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Better Place and the future of EV in Australia

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Much has been written already about Better Place and Israeli founder Shai Agassi’s plan to bring a mobile phone-style business model to the sale of electric vehicles (EV).¬† The Israelis, who are set to have their Better Place network installed by next year, have been effusive in their response to the company’s plan. The response elsewhere has been upbeat – in the US, here in Australia, and elsewhere. Inevitably, some have been less than sanguine about Better Place’s vision. Either way, Better Place is advanced in their rollout in Israel, with Denmark not far behind, and aims to have its Australian network ready 6 months after Denmark’s.

The outline of the model is fairly straightforward: since EV batteries are expensive, the company will lease the battery to the consumer for a monthly fee over a multi-year contract, much like mobile phone contracts work. So consumers need only purchase the vehicle itself for roughly the same price as its petrol-powered equivalent, and then enjoy the benefits of paying per kilometre driven. At least in Australia, all the power at the charge points will come from renewables, most likely wind power, which still has the distinct advantage of costing far less than petrol on a per-kilometre basis.

Electric carBetter Place installs its own charge points at the consumer’s place of residence and possibly at their place of work, and for longer journeys it will operate a network of battery exchange stations. Full charges by the consumer take too long to be viable on a long journey (say, from Sydney to Melbourne) and present other technical challenges, whereas Better Place claims that a simple battery exchange (for a pre-charged battery) will take all of three minutes.

I’ve thought for some time that plug-in hybrids (preferably LPG/electrics simply because gas is somewhat cleaner and cheaper than petrol) are the natural solution to the personal transportation problem. This is because most city drivers could survive on a fully juiced-up battery, leaving the LPG tank for longer journeys which are relatively infrequent for most people. But you are left with what remains an expensive car which is charged by traditional power outlets, which for most people means simply switching the carbon burden from petrol to coal.

This is why I like a lot about Better Place’s business model. As CNET points¬† out, it solves the issue of EV battery expense and the range problem (particularly with these early-generation batteries that are only capable of a 160 km range). It solves the chicken and egg problem of adoption by co-opting the “network” model of the mobile phone. It elegantly answers the critics who argue that EV isn’t necessarily clean because it relies on traditional black power – because Better Place guarantees that its power will be 100% sourced from renewables. Hence their partnership in Australia with AGL. This is a huge selling point at a time when consumers remain concerned about their environmental impact even in the midst of the GFC. And the net result of all of it, should the project be even moderately successful in Australia, will be cleaner air and a significant reduction in dependence on foreign oil which is a clear geopolitical advantage. And, if all goes to plan, consumers will be paying massively less for their personal “fuel” costs – even if the cost of petrol continues to fall, EV costs per kilometre run rings around the cost of oil.Charging an EV

The reason why Shai Agassi and his company has captured the public’s imagination is that it presents a comprehensive vision of how a country’s fleet can be electrified. Perhaps for the first time, we have a simple, reasonably elegant model of a clean, renewable, sustainable electric future. Inevitably, there are going to be challenges – for instance, the installation of charging points at every consumer’s home is understandably necessary to Better Place’s success (in large measure, to ensure that the network is providing only renewably-sourced power), but it detracts from the elegance of the solution.

Nevertheless, I am cautiously optimistic about Better Place. It could easily become an important part of the personal transportation sector’s mix in the next few years, and I say this largely because of a very simple test I have: I’d buy it. And I think a lot of other people will – because it has tremendous cost and branding advantages over hybrid vehicles and even questionably-fueled plug-in hybrids.

If I can have an electric car that will reliably get me around Sydney and up and down the NSW coast for a fraction of the fuel costs of a traditional ICE vehicle, and I know it’s powered by 100% renewable energy, surely it’s going to be as much of a no-brainer for many other consumers as it would be for me.

It will be fascinating to see what comes of this company. I suspect it’s going places. Better places. (I couldn’t resist.) Regardless, I suspect that we will be the last generation to suffer from the filthy air that has blackened our lungs, and the noise pollution of that dinosaur technology, the internal combustion engine.