Freakonomics Radio XX
[0] I'm sure you know what's going on with gas prices lately.
[1] You don't need us to play you some cliched news clip.
[2] But here's one anyway.
[3] Let's turn to those skyrocketing gas prices that are crushing so many American families.
[4] As of this recording, the average price of a gallon of gas in the U .S. is well over $4, up roughly 50 % from last year.
[5] And in some places like California, it's much more expensive than that.
[6] We have seen prices surge nearly 49 cents just in the past week or so.
[7] Gas prices had already been rising and then came the Russian invasion of Ukraine.
[8] We're banning all imports of Russian oil and gas.
[9] Now, keep in mind that gas still costs less in the U .S. than it does in most other rich countries.
[10] And it's been that way for a long time.
[11] That's one reason people in those countries tend to drive smaller cars and we tend to drive SUVs and pickup trucks.
[12] Still, the recent spike in gas prices here has been unsettling.
[13] and for some people, disastrous.
[14] It has been said that necessity is the mother of invention, but disaster may be an even bigger mother.
[15] I think disasters can spur people to try new approaches, and we see this adoption of new technologies often picks up in recessions and other crises, because people are willing to try new things.
[16] That is Tom Standage.
[17] Long ago, he studied engineering and computer science at Oxford, and then he became a journalist.
[18] He's a deputy editor at The Economist, and he's written several books about the history of technology.
[19] His latest is called A Brief History of Motion, from the wheel to the car to what comes next.
[20] We thought it would be worth hearing from Tom Standage today because one new technology he's very excited about, and one that's being hastened by those disastrously high gas prices, is the electric car.
[21] As of now, fewer than 1 % of all cars in the U .S. are.
[22] Electric.
[23] The best -known brand is Tesla.
[24] Even better known is Tesla's CEO, Elon Musk.
[25] We have a difference of opinion in my household.
[26] We had dinner with Elon and his mother a few years ago, and my wife took a violent dislike to him.
[27] And so it's the kind of classic example of, like, women hate Elon Musk and just think he's a massive asshole.
[28] And basically, guys who are into technology like me just think he's great and think he's a world historical figure.
[29] Elon Musk may well be a world historical figure, but the actual history of the electric car is more complicated than most people know.
[30] Tesla sold its first vehicle in 2008.
[31] They started with a super fast, insane sports car, the roadster.
[32] But did you know that the electric car goes back to the invention of the automobile itself?
[33] In fact, in 1897, the best -selling vehicle is an electric car.
[34] Today on Freakonomics Radio, why did the best -selling vehicle of 1897 disappear for more than a century?
[35] What would the world look like today?
[36] if electric cars hadn't had such a massive false start and what other technologies have been lost to time?
[37] We'll get into all that right after this.
[38] Is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner?
[39] If you want to tell the story of the electric car, a good year to start is around 1890.
[40] And the fastest growing cities in the West of world have a problem.
[41] That, again, is the technology.
[42] historian Tom Standage.
[43] And what is the problem these big cities have?
[44] Horse manure is piling up.
[45] That's right.
[46] Horse manure.
[47] You may remember this story from superfreakonomics, where we told it in some detail, perhaps too much detail.
[48] Anyway, cities like London in New York, the population of horses is growing faster than the population of people.
[49] Their horses are being used for horse -drawn carriages, but also to move goods around the city.
[50] Horses were used in manufacturing as well.
[51] So many horses.
[52] But what about railways?
[53] Didn't they alleviate some pressure on all that horse transportation?
[54] In fact, railways make it worse because the easier it is to move goods and people between cities, the more demand there is to move people around within cities.
[55] And so very often the railway companies are the biggest owners of fleets of horse -drawn vehicles.
[56] New York, at the time, had some 200 ,000 horses, each one producing about 24 pounds of manure a day.
[57] The other thing that's happened is that previously you used to be able to sell the horse manure that was piling up on the streets.
[58] That is, sell the manure to farmers in the surrounding areas as fertilizer.
[59] But with so many horses in big cities, there came to be a horse manure glut.
[60] The amount of horse manure is so large that the price collapses.
[61] Nobody wants it.
[62] These big cities couldn't live without the horse, but nor could they live with the horse's waste.
[63] It clogged the streets.
[64] It was smelly and disgusting.
[65] and it was a public health hazard.
[66] And so it's becoming apparent in the 1890s that the dependence of urban transport on the horse is unsustainable and something has to change.
[67] One change came in the form of the bicycle.
[68] There was this big boom in bicycles in the 1890s because they granted people an enormous amount of freedom.
[69] But where would the bicycles ride?
[70] Most roadways were the domain of horses and carriages, even in a place like Central Park.
[71] There was a fight over this, and it was eventually established that actually bicycles were allowed to go over bridges in Central Park.
[72] So that set the precedent that roads weren't just for horses and carriages, that other new vehicles were entitled to use them.
