Who Makes the Cars?
n+1: Dan, I’m confused about the state of world car manufacturing.
n+1: Does every large country make its own cars?
Albert: Well, no. I mean, it depends on what you mean by large country. Cars are made all over the place. Most of them are made in China, Japan, Germany, the US—although less so in the US these days—and then Brazil and Spain and the UK, Mexico, Russia. Those are all places that make, oh, I don’t know, a million or more cars every year. And some places you wouldn’t think of, like Iran makes nearly a million cars. India makes nearly two million cars.
n+1: Who makes the most cars?
Albert: Right now the most cars are made in Japan, just about 10 million. As of 2008 China made 6.8 million; Germany, 5.5 million; the US, 3.8 million. What else is big? Brazil, 2.5 million. India, 1.8 million. But where the cars are made and who makes them are not necessarily the same thing. Just because China’s making a lot of cars doesn’t mean the Chinese are necessarily making a lot of cars, although in that case they are. By the same token, a lot of cars in the US are obviously not made by US companies. So there’s a difference between where production is and answering the question, “Who makes cars?” If that makes sense.
n+1: Just now, those numbers, what were those?
Albert: Those numbers are where the cars are made. Where they’re produced.
n+1: So in the US, there are four million cars—how large a proportion of those are Japanese cars?
Albert: Well, again it’s—you know, not to be difficult—but it’s tricky. Here, let’s look at some manufacturers. Is Toyota a Japanese car?
n+1: It’s not?
Albert: Toyota made 9.2 million cars in 2008. GM made 8.2 million. On the other hand, Toyota and GM have a plant in California where they side by side make two cars which are identical but have different names on them. Toyota’s is called the Voltz, V-O-L-T-Z, and Pontiac makes the Vibe.
And they had, and this is something people don’t generally know, Toyota and GM have had a plant in California called the NUMMI plant that has produced Toyota Corollas, and various Chevy models, since the 1980s.
What does that mean? It means that a lot of this discussion about “Does America make cars anymore?” and “How big is GM?” and so forth, is to me a little beside the point. Because the fact is, a lot of these vehicles are vehicle names more than they’re unique machines.
Albert: We started all this with you being concerned that there are too many cars being made, and does every country need its own car-making capacity? Right?
Albert: And to understand that, you have to think about what really is the car-making. What’s the reality of the car-making that goes on for example in the United States? To what extent is it American? To what extent is it Japanese? Where cars are made is a function of how governments are helping companies come in and how cheap land is and those kind of things, as opposed to, “We’re gonna have an American-made car.”
n+1: When you were reading those numbers at the beginning, and there are four million cars made in the US, and some of those are Toyota, some of those are GM, and the six million in China, some of those are also Toyota and some of those are also GM.
Albert: Correct. And the interesting thing about China is by law any foreign company doing business in China, building cars in China, has to be fifty percent owned by the Chinese. So you end up with companies like GM building Buicks in China, but it’s actually a joint venture with the Chinese.
n+1: And where do those Buicks get sold?
Albert: Those get sold in China. China’s actually importing a few cars now but not a lot.
n+1: And cars that get made in the US, they stay in the US?
Albert: Again, for the most part. You can find a Hummer in England that was made in the US but those are pretty special vehicles, you know. It’s not like in the US where you have thousands and thousands of modern Volkswagons coming in or Toyota Corollas coming in.
n+1: In the US you do have a lot of cars coming in?
n+1: Because we’re consuming more cars than we’re producing. As with everything else.
Albert: Yes. We sell about, I think it’s about 9 million now down from 12 million cars in this country.
n+1: And we only make 4 million, you said?
Albert: Yeah. Well [repeating to self] we only make 4 million? We actually make more than that. It depends on how you count them. This is another problem, you have light trucks. And that ends up adding several million. Let me pull some other numbers up. For the US, yeah, 3.8 million cars, but then an additional 5 million commercial vehicles.
Albert: For a total of 9 million vehicles. And so, again, it becomes very tricky, these big pickup trucks are commercial vehicles, but they’re not.
n+1: So how many are we importing then, we’re only importing a million?
