The financial collapse of electric-car venture Better Place Ltd., which filed for liquidation over the weekend, is a blow for French automotive group Renault SA, RNO.FR +2.37% which helped the Israeli company develop its novel battery-switching system for electric cars.
Founded by Israeli entrepreneur Shai Agassi in 2007, Better Place developed a system where electric-car owners could drive their vehicles into a network of stations around Israel ILCO.TV +0.05% and replace the car's battery with a new one in about the same amount of time it takes to fill a gasoline tank on a regular car.
The "quick drop" system was supposed to remove one of the main obstacles to the adoption of electric vehicles, namely the several hours it takes to recharge a flat battery.
Renault CEO Carlos Ghosn had championed Better Place's technology as one of the pillars of the French auto maker's ambitious €4 billion ($5.17 billion) electric-vehicle strategy. The first cars equipped with Better Place technology were Renault Fluence Z.E. sedans.
MyDrive's Ash Davies takes a close look at the current state of the electric car and the network that could very well bring them to the public. Working with the new Nissan Leaf and Better Place, this film looks into the revolutionary technology that could finally make the Electric Car make sense.
The National Convention Centre, Canberra, is the first conference centre in Australia to pioneer the installation of electric car charge spots.
In partnership with leading electric car charge network Better Place, the National Convention Centre has installed two permanent charge spots in its car park for electric car drivers to use. Drivers can plug into the charge spot and top-up their battery whilst enjoying the conference centre’s various facilities and event spaces.
Four electric cars can charge at once using the spots at the National Convention Centre, which is managed by IHG (InterContinental Hotels Group).
“The National Convention Centre is committed to helping our visitors make a positive contribution to environmental sustainability,” National Convention Centre manager, Cindy Young said.
“Reducing carbon emissions is not just a global issue; it’s a local issue too. Installing charge spots for electric car drivers supports our commitment to sustainability, and enables us to offer a leading-edge service for visitors that can also help to reduce pollution and emission levels in Canberra,” Ms Young said.
Within a few weeks, charge spots where drivers can plug in their vehicles will be installed. Twelve foundation members have signed up to work with Better Place Australia in Canberra, including the ACT government, ActewAGL, Lend Lease, Crowne Plaza and the ACT Electric Vehicle Council.
"We chose Canberra because there are a large portion of two-car households with garages," Better Place Australia chief executive Evan Thornley said. About 54 per cent of Canberra households have two cars or more and 89 per cent have off-street parking, which makes it ideal for Better Place to launch, because garages are preferred charge spots.
"Canberra is the first stage in the process of delivering electric cars around Australia and having the facilities in place to service them," Mr Thornley said. Better Place recently signed a deal with ActewAGL, worth $60 million over 10 years, to purchase 100 per cent renewable energy for the electric car-charge network in Canberra. "We will be paying for everything besides the car," he said. The battery, the charging, plug-in and so forth. Consumers will just have to pay us a single membership fee and that will be determined by the distance people drive."
The Renault Fluence ZE, a five-seat family sedan automatic with a top speed of 135km/h, is expected to arrive on the local market in the middle of next year, priced between $30,000 and $35,000. Batteries will be $12,000 but the monthly membership fee is still being calculated.
"I can say that if you are paying $80 a week for petrol now, it will be cheaper to have an electric car," Mr Thornley said. "The reality is that petrol costs are increasing and battery costs will decrease as more people purchase electric cars. Therefore, it will only become cheaper to buy an electric car and run one."
Property giant Lend Lease invested $10m in Better Place Australia in 2009 and has helped to construct some of the infrastructure for the rollout.
Better Place and Renault today announced they are expanding their global partnership by bringing the world’s first mass market, zero-emission car with a switchable battery to Australia. As part of the agreement, the two will jointly commence a marketing campaign for the Renault Fluence Z.E. in Australia leading up to launch in 2012.
“Today marks the natural next step between Better Place and Renault and builds on nearly four years of close collaboration between the two companies. Under this agreement we are giving Australian drivers access to fully electric cars and a ubiquitous charge network that present a real alternative to the tyranny of petrol prices. Together, Better Place and Renault are taking a critical step to accelerate the transition to sustainable transport in a large country like Australia”, said Evan Thornley, CEO of Better Place Australia.
