Reeling from oil crises of the 1970s, the American auto industry grappled with tough new mileage standards they feared could make their gas guzzlers obsolete. In 1978, Exxon presented manufacturers with a novel solution from its own labs: a device to help power the electric motors of hybrid vehicles.

"The future of the full-sized car was questionable—until now," according to a glossy brochure Exxon printed for the pitch. Exxon said its technology "is not in developmental stages; it is ready now. The prototype has been engineered, tested, driven, proven."

Exxon by then was at least four years into pioneering research to find alternatives to gasoline-powered cars, driven by worries that petroleum would soon run out. The company had already unveiled the first rechargeable lithium-ion battery, which it thought could be a precursor of batteries for electric vehicles. Now, Exxon hoped its new electric drive technology could make mass production of hybrids feasible.

Exxon's ambitious work on powering clean vehicles 40 years ago parallels its early, cutting-edge research on climate change, chronicled by InsideClimate News in its series Exxon: The Road Not Taken. As with the emerging carbon dioxide problem, the possibility of devising alternative power sources for hybrid and electric cars spurred research at a handful of oil companies. But none committed the same resources and manpower to these efforts as Exxon, the world's largest oil company.

The Exxon automotive team (L-R John Corcoran, David McCalvin, Luciano Forte and Bernard Dennison) stands in front of the Toyota Cressida that was delivered to Japan. (Courtesy: Keith Dennison)

The American carmakers were not interested in Exxon's technology, but Toyota entered into a collaboration. In 1981 Exxon's engineers delivered a hybrid gas-electric Toyota Cressida to Japan. It was outfitted with Exxon's technology that enabled use of an AC (alternating current) motor in a hybrid—cheaper, smaller and more reliable than DC (direct current) motors.

Despite that triumph, Exxon soon scaled back its investments in alternative energy, largely held by its venture capital unit, Exxon Enterprises Inc. (EEI). A drop in oil prices cut into budgets that financed EEI. And a rising generation of top management wanted Exxon to return to its core oil and gas business, rather than fashion itself into a comprehensive energy company. Exxon sold its licenses for the battery division's work and dismantled the electric drive team that built the hybrid Cressida.

Sixteen years later, when Toyota launched the world's first mass-produced hybrid car, the Prius, it was equipped with an advanced AC motor.

The CO 2 and alternative energy research efforts were independent of one another, but they're artifacts of an era from the early 1970s to the mid-1980s, when Exxon considered evolving beyond oil and gas. Based on interviews with former Exxon researchers, internal documents and legal depositions, the story of Exxon's work on low-emissions vehicles points to another road not taken.

"If I'd been smarter, I would have understood that Exxon was an oil business and probably was always going to stay in the oil business," said Robert Hamlen, former general manager of Exxon Enterprises' battery division. "It was a company made of oil people."

Exxon did not respond to requests for comment. But after ICN contacted the company about this story, it published an article on its own website entitled, "Pioneers of innovation: The battery that changed the world." In it, Exxon says it hired its chief battery researcher "in the early '70s as part of an initiative to expand the energy company's reach."

Since Exxon curtailed its in-house clean vehicles research, greenhouse gases from cars and trucks have turned into an urgent problem. Auto emissions account for nearly a quarter of heat-trapping gases. For the world to rein in emissions so that average global temperatures do not rise beyond 2 degrees Celsius, at least 20 percent of vehicles worldwide, or 100 million cars, need to be electric by 2030, according to the International Energy Agency. There are only about 1 million on the roads today.

Exxon had grown skeptical of fully electric vehicles, or EVs, over the course of its 10-year research. Its position has not changed in 40 years. In its 2016 energy outlook, Exxon estimated that 40 percent of new car sales by 2040 would be hybrids, while EVs would account for only 10 percent.

"While a lot of improvements have been made, the fundamental challenges of how you do have a battery with performance that the consumer will require has not been [overcome]," said ExxonMobil chief executive Rex Tillerson in a 2015 speech, according to Bloomberg News. "We look at the science and we think it's a very, very daunting challenge."