Albert: That’s a good question and I don’t know offhand.
n+1: But the French also make cars, right? Peugeot is a French car?
n+1: And the Italians have a car?
Albert: They do.
n+1: Which is the Fiat?
Albert: Uh-huh. They’ve also been known to make Ferraris and Maseratis.
n+1: And of course the Germans make cars. And the English, do they still make cars?
Albert: They do, the English actually make the BMW … Cooper, what’s it called? The Mini.
n+1: Oh right. And the Swedes?
Albert: The Swedes, well the Swedes are still making some Saabs and still making some Volvos but pretty soon probably won’t be.
n+1: How come?
Albert: Well, Saab was owned by Scania—most of Scania’s production was in the Netherlands. And a lot of it was in Brazil. Then when GM went out of business—they put Saab up for sale.
n+1: GM owns Saab?
Albert: GM owned Saab. The latest is that it will be owned by Koenigsegg Group, a Swedish maker of cars so expensive they don’t even have a sticker price. Now the Swedes are talking to a Chinese automaker about taking a stake in the company.
n+1: I thought it was Swedish?
Albert: Ah, well it was a Swedish maker of cars owned by GM soon to be a Swedish maker of cars owned by Swedish and Chinese companies.
Albert: Just like Volvo’s owned by—Ford? Yeah.
Albert: You’re very naïve about all this.
n+1: Yeah, I don’t know. That’s why I’m asking.
Saab, French, and Germans
Albert: Saab is an interesting company because they are a Swedish company. They start as a national company to make airplanes for the Air Force, and then they get into the car business, and then eventually they get bought by General Motors. General Motors goes bankrupt and they’re up for sale. Right? Jaguar’s another one. Jaguar’s a British carmaker, you know, a car that couldn’t be more British, and yet it’s owned by Ford.
n+1: But so Saab, you’re saying they weren’t even producing them in Sweden anymore?
Albert: They were producing them in Sweden but they were producing a lot of them in other places, like Brazil and Holland.
n+1: And so in what sense is it still a Swedish car? ‘Cause some Swedes initially designed it and that kind of carries through or what?
Albert: Well, I mean it’s funny, I mean you and I both owned a Saab.
n+1: Yes, we did.
Albert: That was very much a car in the tradition of the company. In other words, what made that car special was the tightness of the body, the rigidity of the structure and, in the eighties anyway, very advanced fuel handling in the engine. And in driving that car you can feel that, you can really feel that. If you drive a much more modern Saab, you’re dealing with a General Motors product and it’s softer and it’s really lost a lot of that sense of being different or being special. It’s not a whole lot different than another GM vehicle. And in fact they’re built on the same platforms oftentimes. Now in fact, a lot of Saabs were still made in Sweden in 2008—I’m just looking at numbers that show 75,000 vehicles made in Sweden, 11,000 in Austria, 4,000 in Ohio, but that was a special one—so they made the convertible in Austria and they were making the others in Sweden.
n+1: So then in what sense is it a GM car, because GM goes in and changes the engineers? What do they do? How does that work?
Albert: In what sense is it a GM car? It’s softer, it’s more American in its approach—there’s more cup holders and that sort of thing. To what degree is it still designed by Swedes? And to what degree is it designed by GM? After 1989, 1990? I can’t tell you. I don’t know.
Typically what they want to do is they want to reduce the costs. So they do that by sharing a platform. I mean GM did some stupid things, and Ford did some stupid things, in the purchases they made in 1980s and 1990s because they were kind of buying fancy names for the name. That’s the Jaguar’s story, for example. But they hoped to put the same mechanicals in a Cadillac and a Saab and thereby save money.
n+1: And this didn’t work?
Albert: Well, I don’t know. The big problem is Saab hasn’t sold enough Saabs. They’re supposed to sell a lot of them in the US and it’s just not done very well.
n+1: And so in what sense is the Jaguar an English car?