When combined with the Better Place electric car charge network, the Renault Fluence Z.E. is the first mass-market, electric car with unlimited range. It gives Australian drivers the same freedom they enjoy with a petrol car, but with zero oil and zero emissions.
Under the agreement, Renault Australia will import the Fluence Z.E. and Better Place will provide the electric car charging network that makes the car more convenient and affordable for the mass market. Customers will buy the Fluence Z.E. from Renault and sign up for a Better Place membership package tailored for their driving needs. ...
Better Place has announced its plans to begin rolling out its electric car charging network in Canberra from later this year, with a progressive national rollout to follow. By 2013 Better Place will give Australia the largest electric car charge network in the world, which is expected to outpace current deployment plans in market-leading countries including the US and China.
Better Place has committed to purchasing 100% renewable energy for its network in Australia.
SHAI AGASSI: We're at the Better Place centre in Tel Aviv.
REPORTER: And what happens here?
SHAI AGASSI: This is where people actually come to experience driving. You can actually see these guys - they're walking in right now.
TOUR GUIDE: Better Place centre is the first centre in the whole world that presents a complete solution for electric transportation.
The visitor's centre is built on the site of an old oil depot, and the irony is intentional.
TOUR GUIDE: In a symbolic way today we spread a new concept to the world coming straight from here.
Over 75,000 people have toured the facilities since it opened a year ago. They've all come to see Shai's solution to what's been the electric car's biggest problem.
REPORTER: What about the range anxiety people have, of worrying that the battery might go flat?
SHAI AGASSI: Well, I think if you have a fixed battery electric car, you should be worried. You're tethered to your home.
REPORTER: So this is a car which comes with a battery.
SHAI AGASSI: We actually address that with a switchable battery electric car.
It might not look like much but this is the heart of Agassi's solution.
SHAI AGASSI: We brought in a disruptive thought that you're not bound to your battery, you're not bound to the range of that battery. You can exchange the battery and keep going.
TOUR GUIDE: With your card you will be recognised with your car. It will take you to the spot where the battery will be switched and your car will be washed.
Instead of spending hours recharging, customers will drive into a switch station and swap the depleted battery for a fully-charged one.
TOUR GUIDE: We use this switch station if you go a long distance - If you want to go very far.
It takes less time than it takes to refuel a petrol car thanks to a mechanism adapted from the one that holds the bombs in place on F-16 jets. By the end of the year they hope to have over 40 switch stations across the country.
SHAI AGASSI: The switchable battery electric car allows you to use all the batteries that are on the road. Any location you are in has a GPS which tells you how far you are from your next location and from the next switch station, it gets away from the anxiety, you actually, you're always aware of where you are and whether you'll make it to the next stop. It becomes almost second nature not to think about it.
At the Frankfurt Motor Show two years ago, Renault agreed to mass-produce an electric vehicle with a switchable battery. They committed to making 100,000 cars named the Fluence- ZE.
SHAI AGASSI: It's the first mega-deal for electric cars in history. There has not been a car since the Ford Model T that has been sold at 100,000 volume, driving on anything other than gasoline. If you'll look back at history, today was the beginning of the electric era and potentially the end of the oil era.
Sometimes people have to remind you to aim high. Most of us are afraid of aiming high for fear of failure and our biggest failure is that we aim too low.
He's certainly aiming high with plans to open his networks of Charge Spots and Switching Stations across the globe. The roll-out has already begun in Denmark, Hawaii, Japan, and Canada and will soon becoming to Australia.
SHAI AGASSI: This is the Network Operating Centre. This is the hub, the backbone if you want of running a network around a country. Somebody needs to manage that the current is coming in, nobody ran over a spot, there are no emergencies, and so you need to run it as a utility. That's what we've built here.
REPORTER: But this is very small!
SHAI AGASSI: You know, from this centre we can actually manage any network in any country. Guys, can you put a map on the screen, Israel, Denmark, any of the countries that are running?
