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Friday, July 08, 2011

The only place where this pays?

They're now being billed as a 'California company' but Better Place, a company that aims to put you behind the wheel of a battery-powered car actually is an Israeli company that I blogged about before here. They're now trying to solve the limitations of battery-powered cars only being able to go 100 miles before needing to be recharged, and the way they're doing it is by setting up battery swap stations throughout Israel.
Better Place is trying to solve the biggest challenge to the widespread adoption of electric cars: the limitations imposed by battery chemistry. A battery big enough to give an electric car the same range as the average gas car would be far too large and expensive; and recharging battery packs takes hours at standard outlets, compared to the minutes it takes to refuel a conventional car.

Better Place will sell a new electric sedan made by Renault that has a range of just over 100 miles on a charge—enough for most daily commutes. For longer trips, Better Place provides battery swap stations, where an automated system switches out a depleted battery for a fully-charged one in less than five minutes. Instead of owning the batteries, the car owners buy subscriptions for a certain number of kilometers of driving per year. They can choose from several plans, much the same way mobile phone owners subscribe to minutes.

The size of Israel limits the number of swap stations needed. What's more, high taxes on gas-powered cars, as well as high prices for gasoline (about $8 a gallon), should help make electric cars more attractive.

Better Place offers one package that includes the cost of the car and three years of driving 25,000 kilometers per year for $46,000. The company says this price amounts to a 35 percent savings over buying and fueling a gas car in Israel over three years. Other packages include a cost of about $36,000 for the car, with monthly subscription fees ranging from $320 to $470 a month for 20,000 to 30,000 kilometers of driving per year, respectively. For both packages, the price includes the installation of a charging station at home.
Note how expensive it is to operate a car here. Will this work anyplace else? I'm skeptical. This country's car market is unique for three reasons: First, the country is quite small. Second, our gas costs are astronomical (yes, it really does cost $8 per gallon of gas). Third, the cost of cars is driven up by outrageous customs duties (we're looking at buying a 3-year old car for about $20,000 right now - our last car only cost NIS 10,000 and lasted five years, but I shudder at what my mechanic's bills have been for the last five years). Used cars retain their value for way too long.

But - and here's the key - the cost of operating hybrids here seems much lower. I recently heard of someone who drove up north and back on 2 liters of gas. That's cheaper and faster than taking the bus. By comparison, when we rented a 2008 Toyota Corolla three weeks ago, we used an entire tank of gas (nearly $100) to travel about 600 kilometers in three days.

Oh - one other thing about the Israeli market.
Michael Granoff, head of oil dependence policies at Better Place, says the company has 20,000 individual customers on a waiting list to buy the cars, and 70,000 tentative orders from fleet customers. "That's nearly half the car market for Israel," he says.
I think the car market in Israel is quite a bit larger than that.

I'm not sure that ultimately battery only is the way to go. People look for the cheapest way to operate car. Unless it's cheaper and/or gets them there faster, they won't use it (which is why public bus transport here in Israel is mostly used by those who don't have cars - it takes forever). I'm not the only skeptic.
Menahem Anderman, founder of Total Battery Consulting, says most major automakers don't think the approach is promising. The swap stations will cause wear and tear to the batteries, he says, and the economics may not prove as attractive as Better Place claims. For example, he says, the prices consumers pay will need to cover the cost of not only the batteries in the vehicles, but also the ones stocked in swap stations.
Hmmm. I have to wonder whether the Israeli market is uniquely suited to this because of the factors I described above.

By the way, for those who have forgotten, I represent high tech companies....

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At 10:50 AM, Blogger NormanF said...

Its a promising model... but the monthly subscription isn't the way to go. A six month or per year model would work better. And it would be low enough to get people to ditch conventional cars for good.

If they can solve the affordability issue, it may be very attractive. And I know they can do that in Israel. Innovation is the key!

At 12:03 PM, Blogger Unknown said...

Instead of buying the car why not put electric car rentals in the main cities?It might be cheaper for a compagny to buy a large number of electric cars,set up their own charging stations, then rent them out on a daily or hourly base.

At 4:37 PM, Anonymous Anonymous said...

Carl, how do feel about driving around in a Renault? Better Place and Renault are introducing the Renault Fluence Z.E. in Australia too.


At 5:52 PM, Blogger Sunlight said...

I've been driving a Prius for 5 yrs. It started at 50 mpg. Then last year dropped to 41 mpg. The mechanic got me to start using the injector cleaner and now I'm back to 48 mpg. One of the main issues I would have with the plug in charging (onto the grid) is that our grid is mainly coal. Coal gets better as we go along with the scrubbers, but is still pretty gross. So using the electric (also charged by inertia onto a secondary electic motor, which sounds like a golf cart when it is all that is running) as a supplement to the regular gas engine is still my preference. They say battery production and disposal is actually another mess, so Better LIfe spewing batteries to increase range may be worse. And you guys have your natural gas now... I would go for a setup like my Prius, but with a natural gas engine. However, we did find out last winter during a cold snap that, even though we are a natural gas producing state, if the (a?) supply running to our state from Texas gets interrupted, we lose power. The grid seems to have an unintuitive mind of its own.

It's all very exciting and requires lots of open minds, number crunching, and non-permanent trials of various set ups. It doesn't need to be all or nothing for any dictated method...

At 8:34 PM, Blogger Sunlight said...

BTW, I've heard flat out lies about Toyota's hybrid systems... I've heard on national radio that they cost $45,000 (mine was $25,000), that the mileage isn't better that ordinary cars (BS! 45-48 mpg in a 5 yr old hybrid vs 25-30 in a comparable regular car), and remember the Toyota executives publicly humiliated by the U.S. govt for a slime that NASA studied and recently reported was a lie). I figure the car is $20k, with a $5k battery. And I'm planning on needing to pay $5k for a replacement battery at some point, because Toyotas will last as long as you keep them up, but I think the battery will lose effectiveness and need replacing. I have so far done the basic maintenance and had ZERO issues with it.

Experimenting with and supporting any technologies we can afford is a worthwhile endeavor!


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