Albert: Again, if you talk to, you know, Jaguar aficionados, they’ll talk about the Ford Jaguars and how they’re not really Jaguars anymore. I’ll give you an example. Jaguars made their name in racing and they had an in-line six-cylinder engine that was, you know, just brilliantly fast and had wonderful torque, all the kinds of things people like in racing cars—and then they had all kinds of stupid things going on with their engineering where you had to have extra things like an oil cooler and a fuel cooler. The result was an engine that broke down a lot and leaked a lot of oil and so forth, it’s one of these vehicles where people talk about owning two of them so they could keep one in the shop. And that was part of the, I don’t want to say appeal, but part of the style, right? If you’re wealthy enough to have a Jaguar, you’re wealthy enough not to need it. So when Ford bought them, in 1989, they were suddenly making much more robust cars, much better cars. But on the other hand people were saying “Well they’re essentially Lincoln Continentals now. They’re softer riding, more American.” On the other hand, they’re now owned by Tata Motors, so will Tata turn it into an Indian car, I don’t know. But increasingly it’s hard to find that unique national culture to vehicles.
n+1: And when they had this national culture, where was this coming from? I mean, so Saab was a military company that—?
Albert: Saab was an airplane company and Saab’s expertise was in the monocoque design, or the building of the unit body in such a way that it was very tight and really fun to drive.
n+1: Like an airplane.
Albert: Like an airplane.
n+1: [Laughs.] Okay.
Albert: I like to think about the difference between, say, a French car and a German car.
Albert: And you can look at this in terms of the vehicles that came out around WWII. The two best ones to look at are the Deux Chevaux, the 2CV, from France, which is the Citroën, and the Volkswagen Beetle. Both of these cars are intended really to be a people’s car. They were chic, simple transportation. You get the masses on wheels. If you drive a 2CV, one of the things you’ll notice about it is it has incredibly soft suspension. The wheels travel really far up and down. If you take it around the corner really fast, the body will lean outrageously and yet the wheels will stay on the ground.
The alternative is what you think of when you think of German engineering, which is a very taut and tight suspension where the springs in the suspension are very hard, very rigid, and that’s how the car sticks to the ground. The body doesn’t lean nearly as much. Now we tend to associate those things with those national cultures, right? The Germans: very rigid and perfect in their engineering. And the French are lovers, they make a much more supple, floating machine.
Why are these two vehicles different? Well, there’re some basic engineering choices, and we don’t really know why those choices are made, but one could argue that it has to do with quality of the roads: a vehicle made in France when paving was not commonplace, or when the roads were very bad or very poor, would ride better with a very supple suspension, whereas a Beetle would ride better on a much better engineered German road.
I don’t know how much you can link the cars to the culture, to the cuisine, to the clothes, and so forth—I mean to be honest I’m not convinced that that’s the case, but that’s the sensibility. By the same token, British cars are associated with the Edwardian or the American-time Gilded Age vehicles. You know, the early twentieth-century vehicles driven by English gentlemen with the top down and their driving caps on. Those were the cars that came to the US in the nineteen-seventies. The Triumph, the Morgan, the little English roadster, and that’s what we think of as an English vehicle. A lot of this is just kind of a mythology associated with cars and goes to a conventional wisdom of our expectations about what the French are like or what the Italians are like or so forth.
n+1: But clearly there’s a kind of feedback loop to the carmarkers, right? It does seem like the Jaguar and the Rolls Royce are still like that, right? I mean these aren’t total constructs.
Albert: I don’t know, I think increasingly they are. Again, you look at the Beetle. The new Beetle is a vehicle that has nothing to do with the original design. It shares a platform with other vehicles. The new Jaguar shares a platform with another vehicle. The Volvo Wagon, you can purchase that as a Ford. So what makes it a Volvo? Really, that’s a legacy of people’s experience with the vehicles.
The Volvo Wagon is a great example, because you can buy the same vehicle as a Ford now called the Taurus X. It’s cheaper to buy it from a Ford dealer, cheaper to buy it as a Ford. Is it less reliable? Is it less safe? Is the engine any different? Well, no. But you don’t associate a Ford with a professor with elbow patches and a pipe. You don’t associate it with safety. And those things are a function of the history of Volvo and of Volvo’s marketing. So I guess what I’m saying is, yeah, these are constructs, and these are constructs that have some basis in truth if you go backwards in time.
n+1: It sounds like this process began when Ford and GM went on some sort of shopping spree in the late eighties, is that what happened?