Thanks to Shai's computing background, the system will be able to balance the demand across the power grid as well as micro-manage its customer's needs.
SHAI AGASSI: When you come in it knows that you're a certain distance from home, how much battery do you need, what time it is based on that, are you at work, what's the probability you'll need to drive it in the next few hours, all that information is used by the computer inside the car to give us a priority rating on your need for charge right now.
TOUR GUIDE: To get to 100% battery capacity we need to charge for 1hour and 42 minutes.
Electric car company Better Place has unveiled the pricing of its subscription packages ahead of the rollout of the world's first nationwide battery-charging grid. The company said Tuesday the base price for its flagship Renault Fluence Z.E. electric car will be 123,000 shekels, or $34,670.
It will offer various subscriptions depending on how much a user drives. Monthly costs will range from 1,090 shekels ($310) for 12,000 miles (20,000 kilometers) a year up to $450 for 20,000 miles (30,000 kilometers) a year. The company said it will also be offering a three-year package offering unlimited mileage for 157,500 shekels ($44,530). The company says the overall costs are up to 20 percent lower than a gasoline-powered car.
The Renault cars are to go on sale in Israel in August.
Better Place opened today, together with its partner Renault, Europe’s first Better Place center. Visitors will now be able to experience sustainable mobility and will have the opportunity to place an order for a Renault Fluence Z.E. with the Renault staff and sign up with the Better Place team for a subscription of mobility services – conveniently packaged for consumers, fleet managers and the public sector.
The Fluence Z.E. “Prime Time” launched in Denmark from 205.000 DKK (€27.496), including VAT, and Better Place will offer consumers a choice of five, fixed-price, packages based on kilometers driven. For drivers who drive more than 40.000 kilometers per year, Better Place offers a fixed-price package of ‘all you can drive’ kilometers for 2.995 DKK (€399) per month, effectively giving drivers of the switchable-battery Fluence Z.E. unlimited driving range and unlimited kilometers in Denmark in an era when oil prices are at a two-year peak and rising.
For drivers who drive fewer than 20.000 kilometers per year, the fixed monthly price offer ranges from 1.495 DKK (€199) to 1.895 DKK (€249). Each subscription includes a one-time fee of 9.995 DKK (€1.341) for the installation of a private charge spot so that drivers can safely plug in at home. Initial delivery of the Renault Fluence Z.E. with Better Place mobility services will occur in the fourth quarter of this year.
The Renault Fluence Z.E. “Prime Time” will include, as standard features, climate control, navigation and energy management services via the in-car software system, radio-CD, alloy wheels, electric mirrors, 4 electric windows, central locking, a state-of-the-art lithium-ion switchable battery and many more equipments.
The car will offer Danish drivers a range of up to 185 kilometers, measured on the New European Driving Cycle (NEDC) with a fully charged battery. Actual range is virtually “unlimited,” thanks to the convenience of switchable battery technology that will enable drivers to “refuel” their Fluence Z.E. in under five minutes in the Better Place network of battery switch stations.
Shai Agassi, the founder of Better Place, the most sophisticated electric-car enterprise in the world, projects the ebullient confidence of a man facing a giant wave of money. "Within less than this decade the No. 1–selling car in the world will be the electric car," he says. "It's the biggest financial opportunity the world has ever seen. We're seeing a $10 trillion shift in an industry in less than a decade. It's the Internet, and add another zero."
In the introduction to Start-Up Nation, Dan Senor and Saul Singer's best-selling paean to Israeli innovation, Agassi was the soft-spoken software wiz who had a brilliant idea and a terrible time locating a backer. That doesn't seem to be a problem anymore. "Not when you've digitized the most expensive molecule on the planet," he says. "We've digitized oil." He pauses. "I'll put it this way: We have people from China here." (Read about how China can take the wheel on electric cars.)
The People's Republic has been busy creating a bourgeoisie, and the middle class does like to drive. Beijing's next five-year plan foresees at least 170 million new vehicles, or perhaps twice that, according to Agassi. The lower estimate alone is as many cars as there are in Germany, France, Spain, Italy and Britain combined. The 8 million barrels of oil that would be required every day to fuel them is about as much as the U.S. imports every day. "Do you know what the price of oil will be in five years if they're not using electric cars?" Agassi asks.