[73] The bicycle boom led many cities to cover their dusty, muddy roadways with pavement, quite literally paving the way for the next vehicle, what was called a horseless carriage.
[74] By the time you get to the 1890s, it's possible to build essentially a large tricycle and put an internal combustion engine in it.
[75] and this is what Carl Benz does.
[76] Carl Benz, as in the company Daimler -Benz, which eventually owned Mercedes -Benz.
[77] We recognize that as the first automobile now, because he's not simply putting an engine into an existing carriage.
[78] He's custom -building a new kind of vehicle.
[79] What happens next is a scramble to develop the most efficient version of the horseless carriage.
[80] There were three technologies vying for supremacy.
[81] You've got the steam -powered ones, and the great thing about those is you can slot them in is a direct replacement for the horse.
[82] So you buy a steam tractor and you have that pull your carriage around instead of a horse.
[83] Steam engines had by now been around for some time.
[84] They were very good at pulling railroad trains, but for automobiles, they had some obvious flaws.
[85] They're really big, they're really heavy.
[86] They tear up the roads.
[87] You have to start the boiler a couple of hours before you want to go out.
[88] I mean, it's just really not practical, right?
[89] Okay, so the steam engine automobile isn't going to happen.
[90] What's next?
[91] These new things based on internal combustion engines.
[92] combustion engines that are fueled by what we now know as gasoline.
[93] It was called Ligroyne at the time.
[94] Essentially, it was sold as a cleaning fluid.
[95] In fact, funnily enough, at the time, if you were in the oil business, the main thing you were making was kerosene for lighting.
[96] That was the main product of the oil industry.
[97] Kerosene itself was a replacement for the previous generation of lighting fuel, which was whale oil.
[98] So goes the circle of time and technology.
[99] And the gasoline that came out as a side product of that process was literally thrown away.
[100] It would be thrown on the ground to evaporate, or it would be dumped in rivers, and this would mean that the rivers would sometimes catch fire.
[101] But now, the gasoline could be burned as fuel in these new internal combustion engines.
[102] So you've got those cars, you've got steam -powered cars, and then you've got electric cars.
[103] And in fact, in 1897, the best -selling vehicle is an electric car.
[104] So it really is neck -and -neck at that point.
[105] Electricity itself had by now already begun to change civilization.
[106] cities were lighting their streets and buildings with the electric light bulbs that made Thomas Edison a household name.
[107] Electric streetcars were thriving.
[108] But in all those cases, the electricity was carried by hardwiring.
[109] The buildings and streets were stationary, as were the tracks that streetcars traveled on.
[110] This wouldn't work for an automobile.
[111] The whole point was that you could go wherever you wanted.
[112] So an electric vehicle would require a battery.
[113] And what sort of battery did these early electric vehicles use?
[114] The batteries are lead -acid batteries.
[115] They're big, they're heavy, they don't store much energy, they take a long time to recharge.
[116] Still, we should say here that new technologies are rarely perfect out of the box.
[117] In fact, many new technologies are seen by the majority of people as ludicrous, dangerous, the province of hustlers and con artists.
[118] Think about how most people see blockchain technology today.
[119] Will that change in 10 or 20 years?
[120] I'm guessing, and it is just a guess, but I'm guessing the answer is yes, and that early skepticism will be forgotten.
[121] As for the beginning of the automobile era, there was cause for skepticism.
[122] The gasoline cars at this point are really quite unreliable.
[123] You have to hand -crank them to start them.
[124] They're breaking down all the time.
[125] They produce lots of soot and lots of grease.
[126] And when you buy a car in this period, you get a full set of tools to maintain it.
[127] you were expected to be the mechanic.
[128] And so they essentially are regarded as play things for the rich.
[129] The electric cars, meanwhile.
[130] The electric cars are much, much simpler.
[131] The number of pieces in the drive chain of an electric car is 30 or something, as opposed to 5 ,000 in a gasoline car.
[132] So they're much, much simpler.
[133] Electric and gasoline cars had other significant differences, including what Tom Standage calls the gendering of these vehicles.
[134] Electric cars are sold to women because they're assumed to be not strong enough to hand -crank.
[135] the petrol cars.
[136] They're assumed to be bad at mechanics, because obviously that's a manly thing to do.
[137] And they're also assumed to be not interested in performance, because the gasoline cars have much better performance.
[138] It could go faster.
[139] They can go further and so on.
[140] And then at the same time, men who are buying cars for their wives probably quite like the idea of an electric car that limits how far they can go and limits the freedom that this grants them.
[141] And so you get this idea that electric cars are kind of weak and girly, and gasoline cars are powerful and manly.
[142] Electric cars did have what looked to be an advantage.
[143] however, a plan to build a network of them.
[144] There was a bunch of people who had made a lot of money in electric streetcars in US cities.
[145] So they said, well, why don't we essentially extend our monopoly?
