Jump-Starting The Electric Car Dream

David Pogue of The New York Times hitches a ride with a man who thinks he has the answer to climate change, dependence on foreign oil, and creating jobs, all with the flick of a switch:

"When you find a great purpose in life, you gotta pursue it," he said.

He calls his idea Better Place. And investors love it - they've already poured $300 million into it.

One believer is Alan Salzman, CEO of Vantage Point Venture Partners: "I think it's one of those seminal companies that is going to change the way the world functions."

Governments are getting behind it too.

GAVIN:disk2 We believe this is the future.

And what is the big idea? Solve the climate crisis, create jobs, and eliminate our dependence on foreign oil … in three easy steps.

Step 1: Persuade the world's car companies to make electric cars with swappable batteries.

"You'll plug in a cable and that's it," Agassi said.

Step 2: Persuade governments to install millions of recharging outlets.

"They will be at home, they'll be at work, they'll be at downtown and retail centers," Agassi said. "And by the time you came back to your car, it's topped off."

Step 3: When people want to go on longer drives, when there's no time to recharge the battery, build battery-swapping stations all over the world.

Agassi described lanes like in gas stations at these "switch" stations. "You go into the switch station. Your depleted battery comes out, a full battery comes in. And you keep driving. It takes you about two, three minutes."

See? Easy! All Shai Agassi has to do is oversee the largest global infrastructure project in history, replace 2 billion gas cars with electric ones, and then convince you to buy them.

Has anyone told him, "By the way, this is crazy?"

"Oh, about nine out of ten people say it's crazy!" he laughed. "But the other ones are actually saying, 'Where can I put my money?'"

That would include Alan Salzman of Vantage Point.

"We have this very simple investment thesis, and it's served us well for the last 25 years," he said. "And that is, 'Bet on the inevitable.' I'll grant it's of large scale. But none of this requires what we think of as new laws of physics. This is all doable."

In fact, Nissan and Renault have agreed to manufacture the first battery-swappable cars. Prototypes are already on the road.

Now, to pull this off, Better Place is going to need more than money, and more than technology. It's also going to need the people in the halls of political power to sign on.

And that's the amazing part: Country by country, Agassi is convincing governments to install all those power outlets for his electric cars.

(AP/G. Yamamoto, Hon. Advertiser)

(Left: Shai Agassi, founder and CEO of Better Place, shows the electric components under the hood of a converted Nissan Rogue to Hawaii Gov. Linda Lingle, in Honolulu, Dec. 2, 2008.)

"We are talking about 25 countries around the world, and various different governors and mayors in the U.S."

That includes San Francisco Mayor Gavin Newsom. He told Pogue that he and the mayors of Oakland and San Jose want to create 250,000 stations (or points of contact) for electric charging."

For a company only a year-and-a-half old, Better Place has made amazing progress.

But it's all for nothing, unless people actually buy those cars.

How much would one cost?

"If you take the battery component out of our car, which is what we do - we don't let you buy the battery, we buy the battery - an SUV will cost roughly the same as an equivalent gas SUV, roughly in the $20,000 range. A sedan will cost roughly the same range."

But here's the twist: The car gets cheaper the more you agree to drive.

"We're just like a cell phone company," Agassi said. "We sell miles. We pay for your financing of the car, depending on how many miles you commit. Sort of like how many minutes you commit [on your phone]. You can go all the way down (and in the case of people who drive a lot, like taxis) to zero."

"Free car? If you sign up for the maximum minutes plan?" asked Pogue.

"This is Oprah for everybody, right?" he laughed. "You all got a free car!"

Now, not everybody is sold on Agassi's plan. There will be challenges ahead, as Mayor Newsom is well aware.

"So, we're talking about 250,000 charging stations," Newsom said. "Nine Bay Area counties that can't get along on any other issue, and they're gonna create a standardized outlet system and a ubiquitous service? Very difficult. So, that's a legitimate critique. Though, we say, 'Prove us wrong.' Don't assume us wrong. We believe in this."

According to Better Place, wide-scale testing begins next year. By 2011, cars and charging spots will be operational in Israel, Denmark and Hawaii.
"For a transformation of this magnitude, it's immensely fast," Agassi said.

He thinks he knows how to make the world a better place … and it's crazy enough that it might work.

"That's the stimulus project we've been looking for," he said. "It's the infrastructure project of our generation."

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