Enter Better Place, the start-up that makes more than electric cars. It also makes an entire infrastructure intended to free automobiles from the stubborn limits of battery life. When the enterprise launches in Israel later this year, drivers should be able to travel anywhere in the country in cars with a battery range of 100 miles (160 km). If they set off from Tel Aviv to the Red Sea, a journey of 200 miles (320 km), they will be able to pull into a Better Place station along the highway and exchange their low battery for a fully charged one. The process should take about five minutes. Otherwise, the car can recharge overnight via a plug that snaps into the little door above the rear wheel where gas would go if the car burned gas. The vehicles can also trickle charge in parking lots where the company's distinctive blue-topped posts are located.
Everything you need to know — the locations of switch stations and charging posts, the number of motorists already there, your own distance from each — is visible on a dashboard GPS screen. Employees have been testing the system for weeks, seeing, for instance, how much juice it takes to drive from Tel Aviv to Jerusalem with a car full of fat people, a carload of skinny people or just a car. By July, Better Place expects to begin taking individual orders for the Turkish-made Renault Fluence Z.E. (for Zero Emission), a four-door sedan that looks like any other car. Ordinary Israelis could be driving them as early as November.
Perhaps it’s the tedium of traffic gridlock or our unreliable trains but transport seems to inspire utopian visions like few other of life’s chores.
Take the much-hyped “Segway personal transporter” and the miracle fuel cell that’s been promising to revolutionise transportation for a generation.
Now it’s the turn of the electric car - or rather, the return.
A century ago, more than a third of the motorcars on US roads were electric-powered. Then along came Henry Ford and his Model T, and the combustion engine has dominated ever since.
Electric motors, though, had advantages that remain today: zippy acceleration, mechanical simplicity, no exhaust and quiet operation.
Rapid technological advances, meanwhile, are overcoming some of the past limitations of battery technology – cost, range and recharge time. Add soaring petrol and diesel prices, and the era of mass electric car may finally be nigh.
“If you spend more than $80 a week on petrol, your next car will be an electric car,’’ predicts ex-internet entrepreneur Evan Thornley. “We think that of new car sales in 2020, about 25 per cent will be electric.’’
Thornley parked one fortune when he became the first Australian to list a company on the Nasdaq stock exchange – LookSmart - in 1999. In 2008, he quit Victorian state politics to chase another when he became chief of the Australian operations of Better Place.
The company is building plug-in points and other key infrastructure to serve an expected surge in electric vehicle (EV) demand.
Rivals in Australia include ChargePoint, which debuted last May with Australia's first public plug-in point and has some 30 installed now.
“You’ll find the uptake much higher than many expect,” says ChargePoint chief executive officer James Brown, adding that industry momentum is picking up towards an “inflection point”.
Carbon debate in overdrive
Better Place's local debut will come in Canberra later this year – just as the carbon tax debate enters overdrive.
Thornley welcomes the Gillard government’s plan to tax carbon emissions but doesn’t expect a big impact on his business.
‘’The economics of batteries and renewable energy are just overwhelming versus petrol,’’ he says. “But obviously, as governments move to put a price on carbon, that will lead to a further increase in the cost of dirtier energy sources and therefore a greater competitiveness for clean energy.’’
Better Place estimates energy costs for electric cars is 2-3 cents per kilometre, compared with 10-15 cents/km for petrol-powered cars, depending on the model.
Any carbon price would widen the gap - provided the electricity comes from renewable sources.
Better Place will start serving Canberra customers early next year once it’s installed sufficient plug-in points in car parks so drivers can recharge away from home. The company will open switching stations that allow drivers to swap depleted batteries with fully-charged ones by June 2012.
Sydney and Melbourne will see similar roll-outs in 2013, with a network covering 80 per cent of Australia by that year’s end.
ChargePoint is also starting small, with about 300 registered customers so far - not all of them active. Firms face a “chicken and egg” issue, since they need to invest in recharging points ahead of EVs' arrival, says CEO Brown.
