United States. They’re tweaking our tail here. They’re going to leapfrog and start with hybrids… they don’t want anyone coming over there and giving them a gas-guzzler. They have too much pollution, they depend too much on foreign oil, and they want to stop it.

“Well, that sounds like us in L.A. – we have too much pollution, we want to stop it. We’ve been talking, clacking our gums for 20 years, and nobody really wants to pay an extra dime for clean air. They just don’t want to do it. I’ve been in California 10 years and I’ve never heard people talk more about smog and clean air and do nothing about it, absolutely nothing. The Air Resources Board has tried their best and Detroit fought ‘em like hell, let’s face it.”

RC: Honda and Toyota were the first to market with hybrid vehicles. Many consider them to be in the lead as U.S. automakers are just now striving to bring their own hybrids to the showroom. What’s your take on this?

Iacocca: “I’ve worked with hybrids probably all my life and, by the way, the time has come. I’ve said this many times recently, that Detroit better get cracking or we’re going to be lost in the dust. What are they waiting for? Hybrids are complex and they’re more expensive, but they give you terrific gas mileage and it’s a start towards zero emissions. Is it going to happen? As sure as we’re sitting here…can’t fight it any longer. So it might be by small increments, but I would predict within three years from today, if you don’t have a hybrid car or hybrid SUV, you’re not going to be selling them.

“Every invention brings with it a set of opportunities but also a set of problems, and that’s where you’ve got to direct your attention today. I don’t think anybody has more incentive than the Big Three or whoever is left, maybe the Big Two after the Germans bought Chrysler. So the greatest incentive is for the petroleum industry and the biggest user of that petroleum, the U.S. car and truck industry, to get going or somebody’s going to knock the hell out of them.”