Better Place Electric Cars Face Rocky Road of Obstacles

We need to find an environmentally friendly replacement for the internal combustion engine used to power the world’s cars that’s sustainable in the long term before peak oil sends fuel prices rocketing and to help combat climate change.

SAVE - Remise de clés de véhicules électriques à sept agents du Département
photo credit: Conseil général des Yvelines

Governments and individuals cannot do it alone, which is why it’s good to see private sector companies like Better Place stepping upto the plate with significant effort and investment to address this problem as well as related issues like reducing CO2 emissions, energy independence and creating new manufacturing green collar jobs.

I think it’s a laudable initiative but see many obstacles in it’s way with powerful vested interests like Petrol Stations and dinosaur car companies doing their best to delay or derail the switch to electric cars as they have shown in the past by killing the General Motors EV1 and more recently in rejecting the open standards battery swap/charge infrastruture model proposed by Better Place.

If peak oil hits hard and hits fast I think Australia will probably switch to gas as an interim measure because the Australian government is unlikely to give any single company like Better Place control of the entire transport sector.

Given current battery technologies are there enough raw materials in the world to switch entire countries over to publicly swapped car batteries? Would we quickly run headlong into supply and demand cost increases?

When I put this to Better Place they countered that the consumption of petrol (and hence emissions) is not even across the population. The cars that drive most often and in the most stop-start traffic use the most petrol so these are the cars that will also save the most by converting to electricity and the impact on emissions can be faster than the share of cars.

Nonetheless, real change will only be generated by mass adoption, which is what Better Place hopes to achieve with an “s-curve” of adoption with much larger scale production following the early years.

What Is Better Place?

Better Place plans to initially launch a network of electric car battery recharge & swap stations in Israel, followed by USA and Australia by 2012. It’s Australian CEO is Evan Thornley, former Victorian Labor MP and former founder of search engine Looksmart

In Australia AGL Energy will provide wind power to the recharge stations and Macquarie Capital Group is the finance advisor

The cars themselves should cost less as an initial capital expense because Better Place will own the battery and car owners will pay a usage fee per month or km driven

Issues Faced By Better Place

  • Car Maker Partnerships – of all the automakers, to date only Renault/Nissan has signed up to be a Better Place partner and manufacture compatible cars. For Better Place to work on a mass scale, don’t several big car companies need to signup to manufacture Better Place compatible cars?

    Better Place spokesperson: Renault-Nissan is one of the world’s largest automobile manufacturers and has made a strategic investment of more than $1 billion USD in electric vehicle technology. The company believes it can leapfrog over hybrid technology and predicts that 10% of the worldwide auto market will be EV by 2020.

    Better Place is in talks with nearly every major global auto maker and believes that as we continue to demonstrate progress in Israel, Denmark, Australia and other parts of the world, additional car manufacturers will agree to build electric cars with switchable batteries.

    Better Place will serve any car with a plug. Our plug in infrastructure will be open to all. We do believe that the convenience of fast range extension through battery switching will drive customer support for battery switching which will in turn drive car makers to design and manufacture electric cars with switchable batteries.

  • Charging Electric Cars – Other companies favour in home charging from the main electricity grid. How can we avoid a Betamax vs VHS, HD DVD vs Bluray style complex mishmash of incompatible competing electric car charging systems?

    Better Place spokesperson: We are working in international standards bodies to ensure standards are in place for the plug and other key elements of electric car charging systems to ensure compatibility.

    We support charging at home provided it’s done in a managed, intelligent way through software so that we harness renewable sources of energy like wind, which tends to blow at night, as well as manage the load on the grid when entire neighborhoods plug in and want to be charged all at once.

  • Scaling Speed – Initial plans involve rolling out 100,000 Electric Renault Fluence cars in Denmark and Israel by 2016.

    In China alone almost 900,000 passenger vehicles are sold every month. So surely selling 100,000 electric cars worldwide in 6 years time isn’t fast enough to make a real impact on climate change and shift transport away from a reliance on oil?

