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strategy and business
 / Spring 2011 / Issue 62(originally published by Booz & Company)


Stan Ovshinsky’s Solar Revolution

The big change to the company came when Ovshinsky applied amorphous materials technology to solar energy. In 1983, when he first began to explore the field, photovoltaic cells were still the size of a thumbnail, and made of costly crystalline silicon in small volumes. To considerable skepticism, even within his own company, Ovshinsky insisted that photovoltaic materials should be made of amorphous silicon deposited on flexible plastics by the mile, like newsprint rolling off a press. The deposition process requires high vacuum and absolute isolation from outside contaminants that the manufacturing equipment of the day could not achieve. But Ovshinsky was first and foremost a machinist, so he designed and produced his own tooling. Reflecting its move into mass production, the company changed its name to Energy Conversion Devices, or ECD.

With the success of its solar panels, ECD entered a rapid growth phase that took revenues from a few million dollars a year into nine figures, and the employee roster from perhaps two dozen close associates to more than 1,000. Ovshinsky was now a manufacturer and manager of a large corporation, two roles he had never sought, and for which his iconoclastic temperament proved an awkward match. Although his company had gone public two decades earlier, in the 1960s, its small size and relatively slow growth had kept it below Wall Street’s radar. With the growth and profitability of solar products came increased attention from securities analysts, as well as pressure to concentrate on cash generation. Ovshinsky simply ignored the pressures.

Batteries and Betrayal

For Ovshinsky, a clean-energy source begged for a clean-energy storage solution, but the batteries of the time were highly toxic, endangering workers’ health and the environment. He responded by inventing a rechargeable nickel–metal hydride (NiMH) battery, made of nontoxic and recyclable (and less expensive) materials. NiMH rapidly displaced nickel-cadmium cells in portable electronic devices, and in 1992 the U.S. Advanced Battery Consortium selected the Ovonic Battery Company, a subsidiary of ECD, to scale up its NiMH technology for electric vehicles. Ovshinsky’s battery technology still powers the Toyota Prius and Honda Insight hybrid cars, though more recent electric vehicles like the Tesla Roadster and Nissan Leaf use lithium-ion batteries, a newer technology developed for cell phones and laptops.

In December 1996, GM began a limited launch of its EV1 pure electric car. The California Air Resources Board (CARB) then agreed to delay implementation of the first phase of a zero-emissions vehicle mandate that had been scheduled to go into effect in 1998, ordering that the seven biggest carmakers — the largest of which was GM — would need to make 2 percent of their fleets emissions-free by 1998, 5 percent by 2001, and 10 percent by 2003. Powered by lead-acid batteries, the first-generation EV1 had a range of 70 to 100 miles.

What should have been Ovshinsky’s greatest triumph came when General Motors selected his tiny company over 60 other bidders to provide batteries for the second-generation EV1 in 1999. His battery doubled the EV1’s range to 140 miles. GM acquired a majority stake in the company, changing the name to GM Ovonics, and the future looked bright. Robert Stempel, who wrapped up a 37-year career at GM as chairman and CEO in 1992, joined ECD Ovonics as an advisor in 1993, and became chairman in 1995. Time magazine called Ovshinsky “a hero for the planet.” But General Motors was ambivalent about the EV1, and its small base of early adopters.

As shown in the documentary film Who Killed the Electric Car? oil industry groups lobbied successfully to end California’s zero-emissions mandate. In the meantime, GM sold its stake in GM Ovonics to Texaco, which in turn was acquired by Chevron. Despite candlelight vigils by EV1 owners, GM recalled all its leased electric cars and crushed all but a few, which were donated — minus their drivetrains — to museums.

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  1. Hellmut Fritzsche and Brian Schwartz (editors), Stanford R. Ovshinsky: The Science and Technology of an American Genius (World Scientific, 2008): An introduction to Ovshinsky’s key innovations and inventions, plus a selection of his most important scientific papers and a listing of his patents by subject.
  2. George S. Howard, Stan Ovshinsky and the Hydrogen Economy: Creating a Better World (Academic Publications, 2006): A detailed account of Ovshinsky’s quest to make hydrogen practical as a transportation fuel.
  3. Eric Spiegel and Neil McArthur, Energy Shift: Game-Changing Options for Fueling the Future (McGraw-Hill, 2009): An overview of the sweeping changes under way in power generation and transportation, and the challenges and opportunities that governments and businesses will face over the next two decades.
  4. Stan Ovshinsky’s Facebook page.
  5. For more on this topic, see the s+b website at:
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