Congratulations to Shai Agassi for recognizing that successful development of electric cars requires technical and business solutions. I first came across Agassi three years ago when he was a rising star at SAP, the giant software company. Now he’s heading an entrepreneurial effort based in California to promote use of electric cars. His idea is to market electric cars the way cell phones are marketed. The hardware itself (in this case the car) is subsidized. Users have a contract and pay monthly fees based on projected usage. New batteries developed by Agassi’s company, called Project Better Place, provide lithium-ion batteries that can go 124 miles per charge.
“Project Better Place solution framework looks to convert an entire country into electric cars, powered by batteries, that get their energy from green sustainable electricity sources, through a smart electric recharge grid that covers the entire country,” says Agassi in his blog. Israel, where gasoline costs more than $6 a gallon, is now putting some muscle behind the idea. Israeli users of the electric car will receive tax incentives. Plus Israel is investing $200 million to build recharging facilities, also supplied by Agassi’s company. Drivers don’t have to wait for a recharge. Batteries are swapped out. Call it “a battery fill up”. The other partner in the collaboration is Renault-Nissan , which will provide the cars. For the moment, no huge re-engineering of the cars (a la Chevy Volt) is planned. Processors for the cars electric components are still under development. Separately, Renault and Nissan expect to manufacture a hybrid by 2010 and an all-electric car by 2012.
The money behind Agassi’s company comes from Israeli businessman Idan Ofer, who hopes to expand the concept to New York, Singapore, China, and London, where electric cars get special treatment on downtown streets (such as free parking). A pilot will start later this year in Tel Aviv. A few hundred cars are expected to be on the road next year
This strategy is an interesting contrast to the approach taken by GM in the last dozen years, which has been well chronicled by my outstanding colleague, Chuck Murray. GM has consistently gone for the technical home run, staring with the EV, and continuing today with the Chevy Volt, which includes breakthrough ideas in materials technology. Meanwhile, Toyota got the lead with a less ambitious idea, the hybrid Prius. And now comes Agassi’s very exciting concept.