More battery than generic performance. Performance may have improved but components haven't shrunk much and batteries definitely haven't shrunk.

You can likely reclaim some space by making a really tiny chipset, but batteries and screens combined are over 70% of your phone's total size. Project Ara makes components larger (due to connectors and housing), so you need to find space from somewhere, and there isn't a lot to be taken from most components (they aren't very large already).