Better Place: We're Not Old News; We're Just Proving Our "Disruptive Ideas"
I recently suggested the electric-car startup Better Place is looking a bit dated around the business model. The company, to put it mildly, disagrees. Mike Granoff, head of the company's oil-independence policies section, sought to straighten me out by email: "Our model is disruptive, and disruptive ideas are not generally embraced rapidly," he told me. "They have to prove themselves. That's what we are doing."
I don't disagree that Better Place's model is disruptive. The company -- which has been around since 2007 and claims to be working to completely eliminate oil dependence -- really is trying to broaden its focus beyond battery swapping. (For the uninitiated, Better Place's main claim to fame is a system that let electric-car owners drive into special stations where they can exchange depleted batteries for fresh ones.)
My impression, at least until Granoff and I connected, was that the company wanted to be a provider of "charging solutions" intended to make electric vehicles less expensive and more numerous.
All perfectly noble, but will it work?
Better Place's challenge is that it's trying to remake two industries at once. Revolutionize the car business by getting cheap EVs on the road? Check. Replace the oil business with electricity for transportation? Check. Now cue Granoff:
The way we achieve those dual objectives is through separating the battery and the car, allowing the car itself to sell at a discount to the gas version, and by allowing both convenient home and office charging as well as "instant charge" through an automated, 2-3 minute battery switch.He then took issue with my assertion that "consumers will want their battery to be a permanent part of the car":
[That's] like turning the calendar back a year and saying "consumers will want their iPads to come only in purple." Consumers are just beginning to understand what this EV thing is all about. What we think they want is an affordable car and a convenient experience.Grand ambitions that could be a bit too grand
Better Place's competitors aren't so ambitious. As Granoff pointed out to me when I later got him on the phone, cars such as General Motors' (GM) Chevy Volt and the Nissan Leaf may eventually capture (optimistically) four percent of the total auto market, but they won't fulfill Better Place CEO Shai Agassi's vision of running a country on no oil.
To that, the electric-vehicle, or EV, market needs to be even more mass-market than what Nissan is pursuing with its Zero Emissions objective and the Leaf, which starts at around $33,000 but gets down to $25,000 once the tax breaks kick in. Better Place's goal is take the expensive battery out of the picture -- for the car owner, at least -- and drop the vehicle price to $15,000.
Actually, the business model hasn't changed much at all
Granoff stressed that the Better Place model is almost exactly the same as it was in 2007. However, he said that it had anticipated more charging infrastructure by now. This may be why the battery swapping idea is more prominent now than it was in March 2010 when I wrote about Better Place as a provider of electric mobility services.
There's a built-in beauty to the way that Better Place can raise or lower the volume on the pieces of its business model. I've come to appreciate this, because it's allowed the company to persist as a leader in the EV revolution despite the emergence of a much more straightforward option: Buy car, buy battery, charge car, drive car.
Eliminating oil, one country at a time
Better Place isn't sitting still. It's rolling out its strategy in Israel and Denmark and building a battery-swap network in Australia. Remember, when it's all said and done, the company is selling a concept. It's only incidentally selling cars. In fact, Granoff said that even though it's starting with Renault Fluents and will move on to Zoes, a standardized battery and car are not in the plan.
"It's not about battery swapping, it's about battery separation," he insisted. "The battery is part of the energy infrastructure. It's like a mini oil well that delivers X number of miles."
So what's really happened here is that, as other electric cars have hit the market, Better Place has been able to go back to its roots. Battery swapping is one again a disruptive differentiator, because the EVs that recently arrived can't do it. Oh, and they're much more expensive than the EVs that Better Place wants to offer. On balance, a good thing for the company. Its message is "No oil," not "New cars."
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Photo: Wikimedia Commons/David Terrar