Better Place: Can You Really Sell Electric Cars Like Cell Phones?

By Jason Weitz

Jason Weitz

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Better Place: Can You Really Sell Electric Cars Like Cell Phones?
Alright, it's long overdue that someone spoke up about this little company called Better Place. I... Read More

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905 views Dec 9, 2009

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I won't bore you with the details, chances are you're already familiar with this company. However, if this is news to you or if you need a refresher, here's the quick low-down. Shai Agassi is a successful entrepreneur hailing from Israel. In his manner of thinking, electric cars are terribly expensive because of a couple things. The first thing is what people want out of them, i.e. long range, short charge, ample charging infrastructure. The second is that the only way to meet those desires is with very expensive batteries, and a pre-built charge network. So he took an electric car company and restructured the pricing. His idea is to build cars that operate on a smart-charge network and bill people much like a cell phone company. You get the car at a premium price for paying monthly to subscribe to the charge network. That way he works around the challenges of needing fancy new technology. His charge network meets all the traveling needs of his customers.

Now that's all well and good except for a few things. Like the fact that it isn't economically viable to cover an entire country with your proprietary charging grid. This business model really only works in what Agassi calls islands, such as tiny countries like Israel, or actual islands like Hawaii. So it makes sense that some of his earliest test markets are Israel and Hawaii. It also helps that Israel is working with him to impose huge tax breaks on EVs and huge tax hikes on gas-guzzlers. For that, and his now widely-famous efforts at bringing EVs to the masses, I do applaud Mr. Agassi.

However, I must point out that there are some flaws to his plan. First off, there's no longevity. As technology improves, fancy batteries get cheaper and his charge network will start to become excessive. If you don't know about CNT batteries, you're in for a shock. I'm told they are going to be priced starting somewhere around $400 for a 440Ah, 12V battery. In fact, I'm planning to use these in the 'Frankencar' (an electric vehicle project I'm working on, details at the end of the article), and my very rough math calculates the possible range as being at least 100mi/chrg and at best 250mi/chrg (no promises, very rough math here). So my charge network would just be a long enough extension cord. Oh, and did I mention that they claim the batteries charge between 5-15 minutes and last for around at least 2000 cycles? So tell me again, Shai, why do I need to pay you every month?

The other thing I won't go too much into detail about, but it's that anything on a payment plan is screwing the customer, guaranteed. Not that it's always a bad deal to be on a subscription or payment plan, sometimes it's the only viable way, and that is what Shai Agassi believes to be true about EVs, but because I think that they can still be economically comparable to gas cars, then adding a monthly payment plan will probably just increase Better Place's profit margins via my bank account.

Finally, I recently watched a speech in which Mr. Agassi equated the purchase of a battery pack to a mini-well, or in other words, hes saying that its not a storage system like a gas tank (which doesnt wear out) but an energy source like an oil well. Really? Because what I see is that were just switching which part of the car is eventually replaced. Agassi's way of looking at it almost implies that the car itself is not a consumable, but really, how long do cars last? Even if they still work, I've heard the average American keeps their car for seven years. Well then, if a battery lasts ten years, and after that ten years you can put in a newer, more powerful battery for less cost than the original, Id say thats a fair trade for ownership thereof.