Will electric vehicles replace the internal combustion engine?

The push for electric vehicles continues, with predictions that they will dominate the market in a short time. Yet will they?

In the long run, electric vehicles will replace internal combustion vehicles. Once battery technology becomes good enough to provide a large enough range, fast charging, etc. at a lower cost than gasoline or diesel they will obviously dominate the market. But will this happen soon?

To answer this I look at two past technological changes and apply them to electric vehicles.

The automobile:

The automobile replaced an existing technology, the horse, over a period of about 20 years (1900 or so until 1920). Automobiles existed before 1900 but were more a curiosity than a real transportation option. While horses were still found in cities into the 1930s they had become relatively uncommon by the 1920s.

Why did the automobile replace the horse? Because of its advantages. Horses were expensive to keep and had to be "maintained" (fed. exercised, stalls cleaned, etc) daily. An automobile, in contrast, could be left unused for days or weeks at a time. Early cars still required a fair amount of maintenance and broke down frequently, but were still an advantage over horses. This was especially true when low priced automobiles like the Ford Model T started to be sold. By the 1920s automobiles also allowed much longer distance travel than horses.

So the automobile replaced the horse as the dominant form of land transportation in a short time based on its clear advantages to the owner.

The Compact Disc

The second product I look at is the compact disc. The CD was introduced around 1982. By 1990 CD sales exceeded vinyl record sales and went on to also replace cassette tapes a few years later.

Why did the CD replace vinyl? Longer play times, more durable, better quality, and smaller size. Price was not a large factor, CD prices continued higher than cassette prices long after CDs dominated the market.

What does this mean for electric cars?

Electric cars differ from both the original automobile and the compact disc. There's no clear economic or product advantage to the electric car. Electric cars have short ranges and long "refueling" times relative to gasoline. They have no price advantage, electric cars are relatively expensive and manufacturers apparently lose money on their sales. Because of the short range, they often need to be a "second car" used only for short local travel.

Instead, electric cars rely on two advantages. One is government subsidies, which can help offset the higher price. The other is the "feel good" factor. Electric cars are supposed to be better for the environment. So electric car sales have largely been limited to urban, wealthy, "environmentally aware" consumers as a second car.

Even so, there are predictions of the demise of the internal combustion engine in 10-20 years. How likely are these predictions to be true? Based on a comparison to other products, not very likely. Most products which rapidly take over markets do so because they have a clear advantage over existing products. This is not true of electric cars. Instead, these predictions all appear to be based on the assumption that governments will make electric cars more desirable than internal combustion engines, or alternately will legislate electric cars.

Legislative mandates are the most likely approach to electric cars taking over the market. Yet will this work? Governments have been mandating increased fuel economy for over 30 years yet fuel economy has not increased anywhere near as fast as the mandates would suggest. Instead, fuel economy standards have distorted the market, with vehicles like station wagons disappearing (because of relatively low mileage), to be replace with minivans (which were originally classed as trucks, and may still be). SUVs have steadily risen in popularity, often growing quite large, even as gas prices increase. Automobile trends lately have (at least in the United States) often gone in the opposite direction of those desired by government.

A Better Analogy

So what is a good analogy for the introduction of electric cars? Organic (and natural) foods. Organic foods have steadily gained market share, starting as a niche market at specialty "natural foods" stores, now spreading to mainstream grocery stores. While organic foods have gained market share, they continue to lag behind non-organic products, being higher priced and at times don't have as good a visual appearance as non-organics.

Why? The selling point for organic foods is they are better for you, they are more environmentally friendly, and you can feel good when you buy them. Compare this to the advantages of electric cards -- they are more environmentally friendly and you feel good buying one. And as with organic foods, so long as they are more expensive and have other disadvantages, electric cars will not replace internal combustion cars.

How electric cars will dominate

Today there is one way electric cars will dominate the market -- government mandate. The question is whether government officials can convince voters to allow the mandate to take effect.

The Trump White House Remodel

In the news the last couple days is that Donald Trump is taking a "working vacation" for a few weeks. The media, ever looking to paint Mr. Trump in a negative manner, has brought criticism of President Obama for his vacations, with Mr. Trump tweeting that he didn't take vacations. Now they're saying Mr. Trump is hypocritical.

But it turns out there's a good reason for the vacation. The West Wing of the White House is being remodeled, with everybody moved out for the next few weeks while workers fix water leaks, install new heating and air conditioning, replace carpets, paint, etc. So far the media has reported this as necessary repairs which were begun and authorized under President Obama.

But this is the Trump Presidency, so I'm making a prediction. Likely before the end of Mr. Trump's vacation and definitely within a week or two of the completion of the renovations we'll be seeing news stories describing the remodel in a negative manner and the blame will go to Donald Trump. The remodel will be too extravagant, too expensive, or crass and tasteless.

After all, the press's job lately has been to show us how bad everything has become under Donald Trump.

More on cashless tipping

In my last post I talked about proposals for a cashless society and asked how some traditional cash transactions would be affected, in particular tipping. It's easy to slip the bellhop, parking valet, or skycap a couple dollars cash. How does this work in a cashless society?

We are seeing hints of how a cashless society might handle tips in restaurants today. Restaurants are moving to fully electronic credit card transactions. Rather than print a receipt with a line for tip the restaurant uses a tablet which asks for a tip and then has you sign the charge. The receipt is then emailed or can be printed.

Something like this could be extended to other traditional tipping situations, though they are complicated by not having an open transaction to work off of. But I'll assume the technical issues can be solved.

I still see two issues with electronic tipping:

First, when I tip today I often find the recipient (parking valet, skycap, etc) does not wait for a tip. I've never had the movie scene of the bellhop stopping with a hand out for a tip. Instead, people do their job and you need to have the tip ready to hand to them "on the fly". This isn't going to work if we have to get out phones, credit cards, or other devices to tip. And having the valet or bellhop go back to holding a hand out (or perhaps a hand with a credit card reader in it) for a tip is not going to be popular.

I see the second issue in the way current electronic tip systems are designed. With a paper credit card receipt there are blank spaces for a tip and a total. Suggested tip amounts (often 15, 18, and 20 percent) might be printed at the bottom of the slip for those who can't do percentages in their head.

The electronic tablet systems I've seen instead pop up one or more suggested tip amounts along with an "enter a different amount" button. Giving one of the suggested tips is easiest, just tap the proper button. Giving a different tip is much more difficult. The result is the amount of a tip is now under the control of the person receiving the tip rather than the person giving it. Imagine a tablet / phone system to tip a valet. You might currently tip a couple dollars for a valet. What happens if the valet's tip screen has "$5", "$10", and "other". Do you select "other" to do your usual $2 tip or do you just hit the $5 button?

Fifty years ago I was told that a restaurant tip is 10-15% (more for higher class restaurants). Over time tip amounts seem to have grown, with 15% being a universal norm and many restaurants pushing 20% or even 25%. Precomputed electronic tips will make it easy for the industry to raise the socially acceptable tip amount.

Tipping is, of course, a difficult issue. On the one hand it's supposed to be a gift for good service. But on the other hand many workers depend on tips, only being paid a small wage or even no wage other than tips.

Or perhaps with the $15.00 minimum wage and other "living wage" moves it's time we abolish the idea of tipping and just pay a fixed wage with no tipping allowed.