[146] We will build fleets of electric taxi cabs, and they will take people from the ends of the streetcar lines to where they want to go.
[147] Their plan was to launch essentially these kind of electric ubers in New York and other cities.
[148] Again, keep in mind, this is the 1890s.
[149] They wanted to go around the world as well, and the idea was that they would then have this monopoly of electric transport, and people would not need to own their own cars.
[150] The firm behind this plan was called the Electric Vehicle Company.
[151] It raised lots of money.
[152] It wasn't spending it very well.
[153] It wasn't expanding into new cities very well.
[154] And then it turned out that it was making claims that weren't supported about what technology could do.
[155] So it was a sort of Theranos sort of situation.
[156] The whole thing collapsed.
[157] People lost confidence in it.
[158] And that really dented people's enthusiasm and opinion of electric vehicles.
[159] People are saying this is basically done for the electric car.
[160] That's really interesting.
[161] And it suggests that many technologies from the past that didn't catch on.
[162] It may have not just been a failure of the technology itself, but the way that that technology intersected with the financial prospects and even financial propriety.
[163] Is that the case?
[164] I think so.
[165] You have to have actual demand for the product, but then you also have to have a business model that can align what the technology can do with what society wants.
[166] Now, to be fair, it wasn't only the business business.
[167] model that doomed the electric car.
[168] The technology itself wasn't ready.
[169] The problem is the batteries.
[170] The batteries just aren't very good.
[171] You can buy an electric car that maybe goes 80 miles.
[172] But as time went on and as gas -powered cars became dominant, the concept of an electric car remained enticing, even to Henry Ford, who had become famous for inventing the Model T, one of the first mass -produced cars.
[173] The Model T has been a big success and people started to worry about running out of oil, even in the 1920s.
[174] They're worried about dependency.
[175] Ford entered a collaboration with none other than Thomas Edison, the king of electricity and holder of more than a thousand patents.
[176] One of the things that they try to do is new battery technologies.
[177] Edison comes up with a different battery chemistry, and it just doesn't work.
[178] These are two of the greatest minds in automotive technological history, and they can't solve the problem.
[179] So electric cars just still have this reputation of being rubbish.
[180] And so it was that the internal combustion engine completely won out.
[181] Its success reshaped the way we live, not quite as fundamentally as electricity, perhaps, but in some ways even more radically, the gas -powered car created a level of personal mobility and autonomy that seemed magical.
[182] There were, of course, downsides.
[183] To this day, there are more than a million deaths globally from car crashes.
[184] Many wars have been fought over access to oil and gasoline.
[185] It feels like half of all U .S. foreign policy has been driven by oil.
[186] And of course, those gas -powered cars have been major polluters.
[187] They generate toxins that contribute to human illness and death, and carbon dioxide that contributes to climate change.
[188] But if you went back in time to the invention of the gas -powered automobile, you would see that it was hailed as an environmental savior because it rescued us from being literally buried in horse manure.
[189] But now we know that the claim of environmental savior was overstated.
[190] The electric vehicle, meanwhile, remained offstage for decades.
[191] Yes, there were countless inventors in countless garages and labs trying to make it work, but mostly it didn't.
[192] Until the 1980s, that's when General Motors began prototyping mass -produced electric vehicles.
[193] And in the 1990s, they brought one to market.
[194] It was called the EV -1.
[195] How does it go without gas and air?
[196] How does it go without sparks and explosions?
[197] The EV -1 has a sort of iconic role in the history of electric cars.
[198] And then you will ask, how did we go so long without it?
[199] The future, it seemed, had finally arrived.
[200] The electric car.
[201] It isn't coming.
[202] It's here.
[203] But once again, it wasn't.
[204] quite here.
[205] The batteries were still rubbish, and GM didn't want to sell them, so it just leased them, and it leased them to people in California.
[206] And it's a beautiful design of a car.
[207] It's very, very aerodynamically efficient.
[208] GM did lease the EV -1 in a few other places, but California was the hotspot.
[209] Why?
[210] There were three good reasons.
[211] The California weather was neither too hot nor too cold, which was good for the batteries.
[212] California had recently passed extremely strict emission standards, and California had the right kind of drivers to get behind an electric vehicle.
[213] They've basically got a whole load of very evangelical, ecologically minded techno nerds in California who have leased these cars and absolutely love them, and are prepared to look past their failings, which are that, you know, they haven't got very good range and they take quite a long time to charge.
[214] GM leased around 1 ,000 EV -1s to drivers in California.
[215] The project was considered a success, but not long after, GM pulled the plug.
[216] The way this is usually told is that the oil companies and GM decided that this was bad.
[217] Bad, standage means, for a company that made gas -powered cars to be pushing electric vehicles.
[218] And I don't think it's as simple as that.
[219] I know it's very easy to villainize them.
[220] But essentially, the main problem was that the more you talk about how virtuous the electric car is, by extension, you're talking about how unvirtuous all the other vehicles you're selling are.
