Probably more like OILLLLLL = Profits than cost, safety, etc. Why would they spend a fortune on developing something which would be in direct competition to 99.99999999% of their othre products which (at the time) was doing so well?
It's probably correct that they "used" the EV1 project in order to discredit the very idea of leccy cars. So people would rather buy their gas guzzlers. Notice how many "enlarged" GM models came out after EV1 was caned?