    Better Place spokesperson: First, it’s worth emphasising that the 100,000 electric cars represent a commitment by both companies to build affordable, convenient electric cars for mass market adoption – two years ahead of launch. The companies expect to offer additional models with switchable batteries so that consumers have a choice of model.

    Second, we should note that the consumption of petrol (and hence emissions) is not even across the population. The cars that drive most often and in the most stop-start traffic use the most petrol. But these are the cars that will also save the most by converting to electricity – so the impact on emissions can be faster than the share of cars.

    Nonetheless, real change will only be generated by mass adoption, which is what we are focused on achieving. We believe there will be an “s-curve” of adoption with much larger scale production following the early years.

  • Replacing Petroleum with Lithium – Earlier this year I read an article in The New York Times which brought up an important issue: “In the rush to build the next generation of hybrid or electric cars, a sobering fact confronts both automakers and governments seeking to lower their reliance on foreign oil: almost half of the world’s lithium, the mineral needed to power the vehicles, is found in Bolivia – a country that may not be willing to surrender it so easily”.

    Better Place plans to use cars powered by Lithium batteries rather than petroleum. One of the big issues with Oil is that relatively few countries control the supply – but the same applies to Lithium. How will you address this issue?

    Better Place spokesperson: There are a number of issues to respond to here. First, Lithium is widely available with significant reserves in the USA, Canada, China, Australia, Chile and Argentina as well as Bolivia. It is currently mined in Western Australia in significant quantities in an ore called Spodumene and processed in China.

    Second, it is misleading to compare oil and lithium as oil is consumed in the process of combustion but lithium is not consumed in batteries. At the end of the battery life, the lithium can be re-mined from the battery.

    Third, major forecasters such as Deutsche Bank are satisfied that sufficient production capacity and reserves exist to cope with very high levels of growth in demand. There is a good debate on availability at World of lithium

  • What Will Happen to Depleted Batteries? – The USA has made tentative steps to establishing a system to recycle lithium batteries. Will depleted batteries from Australia have to be shipped overseas for reprocessing?

    Better Place spokesperson: Lithium batteries will be recyclable. It’s not yet clear whether that will occur here or in another country.

  • Government Incentives/Subsidies – Better place is relying on government incentives/subsidies to encourage people in Denmark and Israel to buy compatible cars. The Australian federal government hasn’t shown any indication of doing this, were incentives required to do the recent deal to setup Better Place charge stations in Canberra?

    Better Place spokesperson: Governments around the world that want to encourage their people to switch from transportation systems that contribute to climate change to more sustainable models like the one envisioned by Better Place are enacting policies to encourage consumers, industry and the public/private sector to make the switch. Many of these policies existed before Better Place did.

    Our business – which is to support those EVs and their drivers with infrastructure and services – does not need subsidies to operate. Our recent announcement that Canberra will be the first roll-out in Australia was based on the attractiveness of that market and the willingness of the ACT Government and the local electricity distributor, ActewAGL, to work with us to address local planning and regulatory issues. No subsidies or investments are involved.

  • Sound Made by Electric Cars – on a lighter note, does Better place support a standardised sound for electric cars to act as a warning to pedestrians and animals and could electric cars possibly sound like Blade Runner?

    Better Place spokesperson: We actually believe that a significant reduction in car noise will deliver a huge amenity benefit to people living in built up areas. Any regulation to provide a warning noise should be balanced against this opportunity.

    With that said, I’m sure there will be all kinds of warning sounds available – if you can load a ring tone onto your phone, there’s no reason why you shouldn’t be able to load any sound you like onto your electric car.

How Does Better Place Work?

Electric cars have a Chicken & Egg issue – people won’t buy them unless there’s widespread supporting infrastructure to recharge/replace their batteries.

Retrofitting houses to fast recharge cars is ultra expensive, puts peak pressure on the electricity grid and would use household electricity sourced from coal power plants.

Better Place plans to buy the power used by their charging systems wholesale from solar energy partner companies in each country they operate in.