Albert: Absolutely. They were on a roll. They were making a fortune selling SUV’s. And everybody else was not doing well and then they bought up car companies.
n+1: And now they’re having to give them up?
Albert: Absolutely. Now it’s come home to roost.
n+1: It sounds like what we’re saying is a lot of these cars basically now are the same car.
Albert: Yes, these are all fictions. A lot of these different companies are fictions. And the bigger the companies, the more you could say that’s the case. There is still a difference between a Honda and a Toyota. There is a difference between a Subaru and the Honda. It’s harder to find the difference between, say, a Toyota and a GM product because GM is working with Toyota. Ford is working with Toyota. You know, the Prius is a Toyota vehicle through and through, and yet a lot of the technology of the Prius will be sold to Ford and Ford will put it in its cars and they’ll be no different than a Toyota. On the other hand, the thing you have to understand is cars are only moderately transportation appliances. Yes, they get us from point A to point B, but that’s a very small part of what they’re about.
They’re very much, in the developed world, in the rich world, about expressing to ourselves and to other people who we are. And so you buy a Prius not because of the mileage, you buy a Prius because of what it says to you about who you are. And the ads that you watch on television helped create that sense of yourself. The ads don’t actually work to sell you a car—this is one of the things I learned a long time ago reading advertising stuff—what they do is they convince you that you bought the right car after you’ve bought it. And that makes you a good salesman for the company to go out and say, “Oh yes, I love my Toyota.”
And so a lot of what these companies are doing now is about branding. It’s about maintaining an image, and that’s not really anything new. I mean Ford—if you think of a Ford Mustang you know that’s what you’re supposed to think of, you’re not supposed to think of a Ford sedan, you know? You’re supposed to have a certain sense when you think of these vehicles.
n+1: So we’re talking about a certain kind of automotive convergence, right? I mean there was a time when there was a wider variety of styles and engineering decisions, right?
n+1: And part of this has to do with the fact that these companies are just kind of getting eaten up by larger companies and part of it must just have to do with the fact that some of those decisions were better decisions?
Albert: I don’t know if better decisions is the right way to describe it as much as the ecosystem that these vehicles are operating in is increasingly similar. So for example the Europeans used to be very concerned about safety and the Americans weren’t necessarily. Now we’re all concerned about safety. It used to be that expectations for reliability were different in different countries. And now expectations about vehicles are much more uniform.
n+1: So what about the Indians and the Chinese? Are we going, are they—
Albert: They’re going to take over the world.
n+1: Is that true?
Albert: I mean, again. Vehicles are two different things. Vehicles are a way to get around, a way to be free from public transportation or your bicycle, but they’re also this other thing, this suit of clothes that you put on. One of the interesting things in China is, as many cars as they’re making, they’re also making these other vehicles now, these rural vehicles. And they typically have a one cylinder engine and they’re incredibly rickety machines. I forget the figures, but it was basically three to one vehicle purchases were these rural vehicles. In other words, three times as many rural vehicles being purchased in China as opposed to what we think of as a regular car. And about twenty-five percent of the fuel, diesel fuel, being used in China is these vehicles.
Obviously the Chinese would hope to eventually be at the same level as the Europeans and the Americans, and vehicles will become the same thing there as they are here. But they’re not there yet. The other thing is that in the nineties, I forget exactly what they call it, but one of their five-year plans essentially said, “We will focus on motor vehicle production. We will build cars and that will be a way to generate wealth, that will be one of the core pillar industries.” And you know you’ve got a billion Chinese and you’ve got a lot of companies and a lot of joint ventures making a lot of cars there.
n+1: These are going to be cars for export?
Albert: Well there are cars that are exported—Geely. Geely is their biggest company right now. Geely made 221,000 vehicles in 2008.
n+1: That’s not very many.
Albert: No, it’s not, but here let me go back here to the numbers, if we go down, you have the big firms: Toyota, Ford, GM, Honda, those are the ones you’ve heard of, Peugeot. Here, Tata ranks—well, oh this is interesting—AvtoVAZ, which makes the Lada. This is number 18 in the world.
