Matt Yglesias, among others points out that batteries are a stumbling block to full scale electric vehicles

This is bad news for the world. If you look at the mobile computing space, precisely the area in which you don’t see breathtaking innovation is this battery stuff. We’re just not getting better at the basic physics of storing electricity in a reasonably compact way. Battery life for things like smartphones and laptops has improved, but that’s all coming as improved efficiency of the chipsets. But here, too, the basic physics of translating engine power into forward automobile motion are not amenable to enormous improvements.

I actually think there is a lot more room to radically improve the economic here.

The way cars work now is that

  1. People generally own the car that they use for transportation
  2. Most cars are idle most of the time

 

These two things are massively inefficient and contribute to an enormous capital expense for driving. The reason we do this is two fold. One the operating expenses for cars are really high – both in terms of fuel and the drivers mental capacity -  so the capital expense is not as big of deal. Two, convince is a big deal.

Luckily we have the confluence of several techs that are potentially game changers here.

First, are driverless cars or autonomous vehicles (AVs) as I prefer to call them.  This radically cuts down on the amount of attention that someone has to devote to driving and so the operating expense goes down.

Second, is cheap electricity. Currently electricity is already pretty cheap compared to oil. It will probably get cheaper in America in the near term as a a result of the natural gas boom and a reduction in the cost of combined cycle generators. In theory you can make one small enough to fit your house, which means gains from mass production.

Over the long run Photovoltaics are the likely source of very cheap power. Lets leave the discussion of how the energy will be stored/distributed for later.

So, that’s a reduction in the fuel costs.

Third, smartphones would allow us to order a AV to our exact location, pay for it and have it drop us off. Further we can order exactly the AV we want. Many seats or few. Lots of storage or little. Fancy or basic. Consumer comfort or a rolling business office, etc.

Lots more convenience.

All of these factors together mean that there is now enormous pressure to get more out of the capital and luckily there is an easy way – battery swapping.

I imagine that most AVs might have a small internal battery for cruising around the home station, but in general the AV will pickup the battery it needs for the job that it has been tasked to do. This means that batteries will always either be charging or in use.

Even at night, when most humans are asleep the batteries can be swapped in to delivery vehicles. This means the battery is in constant use which means that its use is amortized over a much shorter period of time and the cost of capital is much less.

Getting from where we are today to this world is a challenge but it is one of the advantages of lots of rich countries. Someone – probably the South Koreans – will go for this system first. Then folks will look in awe and want it for themselves.

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