September 18, 2008
Why Shai Agassi’s Electric Car Will Succeed
The founder of Better Place explains why the time is right for electric vehicles to become a mainstream reality.
When Thomas Friedman calls you the “Jewish Henry Ford,” you better be ready to pull off something big. Shai Agassi plans to do just that.
The former SAP executive and current CEF Advisory Board member plans to bring the dream of electronic vehicles to reality. His company, Better Place, will provide the energy and infrastructure that will enable consumers to begin to view “transportation as a service.”
Better Place is working closely with governments. The firm is launching its efforts in Israel and plans to launch a program in Denmark as well. The electricity will be provided by renewable sources such as solar and wind power.
Agassi spoke with The EcoInnovator about the four factors that will enable adoption of electric vehicles and why this time, consumers are ready to plug in.
The EcoInnovator: Why do you think efforts to launch the electric car have failed before?
SA: To this point the adoption of EVs has been slow because the consumer has always been asked to sacrifice on something with regards to the car: price, performance, design, etc. For electric cars to be adopted by the masses they need to meet specific requirements so that the consumer does not have to sacrifice anything. The cars need to be full size, high performance, affordable and convenient to keep charged.
Consumer demand for sustainable transportation has never been stronger than it is today. With skyrocketing oil prices and an increased awareness of global climate change, consumers are acutely aware than ever of the role they need to play in end oil addiction. In addition, advanced battery technology now exists, which wasn’t the case years ago. This makes electric cars less expensive and able to drive up to 120 miles without a charge which makes them practical for the general population.
The EcoI: How will your initiative differ?
SA: Broad adoption of electric cars requires four things:
1. Electric cars produced by major car companies that are comparable or superior to what consumers are used to;
2. Safe and affordable batteries with a reasonable driving distance between charges;
3. Exchangeable battery stations and easily accessible charge networks; and
4. An affordable business model that makes electric car ownership affordable.
This is how Better Place will approach making electric vehicles a reality for consumers around the planet.
Critically, Better Place is forging close ties with governments, utility companies and auto manufacturers to make sure the right financial incentives and polices are in place to make electric transportation a reality.
The EcoI: What would be the benefits to society if the electric car were to become widely accepted?
SA: The dollars that leave nations to buy oil can now be funneled back into national and regional economies to create new jobs. The US, for instance, spends nearly $600 billion annually on foreign oil, which poses a threat to national security in addition to sending dollars out of the country.
Most importantly, the harm to our planet will be slowed. By taking cars off oil and fueling them with renewable or carbon free electricity, Better Place will significantly reduce the environmental impact of driving. Gas-powered automobiles around the world produce nearly three billion tons of CO2 into the atmosphere each year, an indefensible strain on the environment.
The EcoI: How is your company working with governments and established industry players to lay the foundation for electric cars?
SA: The Better Place model can absolutely be implemented without immediate government support. However the rate of consumer adoption will ultimately depend on government policies to make it more affordable. Governments can put in place tax incentives that reduce the price of the total cost of the electric car for early adopters.
Better Place also works closely with utility companies, such as Israel Corp. and DONG energy, and auto manufacturers like Renault-Nissan, to make the business model work. Better Place is currently in talks with over 25 countries around the world and all of the major auto manufacturers to ensure the electrification of the automobile becomes more widely adopted.
The EcoI: How will your experience as a software industry leader help you in your new venture? Are there similarities between the two roles?
SA: SAP taught me a great deal about how to run a large business and scale on global level. There is a strong technology element to what we’re doing, and it certainly helps to have that background as we grow.
The EcoI: What has the response been from the public to your plans for a company?
SA: The outpouring of support for Better Place has been overwhelmingly positive from all corners of the globe. Using Israel as an example, citizens have expressed immense interest about using electric vehicles. In a recent Geocartography survey, nearly 210,000 Israeli households declared an open willingness to purchase an electric vehicle; one in six households in the country.
With oil prices rising and driving costs rising at an exorbitant rates, and with increasing commitments from governments for EV tax incentives, widespread consumer adoption of electric vehicles is close behind.
Shai Agassi has managed to convince the
controlling politicians of several rather
energy-desperate countries (Israel and Denmark)
of the merits of his battery swapping scheme (an
old idea not original with Agassi) as the best
way to avoid petroleum dependencies. There are
severe problems with his arguments :
1) his system won’t come anywhere close to
removing petroleum dependencies - fully 1/3rd
is used for commercial trucking, boats, etc,
which won’t be covered by his system, nor
will any of the petroleum used to make heating oil,
lubricants, etc. This will be true irregardless of
which private transportation technology is adopted.
2) his tiny vehicles will not satisfy the needs
of the driving public;
3) the swapping frequency while on a trip (about every
80 minutes) is needlessly inconvenient;
4) Each highway traveller on a trip in his system requires many
battery packs in reserve every day to meet his mileage
requirements. This greatly increases the number of battery
packs the system and its overall costs. Batteries are one of
the main reasons electric cars are not practical, and his
system makes that deficiency even worse.
The battery packs muct also be located in just the right
spots.
4) Agassi’s economic arguments are only directed at gas powered
vehicles, which are NOT the main competitors his system
must face :
5) Plug-in hybrids are his main competitors, like the 40 mile
electric ranged Volt, which can accomplish every bit as
much as his much more expensive (trillions for infrastructure),
inconvenient system of tiny vehicles :
For one thing, we can electrify a lot more vehicle types
as plug-ins (e.g. large pickup trucks, vans, etc.) than we
could using swappable battery power drivetrains, which are
severely limited in their power outputs.
And we can easily demonstrate, using DOT commuter trip
statistics, that a 40 mile range plug-in fleet can avoid 94%
of current commuter gasoline requirements (97% if 1/4 of the
workers can recharge at their workplace), and probably more
than 93% overall. That range will likely be 50 miles in the near
future, which would avoid 96% and 98% respectively.
Regardless, it’s clear that any liquid fuel
requirements of a plug-in fleet can be met entirely by ethanol.
Since ethanol is more carbon neutral that typical electrical
power, Agassi’s scheme is inferior in carbon emissions, although,
quite frankly, any differences between the two systems is
insignificant and unimportant : both will achieve far more than
is required.
Agassi has simply not produced a viable, or even defensible,
technology for the electrification of the fleet. And when
batteries become quickly rechargeable, Agassi’s entire trillion
dollar system becomes instantly obsolete, whereas the current system
we have would simply find gas stations swapping out gas pumps for
charging posts as the demand irrevocably shifts from gasoline to
electricity. And since a very large portion of the electricity
used to fill those batteries will come from household outlets,
a great many of the gas stations today will disappear, making
the transportation fueling system even more efficient.
[...] you remember this VIIP post; well recently on the EcoInnovator Blog the founder of Better Place said the time is right for electric vehicles. Perhaps you think it [...]