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The issue with larger batteries is that I'm not really convinced that everyone actually has access to charging everywhere. If you were guaranteed that, the fuel savings might be worth it.
I've argued about this with Tesla fanboys before, if you live in the city where there's scarce parking and shared parking lots with no chargers, you'd be very thankful for what a few gallons of gasoline can do.
Most people in the world live in densely populated areas where charging is an issue. It doesn't make a lot of sense to design the car to take a bigger battery that only a minority of people will use.
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