Better Place, the leading electric vehicle (EV) services provider, today announced it will support the Victorian Government’s ‘Victorian Electric Vehicle Trial’.
Launched today, the trial is designed to establish Victoria as an EV friendly state ready for the mass adoption of electric vehicles.
As part of its involvement, Better Place will provide charging infrastructure to support extended range driving and the smart software and systems to intelligently manage EV charging through the electricity network.
Better Place will also provide in-car management software capable of providing real-time information on odometer readings, vehicle locations and battery state of charge to inform trial operations.
Better Place will bring invaluable experience to this trial learned through its electric vehicle deployments in Israel and Denmark.
Alan Finkel, Chief Technology Officer for Better Place in Australia said, “This is a very exciting moment for us and a real milestone in the evolution of EVs in this country.
Better Place today announced that it has extended its switchable-battery electric vehicle (EV) taxi pilot in Tokyo to operate through the end of the year. By extending the trial, Better Place will be able to further evaluate and optimize the design and integration of the components of the system including the battery switch station (BSS), the EV taxis, battery performance and charging as well as driver behavior and consumer acceptance.
The current trial is part of a program run by the Agency for Natural Resources and Energy of Japan’s Ministry of Economy, Trade and Industry (METI). The pilot project began on April 26, in cooperation with Nihon Kotsu Co., Tokyo’s largest taxi operator, and focuses on the feasibility of battery switch as means for taxis to have instant, zero emission, range extension. The extension of the program has received approval from the Ministry’s Agency for Resources and Energy, which will maintain its continued role in the project. Operations are to be temporarily suspended during August so that EV battery and onboard vehicle data can be analyzed and will resume again on September 1.
“Up to this point, there has been very little information about how an EV battery will perform in heavily used, real-world, taxi conditions. This program has provided us with critical insights into the battery performance in a switch model and switch station performance for the toughest customers – taxi drivers,” said Kiyotaka Fujii, President of Better Place Japan. “By extending this program, we hope to gain further insights into the battery performance and durability of the switch station itself, which will be invaluable as we move towards commercial launch later next year in Israel and Denmark.”
While a comprehensive analysis of the data is still being conducted, some initial data points about the taxi project include:
• 40,311 number of kilometers driven • Taxi drivers went through the switch station 2,122 number of times, many of which included one-off demonstrations for the hundreds of visitors who came to the center to experience the swtich • Average switch time 59.1 seconds • 3,020 passengers have ridden in the taxis
It’s an ill wind that doesn’t blow someone some good. So the wannabe electric car industry sees the Gulf of Mexico oil well disaster in a different light to others.
Reports from the US say shares in battery companies and other EV component manufacturers have risen on the back of Barack Obama’s call for the monster spill to “drive a clean energy future".
Just how much the industry could benefit is illustrated by a forecast from American analysts Needham & Co that the market for lithium-based batteries could grow from less than a billion dollars next year to almost $US25 billion in 2015. Other analysts argue that high initial vehicle prices, limits on battery performance and constraints on rolling out recharging infrastructure present high hurdles for the EV business.
Here in Australia there is another driver for a shift to electric vehicles: the transport fuel trading deficit is officially forecast to rise from $16 billion a year now to $30 billion by 2015. Antony Cohen, chief financial officer of Better Place Australia, says the logical approach to the problem is to “stop using the stuff” rather than relying on accelerating other energy commodity exports to bridge the fuel gap and shifting to alternative sources of diesel.
EVs do not offer a quick fix, however. Cohen acknowledges that replacement of Australia’s 12 million passenger cars and light commercial vehicles will take 20 to 25 years, moving in to a higher gear mid-decade and mostly happening after 2020.
Cohen, previously KPMG’s leading energy consultant, sees an interesting nexus between the introduction of EVs and promotion of still-greater use of renewable energy in Australia. He estimates the 12 million vehicles will need about 36,000 gigawatt hours of electricity a year, equal to about 12 per cent of current power consumption. This, he suggests, could provide the impetus for a second-phase RET, coming between 2020 and 2030 (a time when the present scheme is designed to plateau at an initial 41,000 GWh).