[221] And GM just realized that wasn't a good look.
[222] Also, they could see the EV -1 wasn't a mass audience vehicle.
[223] The technology genuinely wasn't there yet.
[224] So they ended the program and they recalled these vehicles which were, as I say, not owned by the drivers but leased to them.
[225] And they literally took them away and crushed them.
[226] People like held funerals for them.
[227] People were really attached to these cars.
[228] Today there is a feeling of loss as we unplug the EV1.
[229] Coming up after the break, what brought the electric vehicle back from the dead?
[230] And just how disrupt will an electric future be?
[231] I think this is a transition that's actually going to happen faster than people think it is.
[232] You're listening to Free Economics Radio.
[233] I'm Stephen Dubner.
[234] This is our 498th episode.
[235] If you like round numbers, like 500, help us celebrate by leaving a review or rating on your podcast app.
[236] It really helps new listeners find the show.
[237] We'll be right back.
[238] The electric car is increasingly looking like the car of the future, but it's also worth pondering why it's.
[239] had such a massive false start more than 100 years ago.
[240] Let's take a quick detour and investigate the notion of a false start generally.
[241] What do you think when you hear that phrase?
[242] It's usually associated with someone competing in a race, a running race, or a bike race, or a swimming race, or maybe someone who does all three, like Kevin McDowell.
[243] I'm a professional triathlete.
[244] And the triathlon, in case you don't know, a triathlon consists of three sports.
[245] It's swim, bike, run, and you do it all in a row, so there's no stopping.
[246] Kevin McDowell represented the United States in the Summer Olympics held in Tokyo in 2021.
[247] The triathlons started like this.
[248] They're off and swimming.
[249] But only about half the athletes had jumped in the water.
[250] They've gone well, drama of plenty.
[251] Always before every race, a boat goes in front of you on the start line to get a pin view of the entire starting line of all the people in the race.
[252] And the boats going across, all of a sudden I hear the final words that we're about to start, and the boat is literally like to the right of me. McDowell had to decide.
[253] Should he stay on the platform, even though some of the other competitors had already started?
[254] I was like, oh my gosh, the Olympics are over.
[255] Like, they're gone.
[256] Or should he jump head first into the rudder of a boat?
[257] That may sound like an easy decision, but McDowell had Olympic levels of a job.
[258] adrenaline pumping through him.
[259] I almost fall in because it's like you have that momentum to jump.
[260] McDowell was able to hold himself back, and fortunately for him, the swimmers who jumped in early got called back, and the race was declared to have had a false start.
[261] For Kevin McDowell, this was just one false start in a long series of them en route to the Olympics.
[262] He had been well on his way to competing in the 2016 Olympics, but he was diagnosed with Hodgkin's lymphoma.
[263] He quit athletics entirely for a time, but after getting through that cancer, he started training again.
[264] Come 2020, I'm like, I'm going to make this Olympic team.
[265] Then COVID hits.
[266] COVID brought another false start as the Tokyo Games were delayed for a year, which meant an extra year of intense training for the triathlon.
[267] But once Tokyo finally came around, and once the triathlon officially started, after that boat got out of the way, Kevin McDowell got his chance, he came in sixth place in the men's triathlon, the best any American had ever finished.
[268] Building on that confidence, he was part of the U .S. mixed relay triathlon team that a few days later won a silver medal.
[269] There were many times I just didn't even think it would happen, so it was a pretty surreal experience.
[270] A surreal experience would probably describe many of the false starts throughout history, moments from some technology or ideas.
[271] or invention seemed about to break through and then for whatever reason fizzled out.
[272] You could think of the ancient Roman and Greek civilizations as a false start, a flowering of science and innovation that must have looked to be permanent but then essentially stalled out.
[273] We slipped into the dark ages for some long centuries, our forward progress pretty much lying dormant until the Renaissance.
[274] But even the modern era is full of countless false starts, promising ideas or technologies that bubble to the surface and then fall away.
[275] Some time ago, we spoke with Tal Zaks, the chief scientific officer of a biotechnology firm.
[276] He was telling us about a process that scientists had been working on since the 1970s, but so far had not produced a single successful medical treatment.
[277] His firm was now trying to leverage this process to fight a virus.
[278] And what does this process do?
[279] What it does is it, as a actually takes the instruction sets for part of the virus, the protein that the virus uses to attach itself to cells, and it encodes them in this messenger RNA so that when we inject the vaccine into somebody's arm, it actually causes that person's own body to make that protein, just that piece of the virus, so that the immune system can get educated, can get immunized against that piece of the virus.
[280] This virus, you may have guessed by now, was the novel coronavirus that causes COVID -19.
[281] The company Talzac's worked for is Moderna.
[282] As stunning as the rapid success of the Moderna and other mRNA vaccines was, the fact is that several scientists had been working on MRNA technologies for decades, including Robert Langer, one of the founders of Moderna.
