The biggest knock against electric cars is that they lack enough range and a suitable infrastructure to support them. An Israeli start-up company called Better Place has an ambitious plan to change the automotive world – but can the technology get better in the short-term to make it happen?
Better Place (betterplace.com) was founded by Shai Agassi, an Israeli entrepreneur who was also the company’s CEO until just weeks ago before a reported falling-out with investors. His vision was to mitigate the inherent roadblocks of electric cars and the limitations of the technology – cost, range and infrastructure – by tackling all three simultaneously.
Better Place doesn’t make electric cars, but it sells them and maintains ownership of the batteries. By taking away the battery’s upfront cost, it sells the electric Renault Fluence Z.E. for about $30,000 [Canadian] in Israel. The battery, said to add an extra $20,000 to that price tag, is essentially leased to the driver through a price structure whereby drivers pay a flat rate per kilometre (about 14 cents). A special charging station is installed at the driver’s home, and Better Place foots the bill for every kilowatt charged by the hydro utility.
Since the range of the battery tops out at about 130 km, drivers don’t have to necessarily charge the battery, they can literally get it replaced. Drivers can go into Better Place stations (there are 25 in Israel; with 40 planned by year’s end), where a robot opens up the hatch from below, takes out the battery and replaces it with a fully charged one. The process takes no more than five minutes, and is free for Better Place members. There is also roadside assistance should you need a battery replacement on the road.
It sounds compelling, but cars aren’t smartphones, where usage fees and a monthly service bill come as part of the deal. This might explain why the company has only been able to sell 500 cars with its services in 10 months.
For perspective, there are an estimated two million vehicles in the country. Better Place has also struggled to convince drivers that there’s an immediate economic benefit, especially in a country where regular gas sells for between $2-$3 per litre.
In a country as small and politically isolated as Israel, most drivers are unlikely to drive too far in one day, but in Canada, a commute to and from work in the country’s largest metro areas alone adds up. There’s also no guarantee that the company will be able to survive going forward if it keeps hemorrhaging money the way it is now, and any contingency plans for customers in case of insolvency weren’t revealed to me during my visit.
Getting a warranty for a car is one thing, but to rely on one company to simply be able to drive the car is another. It’s proving a tough sell, despite recent limited expansion to Denmark, the Netherlands and Hawaii.
Some of Better Place’s ideas are certainly innovative and clever, but the questions over the business model behind it casts doubt on whether drivers should wean themselves off gasoline entirely.
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