What’s more, he points out, going down this road, using EV batteries for storage, teamed with a capability to manage the charging times through smart technology, could enable greater use of intermittent renewables in the generation mix rather than building, for example, more and more open-cycle peaking power gas turbines. (It is estimated that the current RET will require about 4,000 MW of open-cycle generation to be built this decade.)
“You get big emission reductions thrown in,” he tells me. “Probably about four tonnes of greenhouse gases per vehicle per year. And you don’t need a carbon charge, although imposing one on petrol obviously would accelerate EV adoption.”
Cohen has answers to the obvious barriers to this happening – such as consumer refuelling convenience and the capacity of the power grid to cope with mass recharging. Better Place, he says, will install charge spots and battery switch stations. Refuelling will be more convenient than finding a service station to buy petrol.
“Provision of a service that includes charge spots at homes and work places and battery switch stations as well as all of the renewable energy for a monthly fee,” he argues, “will ensure that the trade-off between capital costs and recurrent costs will not be an issue.”
Peak power problems will be avoided by smart systems that will recharge near-empty vehicles at once but delay supply to, say, three-quarters charged ones to times when overall demand is low.
Better Place has set up shop in Tokyo to stress test their battery swapping equipment. The pilot program will allow the start-up company to work out the kinks in the technology before opening their first battery swapping station in Israel.
A test swapping station is located in the Roppongi Hills section of Tokyo and it will service three electric cabs (all Nissan Dualis compact SUVs) from taxi company Nihon Kotsu's fleet. While Better Place's fully-operating swapping stations will accommodate many types of batteries, the 90-day pilot program will focus on just one battery and car type.
The testing will help the company to make the technology more efficient and ensure it can hold up to real-world demands.
The automated swapping station can switch out a battery for a new one in less than a minute.
BETTER Place Australia CEO Evan Thornley says the electric vehicle infrastructure company will prove sceptics wrong by ‘building it’ rather than ‘dreaming it’ when it starts rolling out its battery-swap and recharge stations in Australia, starting in Canberra in 2011.
Mr Thornley said Better Place was well advanced on its network plan for battery switch sites around the country, with at least one “in key districts and then more detailed site acquisitions to occur” as the rollout of EVs gathered pace.
“Most of those will occur in the second half of 2011 or early in 2012,” he said.
Speaking in Tokyo at the opening of Better Place’s world-first taxi battery swap station, Mr Thornley said he had overcome every obstacle put in his way.
He said opponents of Better Place’s pledge to ‘rid the world’s addiction to oil’ only had fear, uncertainty and doubt to rely on, and the company had continued to grow and attract investment, despite the global financial crisis and the massive trough the world’s car industry was in.
The company believes this momentum will continue as more Australians grasp the fact that – based on average mileages for vehicles – it will actually be significantly cheaper to switch from fossil fuel to electricity when mainstream EV sales commence. ...
Accessing ‘clean’ electricity that does not require brown coal or other carbon-releasing methods to make it is also one of Better Place Australia’s core goals.
Mr Thornley – a former Victorian Labor politician – explained that although wind power would probably be the company’s primary electricity source for Australia, the fact that it can come from a variety of generators without impacting the EV infrastructure or the car itself was another benefit.
These other sources will include geo thermal (“certainly if that is brought to industrial scale”), solar thermal, and clean coal technology “if that comes good”.
“We certainly don’t see the availability of premium electricity as a barrier at all,” he said. “We are very confident about plenty of renewable electricity being available.
“That’s an important point about EVs – your energy source is independent. You can move from one form of zero emissions electricity source to another without a single dollar of new investment in the car fleet or the charge network.”
However, Better Place Australia would not comment on whether it supports nuclear power sourcing.
“That’s not for us to comment. If the community decides that is the path it wants to go down, then it does. We are not in the business of advocating one way or another,” Mr Thornley said.
“We see plenty of zero emissions energy sources available today – and on a practical matter there’s not a snowball’s chance in hell of any nuclear power being available in this country within the next 15 years anyway, so if or when it happens we will deal with that then.”