[283] Here's what Talzac's told us back in 2020.
[284] I think what we have done uniquely is leverage a decade of engineering and science on top of medicine to sort of break the riddle of how to get an MRNA to make enough protein.
[285] It took COVID -19 to concentrate enough attention and resources onto this technology to make it viable.
[286] Now that it is viable, we'll probably see MRNA technology applied to many other vaccines, malaria, tuberculosis, HIV, as well as cancers, autoimmune diseases, and who knows how many other illnesses.
[287] I think a very common trope in the history of technology is that it takes decades to create an overnight success.
[288] That, again, is Tom Standage, who writes about the history of technology.
[289] MRNA vaccines obviously have appeared in the past year, and some people are suspicious of them because, you know, it's taken so little time to develop them.
[290] But actually, the work has been going on since the 1970s.
[291] And then another example, which also goes back to the 60s and 70s, is artificial intelligence.
[292] where, again, it suddenly started working in the past decade, and that's because a particular approach to it, neural networks, really, really works with modern graphics processing chips borrowed from the video gaming industry.
[293] So in each of those cases, you've got 50 years to get to what looks like an overnight success.
[294] And I think that's a very common way that technology works.
[295] There's a particular goal people want to achieve.
[296] Maybe the technology is not ready, but there are enough people toiling away that when the conditions change, the technology improves the demand for whatever it is, materializes that it all comes together.
[297] Standage also makes a distinction between invention and adoption.
[298] Invention is a scientific process.
[299] Adoption can be incredibly unscientific, driven by social appetites as well as what's called path dependence.
[300] Once a given path or process has been established, it can be hard to tempt people onto a new path, even if it's better.
[301] Things take off when there is demand for whatever it is that they provide from society.
[302] So you've got technology push where technologists are saying, this is really cool.
[303] You should all buy 3D TVs.
[304] And you've got a society pull where society says, you know what, we don't actually want 3D TVs.
[305] But there are other things that society says, actually, we'll take this.
[306] So it seems like the entire globe pretty much from governments to auto manufacturers to consumers slowly but surely maybe have finally embraced an electric vehicle future.
[307] Are you surprised it took this long?
[308] Well, not really.
[309] It's only possible because the battery technology has moved on.
[310] And the battery technology moved on not because of the cars and the car industry.
[311] The battery technology moved on because of smartphones.
[312] And in fact, before that laptop.
[313] So if you look at the emergence of the lithium iron battery, funnily enough, the first work on it that really started making progress is done at Exxon in the 1970s.
[314] But then it doesn't really go anywhere.
[315] And the batteries have nasty habit of exploding.
[316] So they got out of it.
[317] And then it's really in the late 80s and early 90s that a couple of other breakthroughs are made to make lithium iron batteries.
[318] possible.
[319] And Sony launches the first commercial lithium -ion battery in order to make camcorders.
[320] Remember those?
[321] So handheld video cameras are using tape.
[322] And then you start to see the same battery being used in laptops because obviously you can pack more energy into a smaller space, so you can have a smaller lighter laptop.
[323] And it's when those batteries become available that a couple of electric car enthusiasts in California, they realize that if they buy 7 ,000 camcorder batteries and put them in the car instead of their lead acid batteries, that the car will be lighter and it will also have more energy stored because lithium iron is just so much more efficient than lead acid.
[324] So that means it will have better range and better acceleration at the same time.
[325] And so they build this crazy car called the T -Zero and Martin Eberhard and Elon Musk see it and go, oh my God, this is amazing.
[326] Can we license your technology?
[327] And that's how Tesla has started.
[328] The reason that Elon Musk succeeds where Thomas Edison fails is because the battery technology has moved on.
[329] And suddenly there is a viable technology that can give you a high -performance long -distance electric car, which just didn't exist even 10 years earlier.
[330] So I guess what puzzles me is why the incentive for the automakers wasn't strong enough for them to develop the lithium ion or another battery earlier.
[331] Because if you make a product that relies on an external fuel, in this case gasoline, and the cost of gasoline was rising geopolitically, it was complicated, et cetera, et cetera, there was pollution and climate change and so on, I would have thought that the incumbents would have had a fairly strong incentive to be the innovators.
[332] And in this case, they essentially weren't, and the development of the battery that finally made it possible for even the incumbents to convert didn't come from within the industry.
[333] If you look at the history of technology, is that typical that these innovations don't come from an incumbent because even if their technology is not optimal, it exists and it's very profitable and they just don't have enough incentive to change?
[334] Yeah, I think that's basically it.
[335] If you look at the car industry, the car industry has had more than a century to get very, very good at building internal combustion engines.
[336] I mean, internal combustion engines now are amazing things, right?
[337] They're this incredible combination of physics, chemistry and computing.
[338] It's a very, very refined product.