They made 800,000 of them, followed by Tata which also made 800,000. Followed by, here, Chana Automobile, half a million, Dongfeng Automobile half a million, Beijing Automotive half a million, Cherry—which I’ve written about before—350,000. Here’s Volvo down at 250,000. Here’s one I’ve never even heard of, Harbin Hafei, 226,000; Geely 200,000. I mean it just goes on and on. Here, Great Wall. Chongqing Lifan. And each of these companies, there’s just dozens of them. Here, China National, Jiangxi Changhe, all of them making one or two hundred thousand vehicles and then you get down to the Porsches and the Saabs. But there must be about twenty companies listed here in the top fifty. Basically from the twenty-third biggest seller down to about the forty-second biggest seller are Chinese, except for Saab and Volvo are in there. So there’s a lot of car companies that are making a lot of cars.
n+1: And what do the cars look like?
Albert: They look like little Japanese cars. A lot of them are Micro-Minis, they’re called, or Micro-cars. Well you see the Tata Nano, that’s an example of just a very small vehicle. You know, 50cc engine—tiny little engines—and urban cars, city cars. But you would just look at them and say, “Oh, that’s just an old Toyota Corolla.”
n+1: Well the Tata, that’s a distinctive kinda looking car.
Albert: Yeah, no the Tata’s very round and all of that. I guess another thing that’s worth pointing out is that the Chinese tend to steal car designs too.
n+1: [Laughs] If a Japanese car crashes in China, they go to the wreckage and take it apart, figure it out?
Albert: Exactly, exactly. I mean, they’ve gotten in trouble before. Here, like I’m looking, Cherry Automobile, this looks like an old Saturn. This looks like a Saturn from about six, seven years ago. And it may well be. They’re very good at that. You know the expression “the Chinese copy,” right?
Albert: It means a cheap imitation of—I mean I’m just thinking about the expression—the first time I saw it in terms of automobiles was in the discussion of steel, the move from the wooden frames to steel frames. In other words, wooden cars to steel cars. And I was reading a lecture about it and—you know this was around, I don’t know, 1910—and the guy is saying, “These are Chinese copies of wooden cars.” In other words, you haven’t really thought about how to make a steel automobile yet.
n+1: So it looks like a Saturn—and the engineering’s the same—
Albert: The look is the same, often some of the engineering isn’t the same.
n+1: It’s not?
Albert: I mean the Chinese have tried— the Chinese manufacturer Jiangling Motors started exporting the Landwind SUV to Europe in 2005. It was a knockoff of an old Isuzu Rodeo but it failed the European crash tests.
n+1: But it crumpled upon contact, or what?
Albert: It crumpled upon contact, exactly. You can see it on Youtube and it’s laughable and scary all at once.
n+1: So what do you see happening in the future with cars? Are people going to stop buying SUVs finally or is that never going to happen?
Albert: [To self, mockingly] Are people gonna stop buying SUVs? Ah, I don’t know. To me that doesn’t matter all that much. I mean, you know SUVs are—well, here I’m looking at a Great Wall—here’s the Great Wall Motor Company: established in 1976 and they’re building a car that you would not know wasn’t a Ford.
Albert: BYD Automobile, here is another Ford. I’m sorry. So, okay, let’s say we stop driving SUVs. Big deal, what is that going to mean? We’re gonna drive sedans? I mean, the fact is that vehicles have gotten much more bloated. Daniel Sperling uses the term “monoculture” to describe our cars. They’re all petrol-powered, they’re all of a certain size and they have certain safety features and so they’re all really very, very similar. And we’re right now I would say at a Baroque period of the automobile as we know it.
