Shai Agassi, founder, Better Place Credit: Better Place
Shai Agassi has this stare, this intense look in his eyes, and right now it feels as though he's boring into my soul. His is the look of the truly committed, the evangelical who has the answer. Not an answer, but the answer, and if only I - or we - could see the world and its problems as clearly has he does, then all would be revealed, all doubts erased, all questions answered, all problems solved.
But while I am a huge fan of Shai Agassi's idea of a world dominated by electric cars running on batteries charged with juice from clean, renewable sources, the realist in me has doubts and the reporter is utterly skeptical. Last month, behind the Better Place stand at the Frankfurt Auto Show, my apparent lack of faith - my metaphorical wandering in the desert - seemed to irritate Agassi ever so slightly.
Agassi, the founder and chief executive officer of Better Place, is not especially tall, but he fills a room with his presence.
The 41-year-old Israeli-American has dark hair and eyes, looks very fit and, during our 45 minutes, seems like the sort who doesn't suffer fools gladly. While he's calm and respectful, I get the feeling that he thinks I'm a bit of an idiot for even suggesting that he and his company might struggle to achieve the lofty goal of making the electric car the only sensible, practical transportation choice in the 21st century.
I am a doubter. He's not. Agassi, a former software industry wunderkind at Germany's SAP AG, is not the doubting kind and he's certainly not shy about his commitment, his credentials and his capabilities and those of his staff at his Palo Alto, Calif.-based startup company, Better Place.
For instance, he says five years ago he was on the fast track to the CEO's office at SAP. Yet he left to make the world a better place - thus the name of the company he founded. After deep study and careful consideration, Agassi says he concluded that electric cars will be commonplace transportation for the masses by no later than the end of the next decade. And he suggests that the switch to electrics could come sooner. In a world marked by global warming and petroleum supplies largely controlled by unstable, corrupt or incompetent regimes, the electric vehicle is a rational choice.
In Frankfurt, he said the company's announcement of the third leg in its electric vehicle infrastructure services "vision" will be seen as a turning point in automotive history.
"This will be remembered as the equivalent to the introduction of the Ford Model T," he said, leaning ever so slightly across the small, round table that separates us.
The internal combustion engine - gasoline and diesel - is a relic, yesterday's technology, he argues. Henry Ford made the gasoline car affordable and convenient and others since have refined an early 20th century idea quite nicely. But electric cars are the 21st century.
The reasonableness of it all should be obvious, he implies, but if anyone doubts Better Place and Shai Agassi, proof is on the way. Better Place's technology is to be in place for a planned late-2010 test of the complete transportation system in Israel. The same is in the works for Denmark.
At Frankfurt, at the year's most important gathering of auto companies and the media that covers them, Better Place unveiled its design of a way to manage data communications between vehicles, battery switching stations and electric utilities. Experts across the board believe that real-time communications between the vehicle and the electric grid are essential to prevent power shortages or overloads in a world of EVs (electric vehicles).
Earlier and at other venues, the company showed its battery-swap station and its rapid recharging facility. Along with electric grid management, these are the three pillars of the Better Place electric vehicle infrastructure design.
Yet there is no point having a smart grid and quick, efficient charging without the actual electric cars themselves - ones that everyday consumers can afford. This is where Carlos Ghosn and the Renault-Nissan alliance come into the picture. Renault-Nissan and Better Place are partners; in fact, their stands in Frankfurt were side-by-side.
Just hours before I met with Agassi, Ghosn announced that Renault, seeking to gain a lead in the next generation of automobiles, will launch a lineup of electric cars. They will be mass-marketed in Israel and Denmark where governments are working with Renault and Better Place to make the vision a reality. Both Ghosn and Agassi say they would sell at least 100,000 electric cars in those two countries by 2016.
Ghosn himself took the stage with four electric cars that he said would go on sale in 2011 or 2012. They "will bring environmental soundness at a price everyone can afford," he said.
Ghosn has often said that the key to EV affordability. For that, consumers must lease, not buy, the batteries, which currently cost $7,500 to $10,000, by most estimates. Renault's electric cars will have removable batteries; owners will lease them for about €100 ($154) a month in Europe. Rundown batteries will be either recharged or swapped for charged ones, depending on the circumstance.
Certain researchers believe Renault-Nissan and Better Place may be onto something. The University of California at Berkeley reports that electric vehicles could go mainstream more quickly if battery price is taken out of the equation.
According to a study titled Electric cars in the United States: A new model, which gives forecasts to 2030, electric cars could constitute 64 per cent of light-vehicle sales by 2030 if battery swapping and pay-per-service-mile models are adopted. This fits with what Better Place is trying to do.
