opinion : Bloomberg

How electric cars will change the American road trip — Conor Sen

Bloomberg

SEPTEMBER 3 — With the long Labor Day weekend upon us, tens of millions of Americans will hit the road in an annual rite. Along the way, drivers will fill up gas tanks, grab a bite to eat, stretch their legs, perhaps stay the night at a motel. Should autonomous, electric vehicles displace traditional automobiles, this roadside economy and ecosystem will be disrupted. How and when remains to be seen.

Thanks to the construction of the interstate highway system decades ago, it’s relatively easy and affordable to drive hundreds of miles for leisure or to visit friends and family. The commercial and automobile infrastructure has been built incrementally over decades to accommodate drivers and internal-combustion engines.File picture shows cars travelling north towards Los Angeles on Interstate highway 5 in San Diego, California February 10, 2016. — Reuters picFile picture shows cars travelling north towards Los Angeles on Interstate highway 5 in San Diego, California February 10, 2016. — Reuters pic

The official rest areas and “welcome centers” often found near state lines are government-run, and explicitly prohibit commercial activities with a few exceptions like vending machines. The idea was that as the highways were being built, many businesses already existed to accommodate the commercial needs of drivers, and they wanted protection from competition. (When it comes to rest areas, protectionism still prevails.)

If businesses want to serve drivers, they’re forced to buy up land near highway exits that they hope will be convenient for drivers, and set up shop there. They advertise with tall signs that can sometimes be seen for miles. Some amount of clustering often occurs, with certain highway exits offering more amenities than others. Anyone who’s driven from Los Angeles to Las Vegas knows one good example: Barstow, California. Roughly the halfway point between the two cities, at the intersection of I-15 and I-40, it was destined to be the place that people stopped to go to the bathroom and get a milkshake and fuel up.

That all makes sense while humans are driving gasoline-powered vehicles. But think ahead to what will change when most automobiles are driving themselves, fuelled by batteries that meet certain standards and guided by shared software. The stops on a road trip would be less likely to be determined by a hungry driver noticing a tall sign or a low-fuel light.

Instead you’ll have autonomous electric vehicles concentrated in a few dozen metro areas, from which they will depart on road trips with fully charged batteries. These vehicles might be programmed to stop, say, every 180 to 200 miles.

The companies that build roadside infrastructure can use big data to map precisely where to invest tens or hundreds of millions of dollars into mega rest areas filled with banks of electric charging stations and all the amenities these drivers are looking for. And because the vehicles are autonomous they can drop passengers off at the doorstep of a centralised amenity area, charge on their own while passengers are eating or using the restroom, and then circle back once the passengers are ready to leave. Imagine a rest stop that’s more like a walkable shopping district, less like an island in a vast parking lot.

It will probably be a lot more consolidated and orderly than the hodgepodge system we have today. It’ll be great news for some communities that, like Barstow, can build local economies around this predictable revenue stream paid for by outsiders. But it’ll be devastating for hundreds of small towns that have come to rely on the jobs and tax dollars from highway businesses that evolved to meet the less predictable needs of human drivers and gas-powered vehicles.

When fewer but larger commercial districts cater to road-trippers, maybe the land around highway exits will become the big speculative gold rush of the late 2020s.

Despite the big unknowns, some things about the great American road trip surely won’t change. Are we there yet? — Bloomberg View

*Conor Sen is a Bloomberg View columnist. He is a portfolio manager for New River Investments in Atlanta.

**This is the personal opinion of the columnist.

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