There is a tremendous amount of interest and activity surrounding electrical vehicles (EVs) right now, and for good reason. You can hear anything you want about what is going to happen, from we will all be driving Teslas in five years to this whole EV thing is a stupid use of energy and it will eventually all go away. So, what do tractors and horses have to do with EVs?
Before I answer that question, I should say that I am a firm believer that EVs are going to eventually replace internal combustion vehicles. I don’t believe that subsidies or government policies will be the primary reason, but they certainly will contribute. Instead, I think EVs will be favored by consumers because they will simply be better products. People I know love driving them and they are so much simpler that internal combustion vehicles. Yes, I know they have a list of problems right now, but I think these will be solved in the next 10-15 years. This is what conditions my long-term perspective.
The big question in my mind is how long the transition to EVs will take. Here is where tractors and horses come in. Aaron Smith of UC Davis recently shared the chart below in a recent blog post. It shows that tractor power in the US did not surpass horse power until 1945 at the end of WWII. Think about that. During WWII, US agriculture was still more horse powered than tractor powered. Millions of horses were still being used in US agriculture in the 1950s!
The key is that huge technological transitions like horses to tractors take a very, very long time. The adjustments are just too big to happen quickly. It takes time to fully develop the new technology and depreciate out the old. This is the lesson when thinking about the coming transition from internal combustion (ICE) cars to EVs. The transition will happen, but it will take decades not years. In 40 years, if the number of ICE and EV cars are plotted, I think it will have a similar S-shape as we saw for horses and tractors. It could be somewhat faster or slower, but I think it is a useful benchmark.
Here is the link to Aaron’s post
Are Robots Going to Steal our Jobs? – by Aaron Smith (substack.com)