Exxon Greenlights Idea That 'Could Revolutionize Batteries'

EVs were not a new idea in the 1970s. Popular at the turn of the 20th century, they began to fall from favor in the 1910s, because they lacked the range to drive longer distances on the nation's networks of new roads. They all but vanished in the 1930s with the discovery of large oil reserves around the world and advances in internal combustion engine technology.

In the 1960s, rising air pollution from tailpipes renewed government and corporate interest in clean energy vehicles. By 1970, the oil industry saw opportunities in innovating beyond oil. U.S. petroleum production had peaked and oil-producing countries of the Middle East dominated global markets. That year, Victor Wouk, an independent scientist who would go on to make an early hybrid car, presented a paper at an oil industry conference about the challenges and rewards of electric vehicles.

The electric car could be "a treat that can be introduced via the bridge of the heat engine/battery hybrid vehicle over the next several decades. Everyone should be encouraged to promote the development of electric vehicles," he concluded.

It was around that time that Exxon was taking steps to become a broader energy company. Interested in EVs, the company ended up tackling two main barriers: rechargeable batteries and efficient electric motors.

"Exxon was supposed to sell oil and gas, and here we were developing something that would be using less oil and gas," said David BenDaniel, a vice president at Exxon Enterprises and now a professor of management at Cornell University. "We recognized the amusing aspect of it."

EEI, the company's venture capital arm in New Jersey, invested in solar and nuclear power projects, among about three dozen non-oil ventures, from fax machines to lasers. Exxon hired the stars from other corporate labs and academia to work on them.

Among those was M. Stanley Whittingham, a chemist the company wooed from Stanford University. Hired in 1972, Whittingham said he was given free rein "to work on anything energy-related, provided it was not petroleum or chemicals." His new boss worked on superconductivity, the property of materials to conduct electricity with zero resistance.

Whittingham's rechargeable battery. (Courtesy: Kevin White)

A breakthrough came quickly. Six months after Exxon hired him, Whittingham showed for the first time that lithium ions could be inserted between atomic layers of the compound titanium disulfide (TiS 2 ), and then removed without changing the nature of the compound. The process, known as intercalation, created chemical bonds that held a tremendous amount of energy. And it led Whittingham to make a prototype rechargeable battery.

Further, his battery functioned at room temperature. For years, corporate and government labs had researched ways to make rechargeable batteries, but the compounds they used could only generate electricity at high heat. That made them potentially explosive.

Around 1973, Whittingham pitched the idea of rechargeable battery research to members of Exxon's board of directors.

"I told them we have an idea here that basically could revolutionize batteries," said Whittingham, now distinguished professor of chemistry, materials science and engineering at the State University of New York at Binghamton. "Within a week, they said, 'Let's invest money there.' In those days, they were extremely enlightened, I would say."

Whittingham led the research team, called the Advanced Battery Project, at Exxon Research & Engineering labs in Linden, N.J. Hamlen, the lead manager of electrochemistry at General Electric and a battery expert, was hired to head the engineering group that would make and test the battery.

In 1976, Whittingham published a groundbreaking paper in Science that announced the "electrochemical reaction of layered titanium disulfide with lithium...is the basis of a new battery system."

About a year later, Exxon entered into discussions with Swiss watchmaker Ebauches to use Exxon's rechargeable battery, the first viable product based on Whittingham's research. The watch battery could be fully discharged up to 10 times. (Today's electric car batteries must be able to charge and discharge 500 to 1,000 times.) To recharge, the watch had a tiny solar panel.

Ebauches, later part of the Swatch group, tested the battery by placing it in a hot oven daily for six months, Hamlen said. Exxon prepared to commercialize its new rechargeable batteries, which the EEI team thought could grow into a multi-million dollar business.

"The work by Stan Whittingham, who had been a postdoc in my lab before joining Exxon, was very important," said Robert A. Huggins, professor emeritus of materials science at Stanford. "A number of changes have occurred in the development of batteries in the 40 or so years since that time, and lithium-ion batteries are now critical components in many important technologies."

