A comparison between the price of cars at the start of the 20th century and the price of EVs today shows another advantage in electricity’s favor: the average car in 1900 cost nearly twice the typical household income, while the average base price of the top three EVs on the market today — Nissan Motor Co., Ltd. (ADR) (OTCBB:NSANY)‘s Leaf, Tesla Motors Inc (NASDAQ:TSLA)’s Model S, and General Motors Company (NYSE:GM)‘ Chevrolet Volt — is about 90% of the median national income.
However, EVs have a hurdle that the motor wagons didn’t — the competition is already mechanical, and it has a century-plus head start. The earliest autos simply had to be better than a horse, which is limited by biology to a certain speed and a certain work capacity. A horse doesn’t have an R&D budget or an assembly line, and you have to clean up after it, which is pretty gross. Its obsolescence was inevitable. EVs have to beat a competitor that’s benefited from tens of billions of dollars in global research and development spending each year for decades , and which is a significant part of a worldwide oil-and-manufacturing infrastructure that creates trillions of dollars in annual revenue.
EVs have to overcome an entrenched culture, just as early motor wagons did — but today’s car culture is far more deeply embedded in the national psyche than horses ever were. There’s one automobile on American roads for every 2.3 Americans today, compared with one horse for every 3.5 Americans in 1900. The average person traveled about 340 miles per year in 1900, compared with 16,000 miles per year in cars and airplanes today. Despite facing one of the most entrenched opponents in the history of capitalism, EVs are already outperforming the puttering internal-combustion pioneers in terms of market penetration, price, and infrastructure deployment at a similar point after introduction.
Let’s sum some of that up visually:
Autos vs. EVs: a Comparison | Infographics
Hard to hold a charge
Of course, with all of that said, we come back to perhaps the biggest roadblock between EVs and mass adoption: Battery technology just isn’t as good as gas. “A full tank of gasoline,” according to American Physical Society Fellow Alfred Schlachter, “contains as much energy as 1,000 sticks of dynamite.” It’s accessible, portable, and (despite protestations over $5 gallons of gas) quite affordable. The New York Times‘ Green blog quoted International Business Machines Corp. (NYSE:IBM) battery researcher Winfried Wilcke on the charging-efficiency problem three years ago:
[Wilcke] illustrated the challenge of building a battery with the energy density of gasoline by recounting that it took 47 seconds to put 13.6 gallons of gas in his car when he stopped to fill up on the way to San Francisco. That’s delivering power at the rate of 36,000 kilowatts, he said. An electric car would need to pump 6,000 kilowatts to charge its battery in that period.
“The dream that we have today to have exactly the same car charge up in minutes and drive off hundreds of miles cannot happen,” Mr. Wilcke said. “Or at least not for 50 years.”
Schlachter points out that battery technology is not subject to Moore’s Law-like efficiency gains, because “significant improvement in battery capacity can only be made by changing to a different chemistry.” Computing hardware has improved on the same substrate by investing in miniaturization technology since the 1960s, but the energy density of a given chemical compound is essentially fixed — it’s only improvements in the surrounding machinery using that compound (whether engines or batteries) that makes more use of the same material.
However, it may not be necessary for EVs to charge in 20 seconds to make them a compelling alternative. Most people simply never drive far enough in a given day to need a quick charge — 95% of all people tracked in 2009 by the National Household Travel Survey had a commute of less than 40 miles, and the average commute was less than 14 miles. The average total daily driving of urban dwellers was 37 miles, and that of rural drivers was 49 miles. The Nissan Motor Co., Ltd. (ADR) (OTCBB:NSANY) Leaf, which is the cheapest of the three best-selling EVs on the market, can drive at least 73 miles on a single charge. Battery quick-swap stations go a long way toward solving the problem of charging delays on the other 5% of those commutes, and the high cost of batteries — widely seen as the biggest drawback to EV adoption and a roadblock to quick-swap ubiquity — is not something that will persist forever.
The lithium-ion batteries used in modern EVs have more than doubled in energy density and have declined in price per kilowatt-hour of capacity by a factor of 10 since the early 1990s, when the modern EV movement began to gestate. A McKinsey research paper published last year projects that lithium-ion batteries will continue to decline in price from roughly $600 per kWh today to about $200 per kWh in 2020. Gas prices aren’t likely to decline any time soon, so a two-thirds reduction in battery costs would make EVs a better value on balance than internal-combustion vehicles, according to the McKinsey analysis. None of this would account for another battery breakthrough that would make lithium-ion obsolete, and as the commercial impetus to sell EVs continues to gain steam, it only becomes more likely that intensified research will find something better.
Will EVs continue to outperform the original auto pioneers in the face of stiffer competition? I can’t say. However, early results are indeed more promising than many pessimistic commentators would you like to believe. Just as autos replaced horses en masse once their technological superiority was undeniable, EVs will have to be objectively better than internal-combustion vehicles to justify widespread adoption. There are bound to be some bumps and bankruptcies along the way. After all, more than 1,000 automakers of all sizes were founded between 1896 and the mid-1920s. How many of them are still around?
The article Everything You Think You Know About Electric Cars Is Wrong originally appeared on Fool.com is written by Alex Planes.
Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool recommends General Motors and Tesla Motors (NASDAQ:TSLA) and owns shares of IBM and Tesla Motors.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