Three electric cabs began a 90-day trial in Tokyo on Monday that officials and the company involved say could eventually lead to the electrification of the city's entire taxi fleet.
The cabs run on lithium-ion batteries that can be changed in less than one minute with a fully charged one. The charge starts running low after 300 kilometers (190 miles), according to Better Place, the California-based electric-vehicle services provider that's part of the government-backed project.
There is only one such "switch station" in Tokyo now, and the city would need 300 for the entire fleet of 60,000 cabs on Tokyo streets -- more than New York, London and Paris combined -- to go electric, said Better Place Chief Executive Shai Agassi.
He said the move to electric is inevitable because the burgeoning number of cars in countries like China is sure to push up oil prices while the price of electric vehicles is sure to come down like flat panel TVs.
"There is no other alternative," Agassi said at an opening ceremony.
Can three cents be transformed into billions of dollars?
That's the big question when it comes to Better Place, the well-funded start-up that wants to put people into electric cars. Driving a gas car costs about 12 cents a mile when gas costs $3 a gallon, says Jason Wolf, vice president the company's North American division.
Electricity, on the other hand, costs about 3 cents a mile: a kilowatt hour costs around 12 cents and a car can go around 4 miles on a kilowatt hour. A battery for an electric car, meanwhile, will cost around 6 cents a mile over a 200,000 mile lifetime.
Since Better Place says it will supply the electricity and batteries to consumers, the company has a margin of 3 cents per mile (12 cents minus 9) before potential customers complain about the higher cost of going electric. Granted, 3 cents doesn't sound like much: I harvest more loose change than that every time I do laundry. And Better Place proposes building thousands of charging stations, hundreds of battery swapping stations, and devising software so these cars won't crash the grid when charging.
But look at it from another perspective. There are around 200 million drivers and 254 million vehicles in the U.S. and insurance companies say the average person drives 12,000 miles a year. That comes to 2.4 trillion miles, or $72 billion of potential three-cent transactions per year. Even one percent of that would probably placate investors. And in Europe and Asia, higher gas prices boost that 3 cent margin to 9 or 12 cents. Additional revenue can come from selling semi-depleted batteries to utilities, which isn't part of the above calculations.
And with the battery separated from the car, the down payment and resistance toward going electric goes way down.
"When you buy a Toyota, you don't buy eight years of gasoline," Wolf said. "You take out the battery and now you have a much, much cheaper car."
Big math problems like that, along with their inherent uncertainties, make Better Place one of the more intriguing companies in greentech today, or in any market, for that matter. In a short period of time, the company has joined the ranks of Google, Apple, Microsoft and Tesla Motors as a subject of endless debate and speculation. How did they raise over $700 million? How much have they spent? Will car dealers and manufacturers work with them?
Evan Thornley how does the deal with RACV work, are they just buying a piece of Better Place?
EVAN THORNLEY, BETTER PLACE AUSTRALIA: Yeah, well it's a strategic partnership, the RACV obviously represents 2 million motorists in Victoria and they're very excited about the transition to electric vehicles so we'll be working with them in roadside assistance, we'll be working with them on a range of strategic projects but they are also putting their money where their mouth is and making an investment in the company.
ALAN KOHLER: How much do they get for $2 million?
EVAN THORNLEY: Oh, well we don't talk about valuation Alan but I think it's part of the wider trend that we are seeing. Obviously we've raised our first round in Australia, led by Lend Lease. ACTEW AGL, our utility partner in Canberra, is also an investor.
And that's part of what we are seeing globally. Better place globally has raised about $US700 million in the last two years through the middle of a global financial crisis. ...
ALAN KOHLER: What do you think the market in total is going to be in supplying electricity both batteries and so on to cars?
EVAN THORNLEY: We think it's somewhere between 10 and 20 per cent of the Australian car fleet by 2020 will be running on electric.
So that means probably a larger proportion of the petrol market because the cars that are most likely to be most attracted to going electric are the large ones, the people who drive around the outer suburbs of Australia in our large cities, they've got three, four, sometimes five, six thousand dollar petrol bills.