Exxon Delivers a Hybrid Car to Toyota, Years Before the Prius

About a year after the Exxon board of directors greenlighted Whittingham's battery project, a young engineer named Ron Ricci was tasked with pulling together a team to improve the performance of electric motors. Other scientists and engineers had built prototype hybrid vehicles by then. That included Wouk, whose 1974 hybrid Buick Skylark got 30 miles per gallon—double its regular mileage—and emitted 9 percent of the emissions a typical model did.

Ricci plucked a promising engineer, Kevin White, from a recently failed startup that Exxon was invested in, called Electromotion, which made electric vans.

Kevin White (right), Ron Ricci (center) and John Corcoran (left). (Courtesy: Kevin White)

Ricci, White and a secretary launched Electric Vehicle Control Systems (ELVECS), housed in a maintenance building on the edge of Exxon Research & Engineering's large Florham Park, N.J. campus. ELVECS had the heady, experimental feel of a start-up, with the vast resources of Exxon behind it. "It was the best job of my career," White said. "We were young and naïve for the most part. We sort of didn't know what we didn't know."

In November 1976, ELVECS hired a full-time consultant, Richard H. Baker, a former MIT electronics researcher who had developed an alternating current synthesizer, or ACS, which converted direct current (DC) power to alternating current (AC). Baker's synthesizer was also able to vary the frequency and voltage of electricity to change the speed of the electric motor, crucial to controlling the speed of the vehicle. Other labs had built similar devices, called variable speed drives. But they were too large, inefficient and expensive to be practical, Baker, who is deceased, said in a 1980 document. Baker's was small—compact enough to fit in a car's trunk.

At first, Ricci's group explored the possibility of a pure electric vehicle. Jeep had made 375 electric postal vans as part of a pilot program, but the batteries' high cost was prohibitive, Ricci said. The Exxon team bought one "just to get electric vehicle experience," he said. For experimentation, it also bought a low-riding sports car chassis that could be assembled from a kit. The team outfitted it with lead-acid car batteries, Exxon's electric drive technology and a DC motor.

By the late 1970s, Exxon Enterprises understood that despite the advances of Exxon's battery group, the type of rechargeable battery needed to power a commercially viable electric vehicle was many years away. So Exxon focused instead on deploying its ACS technology in a hybrid vehicle with lead-acid batteries.

The EEI automotive team created a brochure that showed off to automakers the hybrid prototype Exxon had built: a Chrysler Cordoba, which got 27 miles per gallon. That was the mileage target that the Environmental Protection Agency required of vehicles by 1985.

"Detroit, your future can be both as big and as small as America wants it to be," the brochure's cover read.

From the Cordoba brochure

Exxon engineers drove the Cordoba around Florham Park and elsewhere while running errands to test its performance. Bystanders never guessed it was anything other than a regular Cordoba, they said.

Exxon approached major automakers with its ACS technology, including General Motors, Chrysler, Ford and Peugeot, said John Corcoran, a mechanical engineer Exxon had hired from Ford. The company most interested turned out to be Toyota.

"We discussed back and forth with Toyota what they wanted to do," Corcoran said. Toyota was after driveability, he said. "We kept talking about fuel economy but Toyota wasn't interested in that yet. They felt that problem would get resolved. They were more interested in whether it would drive the same as a regular car."

In autumn 1979, Toyota and Exxon signed a joint technology agreement. A small group of engineers from Toyota's research facility in Susono, Japan visited the Exxon Enterprises automotive group in New Jersey to see the Cordoba. It had 10 Sears Die-Hard car batteries to provide electricity, and Baker's ACS device in the trunk. The four-cylinder, 50 horsepower diesel engine came from a Volkswagen and the 100 horsepower AC motor was the type normally used in a small aircraft. Their hybrid was among the earliest to use an AC motor.

Toyota decided it wanted Exxon to outfit its largest sedan with the new technology. In early 1980, it sent a white Cressida to New Jersey where the Exxon automotive team installed, tested and refined its hybrid technology over more than 18 months.