In other words, we’re going to have all this diversity on the surface but in reality the vehicles are not going to change much. But we’re on the cusp of hopefully a real radical change in the way we power cars. Cars will become electric, basically. And that’s going to be pretty cool. Whether that will cause us to change fundamentally the vehicles, I don’t know. In other words, will they look any different? I don’t know. Right now, we’re trying to produce plug-in electric vehicles that look essentially the same as the cars we drive. For there to be any real change, for us to stop driving SUVs or to stop driving sedans or cars like we know them today, there will have to be a change in the ecosystem in which these machines operate. What that means is you’ll have to change the really boring things that nobody wants to think about or change. So, lane widths and how we run insurance, how we tax vehicle fuels, how we regulate safety. All the kind of behind the scenes, backoffice, boring things that most of us don’t know a whole heck of a lot about and don’t particularly have the time to worry about. Absent any of those changes, I don’t think we’re going to see a whole lot of difference with the car, a whole lot difference in our vehicles. They may become a little bit smaller and lighter, but you would still recognize them.
n+1: When is that going to happen? I thought they killed the electric car.
Albert: No, no, no. They didn’t kill the electric car. The electric car is coming. Plug-in hybrids are hard on the near horizonin a way that they haven’t been before.
n+1: Because of concerns about oil, I mean because this is serious? And climate?
Albert: Because of concerns about climate. You know, it could go the other way, it could go really badly. But basically, the price of oil’s going to inch upwards. At that point one of two things will happen: we’ll move to an alternative system for powering our vehicles or we’ll start using unconventional oil. And that means coal, converting coal into oil, or things like the tar sands of Canada.
Albert: This is a big one because they want to build a pipeline from Canada. But these are just hard fuels. These are absolutely awful fuels. They have a lot of carbon in them, so they’re releasing a lot of carbon dioxide in to the atmosphere and then they also have a lot of things other than carbon in them, so it takes a lot of energy to mine and process them. Now it’s quite conceivable that’s what will happen. If George Bush were president, I’m sure that’s what would happen. We can hope that that’s not what’s going happen and instead what’s going to happen is new battery technologies are on the horizon, the Chinese recognize that they don’t really have the oil supply to put a billion people on wheels. And we’re going to need something, some alternative which is just much more efficient than the internal combustion engine.
That’s what I hope for, right? The internal combustion engine’s about thirty percent efficient. An electric car, an electric motor, is eighty, ninety percent efficient. And then it’s just a question of how do you power an electric motor? How do you store energy and create energy? And if you can do that efficiently and sustainably you’ll have something truly new and truly different. And in the beginning of the automobile there were essentially three power options: steam, electricity—you know battery or chemical battery electricity—and hydrocarbon fuels like petroleum and alcohol
And the fact that gasoline won is not necessarily because it was “the best.” The power density of gasoline is very high—you get a lot of energy for each pound of petrol. Still, there was a huge diversity of options and it’s not as if the technology was chosen simply because it was the best—it was chosen by a complicated process that involved certain companies coming into business and others going out of business and so forth. So we’re right now at the other end of that. We’re at a time when there’s conceivably an opportunity for new technologies and different technologies and different ways to get around.
n+1: And so, I guess I didn’t realize this, if we switched to an electric engine there’s no more pistons and there’s no more of that stuff? And that could be smaller?
Albert: Oh yeah. Well, you could make a very small gasoline engine too, you know? The engine doesn’t need to take up that much space. But I love electric cars because they make sense. You stop at a stoplight, the engine stops. You can do that now with a diesel engine or petroleum or gasoline engine, but that’s not generally the way our gasoline engines are made. So you have to bolt on another technology. Again, this is another way in which I think of automobiles today as baroque. If you take, you know an automobile engine from 19—I don’t know—50, with a carburetor on top and a distributor, it’s just an incredibly simple machine. I could fix it in my garage. Today there’s so many things bolted onto that engine to accommodate a variety of things we want it to do, like use less gas, like not produce smog, like provide air-conditioning and so forth that it’s just become a Rube Goldberg, it’s a very complicated machine. And one of the things that’s done, for example, is the engine powers the brakes and powers the steering, right, because it runs the hydraulic pumps that do all of that. We’re moving to what’s called drive-by-wire in which those systems are now electrically actuated. Once you do that it becomes a lot easier to swap out the engine, right? You don’t need the engine anymore to power a hydraulic pump. You can have an electric motor just as easily. And so the disassociating of the various technologies involved in getting a car around will make it easier to experiment with a different mode of technology.
n+1: Why do you want the lanes to change? The width of the lanes?
