It's all about the batteries

The electric car has been around for some time now, going back to GM’s EV1 in the mid-90’s.  All the major auto manufacturers have a version of an electric car or hybrid.  Why then are GM and Tesla Motors beginning to wage a battle over electric cars?  It’s the batteries. 

I had the opportunity to see an EV1 up close and personnel.  Other than the lack of noise, the thing that struck me most was the size of the batteries.  Even then, I could see this car was not going to be embraced by the commercial market due to these batteries and the economic principle of a substitute good.

Let us start by going back to the late 19^th and early 20^th century where the saying was, “Coal is King.”  Looking back 100 years, this seems like an odd saying; but at the time coal powered industry, homes and shipping.  Then some changes started to take place.  The automobile was invented.  For decades this was not much of a problem for coal, until Henry Ford brought cars to the masses and demand for gasoline increased.  In the early days, individuals would get their gasoline from the hardware store.  A fragmented, inefficient industry, John D. Rockefeller saw an opportunity.  He was a driving force in developing the infrastructure to decrease the costs of oil extraction and gasoline refinement, and then distribute gasoline to all of Mr. Ford’s customers.  With demand going up, and production costs coming down, oil ascends and coal is no longer king.  After the completion of the interstate highway system (more infrastructure) oil’s dominance is complete.

This is the resource electric cars are trying to displace.  Two events must occur for this to happen, and are the reason electric cars have not been embraced by the commercial market even with close to two decades of expending Government and industry resources. 

First, costs must go down.  Key here for batteries is the ability to efficiently store energy.  Electricity does not have much of a shelf life.  As a correlation, power plants spend a significant amount of time and money to match demand; too little demand, and electricity is wasted.  The current batteries for electric cars are both inefficient and costly.  An intrinsic cost is the investment in time by the consumer.  Not only did the batteries for the EV1 fill the entire trunk and under the back seats, they took an excessive amount of time to charge.   Simply put, electric cars will not take over their gasoline driven brethren until batteries are more efficient and less costly.

Second, there must be an infrastructure.  Cars existed for decades without much traction in the commercial market.  Mr. Ford’s production line and Mr. Rockefeller’s efforts to develop a distribution system led to increased car sales, which then led to increased gasoline sales; until the point where we have gas stations on each corner in some cities.  For electric cars to be embraced by the commercial market, there has to be an infrastructure.  This too must overcome a major concern for safety: What if the battery dies and I am too far from home or anywhere else to charge my car?  I can bring gas to the car, but how do I bring electricity?  With that, the infrastructure must account for the time to charge the batteries.  Mr. Musk of Tesla Motors intends to offer long and short charging (with the short coming at a modest fee).

Without serious improvements to batteries and the infrastructure to charge them, proponents of electric cars are just spinning their wheels.