Exxon engineer John Corcoran in Japan with engineers from Toyota. (Courtesy: Kevin White)

Around September 1981, Corcoran and his colleagues delivered the gas-electric hybrid to the Toyota research facility in Susono, near Mt. Fuji. The Exxon team spent two weeks installing and testing the Cressida's gas-electric hybrid drive system, and their Toyota counterparts seemed pleased, the Exxon team recalled.

The project the two companies had embarked on nearly three years earlier produced the roomy, driveable hybrid that Toyota had sought.

Toyota would begin selling its Prius hybrid 16 years later, in 1997. It was developed in part by a team in Susono and equipped with a gasoline engine and a 40 horsepower AC motor.

"We shouldn't overstate Exxon's role in hybrid vehicles in the long term," said Corcoran, himself a Prius owner. "But if we planted any seed at all with anyone, it was that the electric motor in a hybrid could be an AC motor."

Why Exxon's Hybrid Car Technology Program Was Dismantled

Soon after Exxon's automotive team successfully delivered the Cressida to Japan, Exxon informed the team its work on hybrid vehicles would end.

The reasons were several. Exxon by then was demanding a bigger, more immediate pay-off from its alternative energy projects. As part of that effort, the company bought Reliance Electric in 1979 to commercialize its ACS technology.

The acquisition quickly became a fiasco. The Federal Trade Commission sued Exxon to stop the purchase, arguing the merger would make the electric drive market anti-competitive. The agency dropped the case after Exxon agreed to restructure its electric drive work and hand the auto team to Reliance. But the managers at Reliance had little faith in the cost-saving promise of Baker's ACS device and in Exxon's team, according to former Exxon staff. They limited their interaction with Exxon Enterprises and ER&E, complicating the auto work and restricting progress.

Traffic in New York City, 1980. (Photo: Getty Images/Keystone/Stringer)

The price of oil had also peaked in 1980 and began to fall throughout much of the decade, leading to cost-cutting at Exxon. In 1981, Lee Raymond became executive vice president of Exxon Enterprises. He was part of a group of managers who rose in the 1980s that curtailed work unrelated to oil and gas, including alternative energy. Raymond recommended closing many of EEI's ventures and selling others, eventually shuttering the subsidiary by the mid-1980s. At the same time, Exxon scaled back nearly a decade of leading-edge climate research, which had shown that combustion of fossil fuels had increased carbon dioxide in the atmosphere, threatening a warming of the planet and potentially "catastrophic" results.

Exxon delivered its ACS materials and the hybrid Cordoba to Reliance Electric. It remains unclear what happened to the car. Exxon sold Reliance to an investment group in 1986.

The Exxon auto team members interviewed for this story don't know whether the work with Susono seeped into the vast project that Toyota launched in 1993 that ultimately yielded the Prius.

A Toyota spokeswoman said the company could not locate any employees who could "provide any additional information on this program."

Likewise, the watches with Exxon's batteries were never made.

"They said to us with some rationality, 'We're a multi-billion dollar company. Why do we need this?'" Hamlen said. "If I were to characterize Exxon's new ventures in two words, it would be 'unrealistic expectations.' They thought that because they were good at oil, they could handle these new ventures in other areas, too."

The new web article by Exxon touts Whittingham's battery as the technology that today "powers laptops, tablets, cellphones and most electric cars." It doesn't explain why it shuttered the program.

Hamlen and Whittingham kept a few of the button-sized watch batteries they made at Exxon. Recently, they tested them for a peer-reviewed paper to see if they would work after 35 years. They found that the batteries had retained more than 50 percent of their original capacity.

"If you make the battery right," Whittingham said, "it will last for a very long time."

ICN reporter David Hasemyer contributed reporting to this story.

Photo credits:

Top image: Exxon's hybrid Cordoba (Credit: Cordoba brochure)

Contact sheets: Exxon's electric kit car (Courtesy: Kevin White)