Silicon Valley-based Better Place has an innovative business model for electric vehicles. Founded in 2007 by Shai Agassi, Better Place wants to make electric vehicles (EVs) as affordable as comparable internal combustion cars and overcome their limited range.
A primary goal is to build enough charging stations so batteries can be kept charged with 100 miles of driving capacity. These chargers would be located where people work, live, shop, and dine, usually in parking lots.
For longer distances, exchange stations could swap batteries in less time than it takes to fill-up a gas tank. Separated from the car, batteries can be easily recharged and replaced at automated battery exchange stations. Better Place is using lithium-ion battery technology and expects the cost of the batteries to drop significantly through economies of scale. Batteries are owned by Better Place to reduce EV cost. They are part of its Electric Recharge Grid (ERG) network of charging and exchange stations that will be deployed on regional and countrywide scales.
The business model at Better Place is based on a highly successful one, the mobile phone. Instead of buying minutes, drivers purchase miles. Like cellular phones, there would be pay-as-you-go or set-mileage plans. Subscriptions could subsidize EV purchases. Sign a long-term contract and get a reduced price, perhaps even a ‘free’ EV.
Better Place considers it important to preserve the ‘social contract’ drivers have with their cars. Thus, it will offer several car models produced by major car companies that are competitive with current internal combustion engine cars. They will look like conventional cars with comparable or better performance and meet the same safety standards, says Better Place. Upscale sedans and SUVs would have high end sound systems, GPS navigation, Bluetooth, and air conditioning.
Initial Better Place ERG networks will be in Israel, Denmark, Australia, Hawaii, Japan, and California. Ideal locations have high population densities and substantial commuter traffic. In smaller states or countries, Better Place can deploy systems nationwide or statewide. For larger areas, Better Place will begin in dense urban areas and expand from there, the way mobile phone service started. Electric power will come from wind, solar, and other carbon free sources, with Better Place helping develop them if they’re not already available.
In partnership with Better Place and Renault-Nissan, Israel wants to be the first nation committed to an all-EV infrastructure and oil free by 2020. It aims to do so by blanketing the country with EVs and plugs. Israel is ideal for such a move with 90 percent of car owners driving fewer than 44 miles daily with all major urban centers less than 93 miles apart.
Better Place partner Israel Corp. has already built 400 wired parking spots, mainly in and around Tel Aviv. It plans to wire 100,000 parking spots in Israel by 2010 to provide a charging opportunity every 25 miles. There will also be battery exchange stations. A fleet of electric cars being developed by the Renault-Nissan Alliance will be available in 2011.
Danish Oil & Natural Gas Energy has also signed an agreement with Better Place. Like Israel, Denmark’s size makes it an ideal early adopter for an electric vehicle infrastructure. Australia is committed to reducing its carbon footprint by using the country’s abundant renewable energy supply. Working with Australia’s largest privately-owned renewable generator AGL Energy and the infrastructure investment company Macquarie, Better Place will build an ERG network to support the switch of Australia’s 15 million gas cars to zero emission vehicles.
In California, Better Place estimates a network investment in the San Francisco Bay Area will total $1 billion when the system is fully deployed, probably by 2012. As part of the Hawaii Clean Energy Initiative, Better Place will be partnering with the state of Hawaii and the Hawaiian Electric Co. for mass adoption of EVs powered by renewable energy by 2012.
The evolution of Shai Agassi’s vision to make the world a ‘better place’ that’s more in tune with sustainability continues. Better Place has partnered with Subaru maker Fuji Heavy Industries and other Japanese carmakers in the first Ministry of Environment sponsored EV project in Japan, and we expect that the list of worldwide alliances will continue to grow in the years ahead.
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