Technological Lock-in and the Power Source for the Motor Car

As the nineteenth century ended, three principal types of engine competed to power the early motor car. Had some minor condition been different around the beginning of the twentieth century, perhaps therefore todays road vehicles would not be powered overwhelmingly by internal combustion engines. That at least is an implication of the lock-in hypothesis. However the choice of product technology depended not on chance but at first on differential relative endowments of natural resources and capital. Abundant oil deposits and water encouraged the American development of lower first cost steam engines, which used more fuel and less capital. Electricity also was cheaper in the United States than in Europe, outside Germany. Since European endowments were not as auspicious for steamers or electrics at the turn of the century, European entrepreneurs focussed on the internal combustion engine. Judged by the rapid development 1895-1900, they chose the most progressive technological trajectory. By 1904, US motor firms were adopting European product technology and abandoning steam. By the end of the First World War they had also given up electricity.