Studebaker entered into the automobile manufacturing field in 1898 when Frederick S. Fish, as chairman of the executive committee,[1]: p.66  persuaded the board to supply $4,000, or $140,862 today, for the development of an electric vehicle.

Studebaker formally began production in earnest in 1902, and the company chose battery-powered electric vehicles because they were clean, easily recharged, and worked well in urban centers without ever needing to visit a refueling depot (gas stations).

Fish realized early on that Studebaker's future did not rest in the limited electric car, but in the gasoline-powered automobile.

The joint agreement worked well until 1909-1910, when Garford attempted to divert chassis to its own brand of automobile.

Studebaker, looking for an affordable car to sell, entered into an agreement with the E-M-F Company of Detroit.