Previous approaches relied on a traditional manufacturing formula: We make the cars, you buy them. Agassi reimagined the entire automotive ecosystem by proposing a new concept he called the Electric Recharge Grid Operator. It was an unorthodox mashup of the automotive and mobile phone industries.

Instead of gas stations on every corner, the ERGO would blanket a country with a network of “smart” charge spots. Drivers could plug in anywhere, anytime, and would subscribe to a specific plan—unlimited miles, a maximum number of miles each month, or pay as you go—all for less than the equivalent cost for gas [petrol].

They’d buy their car from the operator, who would offer steep discounts, perhaps even give the cars away. The profit would come from selling electricity—the minutes.

Day In The Life Of A Better Place User

Evan Thornley (Better Place Australia CEO): Once the recharging infrastructure exists and the battery’s sitting in the car then, if you pay full commercial price for renewable energy, the energy costs of driving one kilometre down the road in an EV is about 1/7th the cost of driving that same kilometre using petrol.

Australia spends AU$20 billion to AU$30 billion a year on petrol, depending on the oil price and the currency. If we’re able to convert the whole fleet over then the renewable energy costs to power that fleet would be around AU$5 billion a year.

Who do we create the most value for the quickest then? The people who drive the most number of kilometres because that’s when we’re displacing the largest amount of petrol. These drivers are the most attractive for us because, when you look at the lifetime cost of a car, much of it goes into the petrol tank not the vehicle itself.

Guy Pross (Better Place Australia Director of Government Affairs): On current technology 160km is the range of an electric vehicle’s battery on a full charge. Israel is approximately that size and so too is Denmark.

We’ll electrify, say, Sydney, Melbourne and Brisbane giving drivers a 160km range around Australia’s three major cities because we can already do that in Israel and Denmark. The big difference is that Australia is a very, very large country and there’s about 1000km each between those three centres. We can electrify the Hume Highway between Sydney and Melbourne by putting in 20 battery swap stations. At about AU$10 million, that’s not a lot of money to connect Sydney and Melbourne.

FORA TV Talk: “The Electric Horizon” by Shai Agassi

TED Talk by Shai Agassi


7 responses to “Better Place Electric Cars Face Rocky Road of Obstacles”

  1. Sometimes I consider hybrids and what they are intending to do with providing these new wave type cars of hybrids to the consumer. When you consider the fact they burn gasoline, and utilize electric components to get far greater gas mileage then conventional combustion engines… it is almost in my mind like a crutch to bridge the gap to 100% electrical cars. When you think of it however. Electricity that is still needed to charge these electric cars, and there are many obstacles that have to be navigated towards our way to a cleaner and greener future.

    Don’t get me wrong though, I do like the idea of hybrids, but I just wonder sometimes if this is a corporate and government measure to get us “used” to the idea of clean and green in a gradual process.

    This is why I contemplate at times, “why?” Is Americans and our way of life “not ready” for drastic change? I think so.

  2. Infrastructure moves slowly when there’s not profit in the product yet. I think govt. needs to push infrastructure development to encourage production of the electric car…and I’m fiscally very conservative.

  3. […] are several options available, including hybrids, diesels and LPG – and you may know that purely electric vehicles (’EV’s) are coming in the next year or 2 – or maybe […]

  4. Where I live (San Francisco) there are a few charging stations being introduced, so that’s a definite start.

    At this stage, I don’t really need them as I can drive to work and back on a single charge and just plug my car in overnight.

  5. willo009

    Electric cars are becoming better and better all the time, and the performance is gaining in power also. Might not be that far in the future we all have one. I think once the Battery charging issue is addressed, and big car names catch on and start to produce electric cars more. Then without doubt this would be a great option for us all.

  6. This is an interesting discussion. I do agree that it’s becoming more and more important to find a sustainable, environmentally-friendly alternative to the internal combustion engine, and it’s good to see the initiatives different companies are taking. Hybrids have been somewhat problematic in the past but I do think as time goes on they’re improving, and this may end up being a good solution.

  7. […] I’ve previously written a detailed article about Better Place and it’s plans for […]

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