[339] I remember talking to people at Nokia when Apple unveiled the iPhone, and they said, oh, well, you know, this is hopeless because Apple doesn't have our expertise in optimizing radio chips so that they use less energy.
[340] Now, this is what Nokia and other incumbents in mobile phones had spent decades getting really, really good at, which is lengthening the battery life by making the radio chips more and more efficient.
[341] And Apple just said, well, someone else is going to figure that out.
[342] Also, Apple just said, we'll just have people plug the phone in every day.
[343] And then that will cease to be a problem.
[344] So Nokia had optimized for the wrong thing.
[345] Do you think that path dependency has gotten stronger or weaker over time?
[346] Because as technology gets more complex, I could imagine that it would get stronger.
[347] On the other hand, as technology gets more complex and as profits rise and there's more leverage in creating new technologies, I could imagine it being weaker.
[348] I think it depends which technology you've invested in.
[349] Path dependency is very much a thing in the history of transport and the history of technology.
[350] We're very reluctant to say we're going to switch.
[351] And that's why the innovation came from this startup from Tesla.
[352] Essentially big industries and car making was, you know, the biggest industry.
[353] What's good for GM is good for America and so on.
[354] They've got more sunk costs and they're going to have more.
[355] of a path dependency problem for obvious reasons.
[356] Tesla is currently worth more than a trillion dollars, way more than all the legacy U .S. automakers combined.
[357] That might seem ridiculous to some people.
[358] Tesla produces fewer than one million cars a year.
[359] General Motors alone produces more than 6 million.
[360] But Tesla's stock price, like many stock prices, represents a view of the future, what a firm will be worth based on its promise.
[361] Not long ago, we had a chance to speak with Mary Barra, the CEO of General Motors.
[362] She had just announced GM's plan to convert all their vehicles to electric in the relatively near future, and we called that episode, Is it too late for General Motors to go electric?
[363] I asked Barra how much the GM decision had been driven by Tesla's success.
[364] I think that's a piece of it, but, you know, we've been talking to customers for several years now about electric vehicles.
[365] And what they've always told us is it's got to have the right range.
[366] They start to lose range anxiety at about 300 miles of range.
[367] They needed a robust charging infrastructure.
[368] And so we've been working on that.
[369] But then they also said, the vehicle's got to fit my needs.
[370] I'm not going to compromise the functionality of the vehicle.
[371] It's been a number of things that have driven it.
[372] Because customers all along have been saying, you know, make my ease of ownership better.
[373] And I'll consider an EV.
[374] GM sold more than half a million electric vehicles last year, more than double the year before.
[375] Most other big automakers have also committed to an electric future, and the Biden administration wants half of all new car sales to be electric by 2030.
[376] Here's Tom Standage again.
[377] So I think it's reasonable to assume that by 2040, 2050, there were very, very few new internal combustion engine cars being sold.
[378] I mean, many countries have said they're not going to allow it.
[379] And some countries have even brought that date forward.
[380] And I think this is a transition that's actually going to happen faster than people think it is.
[381] That transition may happen fast, and it may not.
[382] Supply shortages have been making it hard for manufacturers to produce enough cars, and that's particularly true of electric vehicles.
[383] One example, an electric vehicle uses more than 1 ,000 microchips versus around 100 for a car with an internal combustion engine.
[384] Furthermore, a key component in the manufacture of semiconductors is neon gas, a major producer of which happens to be Ukraine.
[385] So just as demand for electric vehicles is rising, there are a variety of problems on the supply side.
[386] As a result, electric vehicles are still substantially more expensive than gas vehicles, although the overall cost of ownership can be lower since you're not buying gas and maintenance is likely cheaper.
[387] in any case, it would seem that the electric car revolution, after roughly 100 years of waiting, is finally coming to pass.
[388] So, what will be some of the downstream effects, and how can we prepare?
[389] Tom Standage points to three areas of potential disruption in an electric car future.
[390] First, the labor markets.
[391] Mechanically, they're much simpler.
[392] They have fewer moving parts.
[393] They need much less servicing.
[394] And so there are a lot of jobs that currently exist.
[395] that are associated with internal combustion engine cars that won't exist.
[396] That said, there's a whole load of new jobs that are related to electric cars.
[397] You can retrain people to build them, but then you also need people to go out and install the charging points and maintain the charging points and all that kind of stuff.
[398] And what about the impact of millions of electric vehicles, maybe billions someday, on the power grid?
[399] I'm not sure that the impact on the grid is as big as people think it is.
[400] Most cars are not used most of the time.
[401] So your car is used like 4 % of the time.
[402] We imagine that plugging in millions of cars means they're all charging all the time.
[403] They're actually not.
[404] They're mostly sitting there fully charged, right?
[405] So when you've got millions of cars plugged in that are fully charged, you could draw on that energy back into the grid.
[406] And this is called Vehicle to Infrastructure.