If you can replace that with a $1000 worth of renewable electricity and cover the capital cost of the battery then that's a pretty attractive financial proposition.
ALAN KOHLER: I suppose as a sidelight that's not great news for Australian manufacturing since most of the large cars are made here and it doesn't look like the electric cars will be made here?
EVAN THORNLEY: Well I hope that they will Alan, I think it's an enormous opportunity for the Australian car industry and the Auto Innovation Council which is a representative body of the whole industry recently put out a vision statement saying that they thought that Australia should be one of the world's leading producers of large, powerful, zero emissions vehicles.
I think they're right, it's what customers want in this country, it's what we know how to build, it's where the money is, there's much more margin in large cars than small cars and there's certainly much more money in the energy for large cars than small cars and I think there's still a global leadership position open in the large car market so we think that's - and obviously others think - that's a tremendous opportunity for the Australian car industry and I hope they take it up. ...
ALAN KOHLER: And when are you going to start rolling these things out, when are you going to start doing it?
EVAN THORNLEY: So we will be building the infrastructure (obviously there are car makers across the world making electric cars, we don't make cars we provide the infrastructure for the energy) we'll start in Canberra in late 2011, Canberra and southern New South Wales to do our first roll out and then we'll be rolling out throughout the country starting late 2012.
ALAN KOHLER: And will there be cars on the market here, electric cars?
EVAN THORNLEY: Absolutely. I think there's 51 models currently that are scheduled to be in production in terms of plug-in vehicles around the world by 2012.
It's one of the largest venture capital deals in the history of cleantech, as the company itself described it, but it isn't the largest.
Palo Alto, Calif.-based Better Place today announced in a press conference that it secured $350 million in a series B round led by HSBC Group that values the company at $1.25 billion. ...
While a large round, the largest deal on record to date in cleantech was a follow-on round to Europe's Airtricity, according to Cleantech Group data available to clients.
In the third quarter of 2006, investors put the equivalent of $394,835,000 USD into the Dublin, Ireland-based company, banking on the company's wind farm projects.
ALI MOORE, PRESENTER: After one of the toughest years in its history, the global motor industry is pinning its hopes on a new generation of electric cars to get back in the black. An unprecedented range of all electric models will be unveiled at this year's Frankfurt Motor Show, which starts tonight. Next year, Mitsubishi launch the first mass-produced electric vehicle in Australia, and the ACT is already expanding its electricity grid to accommodate the recharging of electric cars. But it's not just the big names trying to get a share of the action. Thea Dikeos reports.
EVAN THORNLEY, BETTER PLACE AUSTRALIA: I think the electric vehicle is going to be the biggest industrial transformation of our generation.
ROBERT MCENIRY, MITSUBISHI MOTORS AUSTRALIA: The global demand is quite extraordinary. The speed with which the interest in electric vehicles has accelerated is quite interesting and really quite staggering.
THEA DIKEOS, REPORTER: The technology has been touted for decades, but now, with fears of climate change and the skyrocketing price of oil driving consumer demand, big carmakers are finally embracing the electric alternative.
EVAN THORNLEY: I think if you look at where all the major car manufacturers are going, that's clear; if you look at the position of the Obama administration in the US, if you look at the position of the Chinese Government. So that's the two biggest markets in the world; they've basically signalled that they are moving electric and quickly.
THEA DIKEOS: Next year, Mitsubishi will be the first major manufacturer to roll out an electric vehicle called the i MiEV on Australian roads. ...
At the Frankfurt Motor Show on Tuesday, Better Place, which builds electric-vehicle charging networks, is expected to take the wraps off a software platform that tells drivers when and where to charge their batteries, while giving utilities the ability to manage the impact of tens of thousands of vehicles tapping into the power grid. ...
The car’s on-board software system, which Better Place calls AutOS, will run on Microsoft’s Windows Embedded software on an Intel Atom processor. A video display will tell drivers how far they can drive and the location of the nearest charging post or switch station. ...
The software rollout comes as Better Place faces competition from other electric car networks, including Coulomb Technologies and Ecotality.
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