Commuting to collaborate with other people face-to-face for half the day.

How is this inefficient, unsustainable?

It provides the combination of private work and group interactions that are parcel of most white collar jobs. The vehicles will be electric, and many will probably spending any idle time at solar farms, to save on energy distribution costs, if they aren't being used as private offices. It is going to allow people to live where the want, and still do they work they want to.

It sounds as if it would make a lot more sense for people to agree on 2 days per week to be in the office and work remotely the other three or something along those lines.

That's what they do at the company I work for (I'm at a remote location so I'm 100% remote for them).

I think it's the kind of setup that works best, for some kinds of software projects.

And get up 1.5 hours earlier, two days a week, and get home 1.5 hours later, to sit in their cars?

Moreover: the cadence of business just won't let this happen, or it would be widespread already.

The chance that is coming is that cars drive themselves. As a consequence, part of the business day is going to be spent working during the commute.