[407] It's a sort of smart charging system where when it's suddenly a very hot day and everyone wants to power their air conditioners, you suck the energy out of the cars that are plugged in.
[408] The amount of grid capacity you need is not as big as you might.
[409] think it is.
[410] You just need a much smarter grid.
[411] So even if you're running electric cars on a fossil fuel powered grid, you're still coming out ahead on carbon emissions.
[412] And that's because power stations burn fuel much more efficiently.
[413] They have a much higher thermal efficiency than a internal combustion engine, right?
[414] So you still come out ahead.
[415] So the climate change problem would not be as bad as it is now.
[416] Here's one more potential problem to think about.
[417] Where to source the materials used to make lithium ion batteries.
[418] One of the primary materials is cobalt.
[419] And cobalt is a material that much of it is mined in the Democratic Republic of Congo under really horrible conditions, often by children.
[420] That said, there is a huge amount of energy going into trying to make cobalt -free batteries and new battery technologies.
[421] There's a big argument going on in battery world at the moment about whether the way forward is incremental improvements to current battery technology or radically new chemistries.
[422] And we honestly don't know how it will go.
[423] As a bunch of startups pursuing one side and there's a bunch of startups pursuing the other.
[424] I think a very interesting straw in the wind here is that Tesla has started to use so -called LFP batteries and these are batteries that use iron rather than cobalt.
[425] Now they have some drawbacks, they don't work so well in cold weather, they don't have quite as good energy density, but they also have some advantages.
[426] They're cheaper and they don't use cobalt.
[427] Another way forward is there's a bunch of startups again looking at, well, maybe we can find the rare elements we need for batteries on the seabed and there's a bunch of undersea mining companies.
[428] We've seen this before in different areas with nuclear power.
[429] There was a shortage of uranium and then they found a whole load of it in Australia, so suddenly there isn't a shortage of it anymore.
[430] That's a very, very common cycle in commodities.
[431] When they become valuable, that motivates people to find them in new places.
[432] How likely do you think that the next generation of wars will be fought, if not directly, at least indirectly, over battery materials, however?
[433] Yeah, it's a nice thesis.
[434] And we have got a couple of examples of this.
[435] Bolivia is a very interesting country because it's landlocked, but it has a navy.
[436] And this is because it lost a big chunk of its territory to Chile, because of a war over minerals that we use for fertilizer.
[437] So there are a few examples of this.
[438] But I think on the other side of the scales, people have been predicting for a very long time that the next war will be fought over water.
[439] And what's really striking is how countries that really can't stand each other in lots of other areas do manage to cooperate over water, whether it's India and Pakistan, the countries around Israel.
[440] I think, you know, the next war is more like...
[441] I mean, one way we're putting it is the school of thought that chips are the new oil and Taiwan is the new Middle East.
[442] I think when the world's best chip -making technology is in an island that is disputed and sought after by China and that America has pledged to defend, I look at that and go, that's a much bigger problem, particularly because Taiwan is making the chips that Apple and Amazon and Tesla rely on for their cutting -edge technology.
[443] That looks to be like a much more likely flashpoint.
[444] Can you talk about the issue of battery disposal?
[445] Battery disposal, I think, is, again, one of those things that people like to use as a talking point against electric cars.
[446] There are ways to recycle batteries, but the other thing you can do with batteries that are no longer at peak performance, but do still work, is you can use them in grid storage.
[447] We're also at the point now where electric batteries basically started to outlast cars.
[448] We're talking about million -mile batteries now.
[449] And of course, that makes sharing of cars much more feasible because you can have a higher utilization rate of a car during the day.
[450] Obviously, if you're only using a car 4 % of the time, it's not really wearing much.
[451] If you have car sharing or autonomous car sharing or any of those sorts of sci -fi things that people like to talk about, then you could potentially have much better utilization of cars where they're being used by somebody half the time.
[452] That would mean you'd need fewer cars on the road, you need less space for parking, but it would also be the cars would wear out faster.
[453] But it's mainly the tires you have to worry about there.
[454] Let me ask you to imagine, for a moment, Tom, the counterfactual.
[455] Let's say that lithium ion batteries or some other type of battery had been developed, you know, 50, 80, even 100, 130 years ago.
[456] If electric vehicles had become dominant rather than gas vehicles, what downstream effects do you see that having had on the past century?
[457] I mean, we're talking not only transportation and energy, but given the demand for oil, we're also talking about geopolitics and war, et cetera, et cetera.
[458] I think the big question is, if we had gone with electric cars in the first decade of the 20th century, where would we have got the energy from?
[459] Because today we talk about electric cars as part of the solution to decarbonizing transport, and we say, well, we'll switch to electric vehicles and we'll power them using renewable energies.
[460] If you plugged in your electric car in 1902, that electricity was coming from a a power station that was burning oil.
[461] We're sort of conflating two things, the electrification of transport and the decarbonisation of transport.
[462] And I think you could have very easily had electric transport that was heavily carbon intensive.
