The End of the All-Electric Fantasy

Buck Throckmorton29 Feb, 2024 4 Min Read
Internal-combustion apples, electric oranges.

The idea that Ford and General Motors can manufacture and sell electric vehicles that compete with Tesla is as preposterous an idea as Exxon trying to manufacture and sell office machinery to compete with IBM. But Exxon did attempt to do just that back in the 1970s, and it was about as financially disastrous as the E.V. debacle that is playing out right now for Ford and GM. Just as it is an accepted fact among our current ruling class that there will be a carbon-free future without gasoline-powered cars, it was a known fact in the 1970s that we had hit “peak oil” and that the best days for petroleum companies lay behind us.

In fact, “experts” were in agreement that energy shortages were the "new normal," and that conservation efforts such as lowering the thermostat in winter and driving small cars were the only short-term solution to deal with the “crisis” of energy resources being depleted.

Ahead of his time then, behind the times now.

Exxon’s executives were savvy and forward-looking, thus they wanted to diversify before it was too late, so they launched “Exxon Office Systems” which offered a lineup of then-modern office equipment such as word processors, faxes, and typewriters. While the products were good, the Exxon name carried no weight in getting customers to switch from companies such as IBM and Xerox, whose core business lines were office machinery.

Finally in 1984, Exxon pulled the plug on its failed office systems venture, taking a write-off of more than $1 billion (which is equivalent to about $3 billion now.) It was also a tremendous failure for the leadership at Exxon, who were so heavily invested in the concept of Exxon becoming something other than an oil and gas company. This is from a Washington Post story in November 1984.

Those write-offs would continue a company pattern of disappointing results when it tried to do something other than drill for and refine oil. But analysts say the embarrassment of writing off the office-systems division may be worth it to Exxon to stop the continuing losses from the operation. A company source said the division will lose more than $70 million this year, which is more than one-third of its revenue.

Announced with much fanfare in the mid-1970s as a competitor to such computer giants as Xerox Corp. and International Business Machines Corp., Exxon's office-systems division was seen by the company's executives as a major diversification from the oil and gas business. The company hoped to make $1 billion from office-equipment sales by 1985. But the venture never came close to living up to the lofty expectations for it.

An outline of that story, along with its key phrases, could be used as a template for reporting on Ford’s and GM’s financially disastrous E.V. adventure.

  • “…a company pattern of disappointing results when it tried to do something other than [its core product.]”
  • “…the embarrassment of writing off [the failed venture] may be worth it…to stop the continuing losses from the operation.”
  • “Announced with much fanfare…as a competitor to [IBM/Tesla/etc.]… [the failed venture] was seen by the company’s executives as a major diversification from [its core product.]”
  • “But the venture never came close to living up to the lofty expectations for it.”

At least Exxon never announced that it was fully abandoning petroleum for office machinery. By contrast, GM is still pretending that it will be an all-electric company by 2035. It won’t. It can’t be. It reflects on how poorly managed GM under Mary Barra is that its CEO still clings to the all-electric fantasy.


There is nothing wrong with the fact that Ford and GM are ill-suited to compete in the electric vehicle marketplace, just like it does not reflect poorly on Exxon that they never became a successful player in the office machinery marketplace. E.V.s are radically different in design, propulsion, and operation than the mass-market vehicles that Ford and GM have excelled at producing and selling. Adding a new electric vehicle to the ICE production line is not the same as adding a new 4-cylinder, compact SUV. A new electric model is actually an all-new industrial product. For Ford and GM, not being a competitor in the E.V. market should be as insignificant as the fact that they are not competing in the 18-wheeler or school bus markets either.

Peterbilt doesn’t sell sedans, Tesla doesn’t sell minivans, and Toyota doesn't compete for E.V. market share. They all know their lanes. Apropos of this topic, Apple just announced this week that it was suspending its decade-long project to build a self-driving, electric car. Apple spent billions of dollars on this project before coming to understand that an E.V. is not just another electronic device, much like an E.V. is not just another vehicle model.

There are an abundance of four-wheeled vehicle types that Ford and GM do not manufacture. These include golf carts, ATVs, forklifts, tractors, backhoes, mobility scooters, and wheelchairs. Beyond devices with four wheels, there are various other craft that convey people between two points, such as airplanes, boats, motorcycles and bicycles. Ford and GM also don’t compete in those markets, nor should they bother to compete in these specialty markets, just like they shouldn’t try to compete for Tesla’s niche of being an exclusive, short-range, limited purpose, second car.

For Ford and GM to go “all electric” based on the success of Tesla is as preposterous as Coca-Cola abandoning carbonated soft drinks because a startup company is having success selling fruit and vegetable smoothies.

The reality of the E.V. bust is causing legacy automakers to slow down and try to stop the bleeding. That is only delaying the inevitable. It is time for Ford and GM to pull the plug on their E.V. dreams altogether and focus exclusively on what they do best – manufacturing reliable, mass-market, gasoline-powered vehicles. The money and effort spent trying to persuade consumers to buy E.V.s would be put to much better use trying to persuade government to back off its unattainable emissions regulations.

Buck Throckmorton is a writer ("co-blogger") at the Ace of Spades HQ blog. His career includes many years in banking and commercial lending, as well as a stint with an American auto manufacturer. Buck's writing often takes a critical look at electric vehicles, "green" energy, and woke capital. Twitter: @BuckThrockmort; email:


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5 comments on “The End of the All-Electric Fantasy”

  1. I was surprised to read an article about a company I worked for 40 years ago, Exxon Office Systems. I was one of the programmers on the word processor product. It is interesting to see some of the advertisements that were made at that time. Such an interesting read. Thank you for writing about the failed venture of EOSC.

  2. Except look where IBM and Xerox are today. Exxon (now ExxonMobil) was definitely a better bet--then and now.

  3. Speaking of staying in one’s own lane, maybe it’s time that the federal government gets out of the market economy and return to its constitutional prerogatives?

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