The good news for consumers: the Berkeley researchers predict that switchable battery vehicles will be $7,500 (U.S.) less expensive than similar gasoline-powered cars by 2012, and the cost of EV ownership will be 10 to 13 cents (U.S.) cheaper per mile than gasoline cars (depending on oil prices).
Despite the fact there is cause for optimism, this looks like a massive gamble for Ghosn and Renault, along with the other company he leads, Japan's Nissan. After all, this is unproven technology. No one can say if a fleet of EVs will deliver reliable transportation for the masses and no one knows if consumers will buy them - at least not without massive government subsidies.
Ghosn, however, argues that he's not gambling at all. He believes the electric car is the next sensible step in the evolution of the automobile and personal transportation. To underscore their commitment - or Ghosn's commitment - Renault and Nissan have together spent €4-billion to develop electric cars and batteries.
Agassi and Ghosn aside, most other auto makers are more cautious about the mass-market prospects for electric vehicles. Mitsubishi has announced a low-volume electric car for the U.S. market, but has not committed to EVs in Canada. Toyota , Honda , BMW, Daimler, Ford, General Motors, Hyundai and others are also doing electric vehicle research and most promise to have low-volume models for sale or lease within a year or two. Some already do.
But almost everyone cites the same barriers to widespread acceptance for EVs: the batteries cost too much, they are big and bulky, safety issues need to be addressed, and the batteries run down too quickly and recharging takes too long. And that's before any real discussion about the electric grid.
But the Renault-Nissan alliance stands out for its wholesale commitment to EVs sold in large volumes. Aside from the Renault unveiling of EVs in Frankfurt, Nissan's electric vehicle platform - the Leaf - was shown earlier this year and it will be the foundation of the company's EV strategy in North America. The Leaf will be launched in Vancouver in 2011.
Aside from creating vehicles, Renault and Nissan have been working with a range of local and national governments, utilities and others to set up the needed EV infrastructure and foster public subsidies to bolster the market. The infrastructure piece is where Better Place is carving its niche.
Better Place envisages a convenient network of charging outlets and battery-swap stations that will be tied together with software that makes it possible for both the system and EV drivers to know in real time the ongoing battery range and charge level. Drivers will be able to call up the nearest battery switching or charging station in a display. Thus, they can plan their route and EV range anxiety will be eliminated.
The software also tracks vehicles and driver habits. This allows Better Place to gain revenue by working with utilities to manage peaks and valleys on the electric grid that result from charging thousands if not millions of cars. Better Place also has software to manage battery inventories at switching stations efficiently.
In theory, it all looks feasible - at a price. No small matter, that. Better Place still needs to raise millions, if not billions, of dollars to pay for the batteries it plans to own and lease customers. The tab comes to at least $12,000 for each battery pack. Battery switching stations come at an estimated $500,000 each. To realize the Better Place vision will require huge investments and that means finding investors or relying on government for support and even funding.
Agassi says he is unconcerned, citing the $200-million (U.S.) from investors used to start Better Place. More money will be there when it's needed, he says. Already, subsidiaries in Israel, Denmark and Australia are in the process of raising funds to finance startup and expansion costs.
In Canada, Better Place has signed a partnership with the Ontario government, though concrete details are sketchy. What's established is that the company says it will put its Canadian head office in Ontario and build an electric vehicle demonstration and education centre in Toronto. The company has also gone public about its partnership with Bullfrog Power to provide renewable energy for the Better Place network. Macquarie Capital Markets Canada Ltd. is involved on the finance side, too.
On a global scale, the company continues forming partnerships with established companies, including chip maker Intel, software maker Microsoft and electronics manufacturer Flextronics to provide key components. These are not small players and they suggest deep thinking and a sharp business acumen at work within Better Place.
Still, there are many hurdles to overcome, not the least of which is funding. Agassi may say he is unconcerned about where he will find needed money, but the reality is the world is still in recession, capital remains tricky to come by, governments in developed nations are all running huge deficits and consumers around the world have cut back on spending. Nonetheless, he is undeterred.
"If I can give you miles in a more convenient, cheaper way than gasoline, you will take them," Agassi says. "If your neighbour is driving an electric car and paying me only $30 a week for the electricity, you're going to buy an electric car, too. If I do it without killing your kids and the planet, then it won't even matter if it's cheaper or not, you will just do it."
That's the Better Place promise in a nutshell. We'll know soon enough if Agassi and Better Place can deliver.