Shai Agassi plans to sell purely electric cars to people unwilling to pay one red cent extra for anything green. His company, Better Place (BP), will be fully set up in Israel by 2011, he says, in Denmark about six months after that, and in Australia about a year after Denmark. San Francisco’s mayor, Gavin Newsome, who has just bought a Tesla Roadster, hopes to bring Better Place cars to his city. The cars, though, need a dense network of special battery-swap and charging stations to work. San Franciscans might not want a car that can’t be driven far from home. Once a driver has passed the last electron-filling station, she can only drive 50 miles (80 km) before turning back for a refill.
Required to be Better
The Better Place car looks sensible on an island, where drivers will feel constrained by geography, not their batteries. The island must have high taxes on internal-combustion cars, a supplier of electricity willing to communicate often with the electron filling machines or their masters, and drivers who will accept a bossy electronic nanny in their car. More such islands exist in the world than one might first guess.
“The ability to drive a car is not limited by the battery or the range of the car, it’s limited by the range of deployment of the infrastructure.” Shai Agassi, Melbourne, Australia, October 23, 2008.
No Man is an Island, But Israel Is
It is time to relearn geography. Israel’s borders with Lebanon, Syria, Jordan, and Egypt are closed. To the west lies the Mediterranean. Politics and the sea isolate the country.
Israel imports all its cars. The tax on internal combution ones is 160 percent; on electric cars it is ten percent. A hybrid, like the Toyota Prius, counts as an internal combustion car. Agassi encouraged this difference in taxation by charming the right Israelis (including President Shimon Peres), many of whom dislike buying oil from unfriendly Arab countries.
Because Israel is such a small island, BP can meet demand for electrons with only 1000 electron stations. The country now has only 200 gasoline stations. This week, gasoline costs about U.S. $5 per gallon.
All electricity in Israel distributed on the national grid comes from the government-owned Israel Electric Corporation. The government backs Agassi’s plan; he hopes the managers of the utility will cooperate with him. If the Israel Electric grid watchers tell BP that one area or another is straining to supply demand, BP can reduce the rate of its battery recharging in that area. Agassi’s dream is that all the additional electricity demand that his cars create will come from renewable sources. Israel is a good place to experiment with solar generation of electricity. Batteries are a good place to store electricity whose time of production doesn’t match its time of consumption.
Last, according to Quin Garcia, the Better Placer running the demonstration car program, few Israelis mind being tracked by a GPS device. After all, they happily carry everywhere their homing-beacon cell phones. The computer in each BP car, running the company’s proprietary software, will tell the driver when the battery’s charge is low, where the nearest recharge or swap station is, and, perhaps, to accelerate and brake more smoothly. Who keeps, and for how long, all that data about each car’s movements? Don’t worry about it, says Mr. Garcia. Apparently, BP will leave those concerns to the Association for Civil Rights in Israel, the country’s counterpart to the American Civil Liberties Union (ACLU).
Denmark is also an Island
Recheck your map. Denmark shares only about 50 miles of border with Germany; the rest is seashore. Like Israel, it is easy to saturate with electron stations. The government has imposed a 180 percent registration tax on internal combustion cars to encourage electric ones. Gasoline costs about U.S.$6 per gallon. Denmark is also congenial to BP because it is marvelously rich in wind. The wind blows mainly at night, when Danes are sleeping The big utility, DONG (Danish Oil and Natural Gas), has actually been giving away its wind-generated electricity to neighboring countries. It has now signed a deal to sell that nocturnal electricity to BP, which hopes to pipe it into the resting automobiles of sleeping Danes. This year, only 20 percent of DONG power comes from wind. The rest, unfortunately, comes from coal. Maybe DONG will build more windmills?
Better Place announced on October 22 that Australia is not a continent, but an island, after all. At least, the eastern coastal stretch from Melbourne through Sydney to Brisbane is a population island. To the east lies the South Pacific, to the west, the sparsely populated desert. AGL Energy says it will supply green electricity for BP cars, but its nearest source is Hydro NSW, a large hydroelectric project. Australians count hydro as green, though American environmentalists do not, because it produces no carbon. Australians now crank out greenhouse gases at the highest per capita rate in the world, because of their coal consumption. It is past time to cut back. The federal government imposes a tax of 33 percent on luxury cars, defined as those costing more than AU $57,000 (US $36,700). So far it imposes no tax on inexpensive internal-combustion cars. Gasoline costs about US$3 per gallon. Agassi hopes that once his firm has set up in the population center of the country, it can expand north and southwest around the coastal rim.
When a Car is a Razor
Or a cellphone. The Better Place customer will buy the car for $20,000 or less and buy a contract. The contract entitles the customer to a specified amount of electricity per time period. BP will retain ownership of the battery, which when manufactured in volume might cost only $10,000. BP plans to get its batteries from AESC, a joint venture by Renault and NEC, that is developing and testing a rechargeable lithium-ion battery for use in automobiles. If the customer doesn’t have to buy the battery, the package is cheap. Republicans, lumberjacks, and eaters of red meat may buy it.
So far, BP has two advantages that most of its competitors lack. It understands that electric cars must be cheap to replace internal combustion cars. It also understands the importance of electron refilling stations. It has chosen to swap out the customer’s old battery quickly, then recharge it slowly in off-peak hours, to avoid straining the electric grid. Chevrolet’s Volt is merely a hybrid, with a gasoline engine to carry drivers past the 40-mile mark. It will also cost $40,000. What disappointing lack of imagination.
A competitor to watch is Daimler-Benz. In a small test-run collaboration with the German electricity supplier, RWE AG, Daimler plans to build 500 charging points in Berlin to power 100 all-electric cars: minute ones from smart and non-minute ones from Mercedes-Benz. It seems to be betting on fast charging, as opposed to Better Place’s fast swapping. What remains to be seen: is Berlin an island?
Thanks to Quin Garcia, head of Supplier Relations and Technical Alliances at Better Place, for his talk to the Silicon Valley chapter of the Electric Auto Association on September 20, 2008.