The Opportunity in Autos

The White House is at this moment trying to save America's auto industry and the tens of thousands of jobs that depend on it. Although nobody knows what the bailout is expected to cost, it's going to be huge—on the order of $100 billion. Spending this kind of money on a salvage operation will not work: business as usual will ultimately result in failure as usual. Incremental technological improvements will not help because foreign competitors will simply match them, as they have been doing for decades.

Instead, the $100 billion should be used in a bold move to transform the auto industry. What's needed is a big push, similar to the Manhattan and Apollo projects, to turn the U.S. auto industry into a world leader in electric cars and sustainable vehicles, and set the stage for a phasing out of internal-combustion-engine cars.

Fifty years ago we were engaged in a space race with the Soviet Union. Today perhaps we are embarking on a "car race" with the Chinese and other industrial powers—a race to be the first to perfect Car 2.0. According to recent press reports, China is pushing electric and green vehicles, with the goal of overtaking carmakers overseas and dominating the global market.

The four-year Manhattan Project, begun in 1942, cost "merely" $25 billion in 2009 dollars, but with that funding, the nation developed the first atomic bomb. Project Apollo, begun with President John F. Kennedy's 1961 speech, cost a total of $125 billion (in today's dollars) over 10 years. During both of these efforts we invented important technology we didn't even know to ask for.

With this much funding, it should be possible to trigger the innovation and economies of scale to drive the price of electric cars below that of internal-combustion cars. Electric cars would be cheaper to buy and much cheaper to operate—especially when oil prices rise again, as they inevitably will. The United States wouldn't be held hostage to high fossil-fuel prices. This would strengthen the economy by arresting the massive continuing flow of oil funds offshore, which would amount to an ongoing economic stimulus. And a clean car would find exports around the world.

It's not really that difficult to make the really useful, affordable, desirable electric cars that people worldwide yearn for. The U.S. already has good electric cars. The greatest challenge to universal desirability may be the battery: we need to improve price, range, power and refueling time. The next generation of batteries must be cheaper, more powerful, quicker charging. This is a challenge, but incredibly easier than inventing, from scratch, atomic power or manned space flight.

Even without advanced batteries, it's possible to move forward. Strategies such as battery-swapping stations overcome perceived range and charging-time constraints. Batteries could be charged directly at generation plants during off-peak times and physically distributing them to local swapping stations (gasoline is often shipped halfway around the world). Or privately generated solar or wind can charge vehicle batteries.