A reader continues the conversation:

This series of posts are really interesting to me, in large part because they seem so divorced to the reality that I experience living in Southern California.  I live in Orange County, the suburbs.  A vehicle with a range of 40 miles would not have gotten me from my front door to my former office (I'm now self-employed and working from home until we have an office space), and 20-30 mph would have doubled, if not tripled my commute time.  I don't think my experience is very unique in Southern California, either.  And the fact is that Southern California is not really designed well (anymore) for public transportation.  This sort of thing might (I stress, might) work in an urban hub center (New York, Chicago, downtown Los Angeles) but for those of us who have to travel in and out on a daily basis?  It would be the Zune of cars, not the iphone.

Avent endorsed public transit in addition to smaller cars. He wrote that  "commutes could potentially involve some sort of transit, but to make that happen, one needs to effectively solve the last mile (or last few miles) problem in the suburbs." Another reader:

Regulation isn't preventing the creation of an "iPhone of cars".  Frankly comparing iPhones and cars is a bit apples and oranges, but since wer're making the comparison, here's another excerpt from Ryan Avent's post:

Every weekday, tens of millions of Americans get into vehicles that are full of passenger space which won’t be used, with engines capable of horsepower and speeds that won’t be attained, holding fuel tanks that could power the car for distances that won’t be traveled. The result of all this over-engineering is that cars cost way more than a vehicle for daily commuting need cost, and they consume way more energy than a vehicle for daily commuting need consume. This all adds up to a remarkable waste of resources, even before you begin talking about things like congestion.

So why is that?  It's not a matter of regulation, but rather a simple matter of demand.  In the 60's and 70's the cars that people demanded were enormous pieces of Detroit steel that seemed to propel themselves by simply ejecting gasoline out the rear.  It made sense in a time of cheap energy.  Why not have the big car with the big back seat when you have some place to park it and plenty of cheap gas to run it?

With the oil price spikes, we saw demand increase for more compact cars.  The premium for that extra space simply wasn't worth the long term costs of the gasoline to drive it.  This trend has continued with a constant back and forth between spaciousness, power, and fuel efficiency depending on the cost of gasoline at the time.  A few years ago, the Hummer was all the rage, and today it's the Prius, the Mini, and the Smart Car.  Sounds a bit like innovation to me.

Every year we have cars that can go a little further and a little faster for a little less fuel.  Depending on market conditions the types of cars will vary, but the overall trend is towards greater efficiency no matter the vehicle.  There are barriers that reduce the rate of innovation in the automotive industry, but regulation is a small part of that puzzle.  The real barrier is that manufacturing a car is a labor and resource intensive process that tends to make manufacturers risk averse.  An iPhone, for all it's electronic complexity, is relatively simple to manufacture. 

For a small electronic device like the iPhone you can design everything on a computer, send it off to a manufacturing plant in China and have them whip up a sample in a short period of time at minimal cost.  There is no equivalent capability in the automotive industry.  To build even a prototype of a car is expensive, let alone tooling up an entire assembly line to make them in sufficient quantities for the market.  If the iPad is a bust for Apple, they'll scrap it and try something else, but if the Prius is a bust, Toyota is screwed.

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