Thu Dec 4th, 2008 at 09:59:39 PM EST
Shai Agassi used to be the CEO of SAP. Today he is planning to rebuild the automobile industry from the ground up. With Better Place, he has a business model that may make electric cars real, tomorrow. He began when he was asked a simple question at the World Economic Forum in Davos, Switzerland: How do you make the world a better place by 2020?
Being an engineer, he took that question seriously and began thinking about moving transportation off oil, completely. His guiding principle was "You need to go down from molecules to electrons to change the world." Dematerialization. At MIT on Thursday, December 4, he explained just how he is applying that concept to the automotive world.
Here's an earlier, eight minute version of his plan:
Better World has a partnership with Renault and Nissan to build electric cars. Not electric vehicles but four wheel, four door, normal looking electric cars. They will have half as many parts and be twice as fast. They will be powered by lithium/iron/phosphate batteries which have a range of 125 miles. Better World will own the batteries and install a system of charging stations at parking lots, homes, and along the highway. These will be smart chargers that connect to the grid so that the batteries will eventually be rolling energy storage and load levelers. 50,000 cars will equal 1 GigaWatt.
Cars are parked on average 22 hours a day and usually at one of four places: at home, at work, where you shop, and where you party. The batteries will trickle charge there or you can switch out the entire battery pack at a charging station. Better World is considering four different methods of battery switching, the slowest of which takes one minute. If one in six parking spaces is a charging station, they will be seen as ubiquitous. It will cost (Agassi said "Don't quote me" so these are rough figures) about $500 for a street charging station and around $200 for a home charging station.
This system costs out at the equivalent of $1.50 per gallon oil and requires absolutely no new technology.
Israel has already bought in on this process as it has plans to get oil by 2020. They will be instituting a new tax system on automobiles starting with 72% tax on buying a gasoline car and 10% tax on electric cars. Each year the tax will increase to expedite market penetration. Better World is building a 2 GigaWatt solar field in the desert over the next 10 years which will provide electricity for all of Israel's cars. Israel's system will cost about $1 billion, a month or two of what they currently spend on oil.
Denmark has also bought in. Their new automobile tax structure will be 180% for gasoline vehicles and 0% for electric. Their source of electricity will be wind and help them level their loads. There are times when Denmark's many wind turbines produce too much electricity for their grid. Installing electric car charging stations will remove that problem.
Hawaii is also buying in and two weeks ago a consortium of Bay Area mayor led by San Francisco's Mayor Newsom has signed on with Better World. The Better Place model is coming, like it or not.
Agassi is using a cell phone model to sell the concept - buy a contract and you get a car for little or even nothing. (An idea he got after talking with Bill Clinton.) He is also going open source with the idea with only the proviso that others use international standards for all connectors and that the different networks can interoperate.
* Drivers pay to access a network of charging spots and conveniently located battery exchange stations powered by renewable energy.
This is transportation as a sustainable service, with drivers as subscribers, and Better Place as a true "mobility operator."
- Drivers pay for the miles they drive.
- Cars are made much more affordable--even free in some markets--by the business model's financial and environmental incentives to add drivers into the network.
- Better Place operates the electric recharge grid that brings it all together.
Agassi says, "If you do the right moral thing immediately, you win."
You know, he just might be right.
Shai Agassi has a blog at http://shaiagassi.typepad.com/ and Better World has 7000 unsolicited requests for jobs. Mass production of the Renault/Nissan/Better World cars should be happening by 2011.
Get ready for the future.