[463] Now, clearly that would have made it, so you'd still have wanted oil, and America was the biggest oil producer in the world until the middle of the 20th century, and then it started relying more and more on imports.
[464] So at that point, might they have said, well, maybe we should find other sources.
[465] That's not what happened.
[466] So I think you'd have still had all of the sort of Middle East oil dependency and the resulting consequences of that politically.
[467] It's only when we start to worry about carbon emissions and decarbonization that we say, hang on a minute, we need to stop burning oil, and that includes in our cars.
[468] So to those who see electric cars as a panacea today, are they?
[469] Well, of course not, because they're a very small and easily fixed part of the climate problem.
[470] Road vehicles are about 17 % of global carbon emissions or carbon equivalent emissions.
[471] So that is, frankly, one of the easiest parts of the climate problem to fix, because we already have electric cars that work, and people are already adopting them very quickly.
[472] The hard bid is going to be decarbonizing agriculture, decarbonizing industry, steel making, cement making, etc., etc. So it's not a panacea.
[473] That doesn't mean we don't have to do it.
[474] It's necessary, but it's not sufficient, that we electrify our cars.
[475] Name for me a year or an era when you see the global auto fleet being converted primarily to electric, or maybe it's not electric, maybe it's something beyond electric even.
[476] It's interesting that you frame the question in that way, because this is exactly how people thought in the 1890s.
[477] They're looking at the horse -drawn vehicles, and they're assuming just a one -to -one substitution, every combination of a horse and a wagon gets replaced by an automobile, and that nothing else changes.
[478] And of course, everything else change, right?
[479] And I think we risk falling into the same historical trap today, which is like, we can all just go on the way things are, all we have to do is switch over to electric cars, and when are we going to do that, and then we can all just like free or side of relief.
[480] That's not how it works, and electric cars are fundamentally different things, and you can do different things with them.
[481] You can use them for grid storage.
[482] But you maybe don't need to own them because they're much, much smarter.
[483] So maybe you can call one to come to you, or maybe you can share them because you can unlock them with smartphones because they're basically computers on wheels.
[484] So I think this whole framing, which is that we just assume the world is the same, except that our internal combustion engines are electric motors, is just the wrong way of looking at it.
[485] And the history of the 20th century tells us we should not be falling into that trap.
[486] It's a good lesson, a humbling lesson.
[487] Developments that look obvious in retrospect are devilishly not obvious in the moment.
[488] Most predictions about technological breakthroughs are wrong.
[489] They fail to account for the economic and social, even psychological hurdles that come between invention and adoption.
[490] Thus, the steady supply of false starts we've seen in so many areas.
[491] And as Tom Standage makes clear, there are any number of traps to fall into when thinking our way out of a problem.
[492] Happily, there are even more smart people working in their own.
[493] their labs, in their garages, and their cubicles, trying to circumvent those traps.
[494] I, for one, am grateful to all of them, and I'm guessing you are, too.
[495] That's our show for today.
[496] Thanks so much to Tom Standage, the author of A Brief History of Motion, as well as the triathlete Kevin McDowell, General Motors CEO Mary Bara, and Talzac, the former chief medical officer at Moderna Therapeutics.
[497] Coming up next time on Freakonomics Radio, society is always telling us what's classy and what's day class A. Look how awful this is, or look how frivolous or how kitschy this is.
[498] The NBA saw the three -point shot as a gimmick, as a ridiculous gimmick.
[499] But there are a few brave souls who follow their instincts, no matter the cost.
[500] He said, I don't even know why I'm sitting here.
[501] What could I possibly learn from one guy with bagels and donuts?
[502] how embracing the day class A can lead to a whole new level of awesome.
[503] Curry has time.
[504] Three seconds.
[505] That's next time on the show.
[506] Until then, take care of yourself.
[507] And if you can, someone else, too.
[508] Freakonomics Radio is produced by Stitcher and RenBud Radio.
[509] We can be reached at Radio at Freakonomics .com.
[510] This episode was produced by Zach Lipinski, and we had help this week from Jeremy Johnston.
[511] Our staff also includes Gabriel Roth, Allison Craiglo, Greg Rippin, Ryan Kelly, Mary to Duke, Rebecca Lee Douglas, Morgan Levy, Julie Canfer, Emma Terrell, Jasmine Klinger, Eleanor Osborne, Lyric Bowditch, Jacob Clemente, and Alina Cullman.
[512] Our theme song is Mr. Fortune by The Hitchhikers.
[513] All the other music was composed by Luis Guerra.
[514] You can get the entire archive of Freakonomics Radio, 498 episodes, and counting on any podcast app.
[515] If you want to read a transcript or the show notes, go to Freakonomics .com.
[516] As always, thanks.
[517] Thank you for listening.
[518] Mary had a little lamb.
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[520] And everywhere that Mary went, the lamb was sure to go.
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