In the late 1800s, it was not yet obvious that cars were better than horses.
Automobiles were prohibitively expensive, they were unreliable, and at a time when most roads in America were made of dirt, horses had the upper hand over cars in navigating muddy and bumpy roads.
Horses were also readily available in cities, and were already supported by an entire industry of food producers, saddle shops, and clean-up crews who regularly maintained city streets.
Likewise, in the early 2000s, it was not obvious that electric vehicles were better than gas-powered ones, or even human-powered vehicles like bikes, skateboards, and scooters.
Vehicle charging networks didn’t exist, batteries were too expensive to be useful in cars and trucks, and precious metal resource constraints made the idea of a complete shift to electric vehicles look impossible.
Gas was also readily available at stations within minutes of every home in America, and an entire industry already existed to promote, service, and maintain gas powered cars and trucks.
So why did we choose cars over horses for short-haul transport? And why are people now choosing electric vehicles over gas-powered and human-powered ones?
In both cases, what pushed the disrupting technology past the incumbent was the rate of improvement. A 15-20% annual improvement in reliability, costs, or efficiency goes a long way, even if the new technology isn’t as good to start.
Around the turn of the 20th century, cars began to see dramatic improvements in efficiency, reliability, and a reduction in costs (with some help from the advent of consumer credit) as Robert Gordon explains in The Rise and Fall of American Growth:
“Three factors help explain the automobile’s rapid acceptance. First, it was viewed as a necessity by farmers and was purchased enthusiastically as soon as the Model T brought a tough and practical vehicle within the price range feasible for a farmer.
Second, the spread of automobiles in the 1920s was greatly facilitated by the development of consumer credit. By 1926, fully 75 percent of new automobiles were financed “on time”. Though installment credit had previously been sporadically available for expensive purchases such as pianos and sewing machines, the popularity of automobile credit soon made it routine for households to finance electric appliances in the same way.
But by far the most important reason for the rapid diffusion of automobile ownership through 1929 was the rapid decline in prices, an achievement largely brought about by Ford’s Model T and unmatched in any other nation.”
In contrast, horses got no less expensive, no more reliable, and no faster through the early 20th century.
It wasn’t long before they were replaced by cars, a shift Robert Gordon says happened in just over a decade:
“We have cited counts of street traffic in cities that indicate that horse-drawn vehicles were dominant in 1905 but had largely disappeared by 1917.”
Today, a similar transportation disruption is underway.
Electric vehicles are proving to be less costly, more effective ways for people to get around. However, this EV disruption isn’t just a shift from gas powered vehicles to electric ones.
Electric vehicles are also disrupting human-powered transportation. Electric bicycles, skateboards, and scooters can already go much faster and further than their human-powered counterparts without much additional cost.
Most of this disruption is due to the improved efficiency and lower costs of batteries, one of the largest costs for any EV manufacturer. In the last 10 years, lithium-ion batteries have seen dramatic cost reductions, getting 15-20% less expensive each year.
After 10 years of rapid cost reduction in batteries, we are now witnessing a cambrian explosion of electric vehicles. There are now over 500 different EVs on the roads today, up from just a handful in the early 2000s.
Along with an increase in EV manufacturers, EV adoption is also quickly improving. Electric cars already account for a majority of new car sales in markets like Norway and 3% of cars sold across the world.
With a transition to electric vehicles well underway, what does this mean for the gas industry, the auto industry, and society at large?
It’s tempting to think that electric vehicles will simply replace gas cars, and the disruption will end there. However, the automobile revolution taught us that new modes of transportation come with enormous second-order effects that go far beyond the transportation industry.
The transition from horses to automobiles didn’t just replace horses with cars. It uprooted transportation networks, permanently changed urban planning, and had wide-reaching economic effects for a world that had been designed around the horse.
As cars took over, they became the lens through which urban planners envisioned cities, and every street, store, and home (even the rural ones) were re-imagined for a car-first world.
As Robert Gordon wrote in The Rise and Fall of American Growth:
The automobile gave rural populations economic independence.
“Among the casualties of the new independence of farmers were the cross-roads general store and many small independent local banks. The smaller the town, the greater the threat to local merchants”
Farmers gained a social life.
“Social contacts were few and commonly limited within a radius of a few miles… all this has been revolutionized by motor vehicles.”
City streets were widened and surfaced with pavement.
“Horse-related merchants such as liveries and harness, carriage, and blacksmith shops were replaced by automobile showrooms or repair shops, and “horse accessories” were removed from streets, including hitching posts and watering troughs.”
Road trips became part of American culture.
“Automobiles changed the meaning of leisure time for farm families; the Sunday drive quickly developed into a rural institution, including visits to friends and the new ability to go beyond the local village for recreation, culture, church events, and shopping.”
Cities became cleaner.
“The smell of manure heaps and the clouds of flies they attracted were some of the most objectionable nuisances stables created. The nuisance was especially bad in the summer… On New York’s Liberty Street there was a manure heap 7 feet high. New York streets were often covered with layers of manure.”
“Horses… died in service, leaving 7,000 horse carcasses to be carried away each year in Chicago alone; and carried diseases transmissible to humans.”
The automobile gave Americans extra food.
“The consequences of dependence on the horse in 1870 involved negative externalities unrecognized by GDP, including… the diversion of a substantial part of agricultural production to feed the ubiquitous horses, in 1870 numbering 8.6 million, or roughly one horse for every five people”
The automobile even improved education.
“Another victim of the automobile revolution was the one-room schoolhouse, as students could now be transported by motor bus to larger consolidated school districts.”
It wasn’t just the stables and saddlemakers that had to adjust to America’s rapid automobile revolution. Everyone was affected.
Likewise, as electric (and autonomous) vehicles begin disrupting gas and human powered vehicles, they too will create widespread change in America and abroad.
Some of these changes are obvious, or are already being seen:
Others are still speculative, and it may take time to assess their impact:
This is just the tip of the iceberg. The advent of electric vehicles marks an exciting new era in transportation technology, one worth paying close attention to.
And that’s exactly why ZAP EVs was built. To share quality electric vehicle research, to review the best electric vehicles on the road, and to try and understand the impact electric vehicles are having on society before everyone else.
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