The Road to a Better Place

Better Place began with a $200 million venture capital investment, and the company has easily garnered that much again in enthusiastic publicity. Since its founding in late 2007, barely a week goes by without the electric vehicle-and-infrastructure project cutting a new deal that makes business headlines in newspapers across the world. Why? Certainly, founder Shai Agassi is the consummate salesman, and a photogenic, charismatic, and literate entrepreneur.

But at the end of the day, it comes down to this: What Agassi is promoting could revolutionize the automobile industry just as surely as the Model T did a century ago.

Agassi hasn’t invented a fuel-efficient 100 mpg-engine, or a powerful new battery technology that will propel EVs for more than 250 miles on a single charge. Instead he’s bringing stakeholders together to create the electric car infrastructure that will power the first generation of EVs and plug-in electric vehicles (PHEVs).

The Better Place principle is actually quite simple, and it seeks to circumvent the classic chicken-and-egg scenario that was dogging the EV industry for years before the first Tesla rolled off the production line.

The story begins in Israel, a country with a vested interest in slowing climate change and weaning its economy off the fossil fuels that enrich hostile regimes. Shai Agassi must be very good at what he does. First he wrangled a commitment from the Knesset to enact preferential tax rates for zero-emission vehicles. Then he convinced Renault’s Carlos Ghosn that it was in his company’s long-term interests spend a small fortune to create a full-featured, mass produced EV for the Israeli market by 2011. And then, working with utilities, Better Place unveiled plans to build 500,000 charging points and battery swap stations across the country. Early EV adopters in Israel will be able to travel across the country as easy as kiss my hand.

Since that noteworthy first success it’s just been a matter of replicating this good model in other countries, and other regions, often hand-in-hand with Renault-Nissan. Denmark, as a leader in renewable energy, signed on in early 2008, and they’ve since been joined by Australia, Portugal, Hawaii, Ontario, and the Bay Area. That’s not a complete list, as high level talks are also occurring in several other countries. Perhaps even more importantly, the idea has created a great deal of excitement among progressive governments, and countries like Ireland and the United Kingdom are planning to build similar cross-country charging schemes.

Better Place has many delightful synergies. On one hand, having thousands and then millions of mobile battery units – also known as EVs – is vitally important to electrical utilities, for EVs will help smooth demand and make it much easier to add renewables to the grid. Using sophisticated Vehicle-to-Grid (V2G) communications, electric cars will be able to provide reserve power to the grid when demand is high, and recharge overnight when utilities have excess energy, and nowhere to put it. It’s also expected that when EV batteries reach their end of life, they can be employed for years at wind farms and the like as backup power supplies.

Better Place is also good for consumers, as most EVs are costly simply because lithium-ion batteries are dear. Under the Better Place business model, consumers will buy their EVs, but rent the batteries and pay a monthly fee, much like graduated cell phone plans, to recharge them. When gasoline prices start climbing again, perhaps as early as next year, it will be much cheaper to drive an EV.

Of course, Better Place is good for the environment, even when coal-fired power plants are used to recharge an EV’s batteries, although, admittedly, that’s not ideal. Initiatives like Better Place will improve the air in our cities, and cut medical bills substantially.

So the Better Place revolution is real, but it’s hardly the only way to go. It might not even be the best way. Many analysts think that plug-in hybrids make a great deal more sense than all-electric cars for the foreseeable future. And certainly governments would be wise to invest heavily in public transit, to make it fast, convenient and comfortable for people to leave their cars at home – even when that car is electric. Finally, the Agassi plan to create complex battery swapping stations seems needlessly complex and expensive when the technology to build efficient fast-charging sites is already upon us.

Nevertheless, Better Place has changed the name of the game. Shai Agassi has opened the flood gates and created a business model that is good for beleaguered industry, good for consumers, and good for the planet.

And that’s why we’re paying attention.

Richard is a writer and editor based in Halifax, Nova Scotia who specializes in clean technology and climate change. He's the founder of One Blue Marble, a climate change activism blog and web site.

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