Albert: Well, just for example, we have incredibly wide streets. We have suburban streets that are incredibly wide. Why are they wide? So the fire department can get down them. Well, that’s kind of stupid, you know? Houses don’t burn down the way they used to. If neighborhoods were different, if people could walk, if zoning laws would change… I mean zoning laws in these places now still require a certain number of parking spaces if you want to have a building. A store or something like that. It doesn’t have to be that way. There’s a great paper called “The High-Cost of Free Parking” that talks about this. The college I work at—has a huge parking problem. And it’s a constant battle to make sure there’s enough parking for all the students. You know what? All that parking’s free. That’s absurd, it’s obscene. There’s barely enough bike racks. Until that changes, until the college says, “Oh, hey, you want to drive to school? It’s going to cost you,” there’s no reason for people to make other choices. And so that’s what I mean by the ecosystem. You know, little things have to change, things we don’t really think about.
n+1: But if you were to make the lanes narrower, you’re saying cars would get narrower?
Albert: No, cars won’t get narrower, but people will go slower.
And once they go slower, the vehicle doesn’t have to be as safe. It doesn’t have to be as large. That’s just an example. You’re talking about two things. You’re talking about land use—basically we use our cars to get the stuff of daily life, to get a quart of milk. We need to change our land use incentives so that people have a quart of milk within walking distance.
But also, we need changes that will make it possible to use other kinds of transportation technologies on the same road that’s now completely taken over by the automobile. And you can do that by making it just that much more difficult to drive an automobile and that much easier to ride a bike or use an electric, what’s called a neighborhood electric vehicle, what have you. [Pause] It’s not that hard, you know?
n+1: How realistic is it that we’re going to tear up the roads?
Albert: Oh, it’s very unrealistic.
Albert: It’ll never happen.
n+1: Dan, you used to be a radical bike activist, right?
Albert: Um, yeah I guess. I still ride my bike. I mean, we live in the suburbs and we have one car. That’s pretty radical to our neighbors.
Albert: So, yeah, I’m still a radical bike activist.
n+1: But you love cars?
Albert: [Slower to answer] Yeah. Yeah, I do. I do love cars. I’d like to have five cars.
And I would like to use the appropriate car for the appropriate task. So I could have a neighborhood electric vehicle and use that most of the time and then yet I could have a big convertible just for the fun of it, right? And it could get twelve miles to the gallon, who cares? Because I won’t be using it that much. I can’t do that because for each of those vehicles I need to carry insurance. That doesn’t make any sense because I can only drive one of them at a time. So if instead of doing insurance the way we do it—which is you own a car, you pay insurance based on, you know, whether you’re white or black or if you’re Latino or Mormon or how old you are—you paid per mile driven. You could then associate insurance with the driver as a person in the vehicle and that marginal cost would shift, right? ‘Cause right now it’s, “Why not go out and get a quart of milk? I’m not actually paying, all I’m paying for is the gas. All those other things are fixed costs.” The insurance, the cost of the vehicle itself, the maintenance and what have you. By shifting that marginal cost you could really, very rapidly, shift the way people think about cars.
n+1: How would the insurance company know how many miles you’ve driven?
Albert: This is in the Sperling book. How did he talk about doing it? I feel like he talked about it happening at the gas pump. It had to do with how much gas you fill up. But, you know, the insurance company now asks you how many miles you drive.
There’s no reason it couldn’t be linked to your odometer, there’s no reason it couldn’t be done, you know, you have to get your vehicle checked every six months or every year in most states. There’s no reason the odometer reading couldn’t be sent to the insurance commissioner or something like that. I mean, listen, this is one of the things. We have all of these—we should just put Google in charge—we have all of these analytical tools. We could really restructure the economics that drive it.
n+1: Wouldn’t it just lead to people messing with the odometer?
Albert: You know, yeah. There are problems. There certainly might be problems, but insurance has changed so much from where it started years ago that it’s not unreasonable to ask for it to change again—none of these are instrumental problems.