Better Place's Plan: Sell Inexpensive Mid-Sized EVs and Miles and Miles and Miles

Better Place's Plan: Sell Inexpensive Mid-Sized EVs and Miles and Miles and Miles

By Scott Doggett December 22, 2009

If Shai Agassi, the CEO of the California startup Better Place, has his way, a new class of moderately priced electric vehicles would be prowling U.S. roads in the near future.

In the Better Place model, automakers sell electric cars at relatively low prices because consumers don't buy the vehicles' expensive lithium-ion batteries. Instead, Better Place owns the batteries, which are swapped in and out of the cars as needed.

Such a system, he said in an interview with Green Car Advisor earlier this year, would free the consumer of the burden of paying for expensive batteries and make the initial cost of owning an EV competitive with the cost of conventionally powered vehicles.

Now, in a recent interview with the trade journal Automotive News, Agassi has named a price, saying he believes that with switchable batteries, a U.S. carmaker could put an electric drivetrain in a high-volume mid-sized vehicle and sell the car for less than $20,000, before any tax incentives are applied.

Agassi's plan to promote electric cars in this manner has not been endorsed by many automakers but has won the backing of France's Renault SA .

In the interview with Automotive News (subscription required), Agassi reiterated the Better Place business plan of selling consumers packaged plans, similar to cell phone contracts, to buy services - including access to power - by the mile.

"We buy electricity. Our job is selling miles," Agassi said. "We're the new gas-station network."

The company also says it can solve the problem of where and when drivers can charge vehicles.

It would use a combination of charging spots installed at homes and workplaces; robotic battery-swapping facilities - similar to gas stations - for drivers taking longer trips; and smart-charging software installed in the vehicles.

In September, Better Place signed a deal with Renault to import and distribute 100,000 Fluence ZE (zero-emissions) switchable-battery electric cars in Israel and Denmark.

Better Place has agreements with companies in Israel to lease 40,000 vehicles for their corporate fleets. The company has installed more than 1,000 charging stations in Israel and 100 in Copenhagen.

Better Place will launch its first battery-switching station in Tokyo next month. The station will be used in a pilot program involving electric taxis.

Agassi hopes to tackle the U.S. market in 2012, starting in San Francisco and Hawaii.

He said the premise of Better Place is that people will choose alternative cars if they are moderately priced and convenient.

"We've always asked the driver to pay more for a less convenient car and then said, 'Oh, by the way, you'll save money on the mile,'" Agassi said. "So the question became: Can you make an electric car that would be more convenient than a gasoline car?"

Scott Doggett:  is an AutoObserver.com Associate Editor.