Model for Viable Electric Vehicles in Cell Phones?

"Creating an energy-independent economy is our generation's moon-shot."

by / March 25, 2009

Americans throw away hundreds of thousands of cell phones a year according to government estimates. These cell phones then end up in landfills -- not exactly a model of environmental sustainability. So who would have thought cell phones would ever point the way to the world's energy and environmental salvation? Shai Agassi, the founder and CEO of Better Place, thinks so. With Better Place, Agassi has embarked on an ambitious plan to build a worldwide network of electric vehicle charging stations by bringing national, state and local governments on board.

This is the "stimulus project we've been looking for," Agassi said in a recent CBS interview. "It's the infrastructure project of our generation."

Better Place plans to partner with national, regional and local governments in the roll-out of the infrastructure and then help drivers finance their electric car purchases. The company would then make money by selling miles much the same way a cellular provider sells minutes. So, for example, similar to the way one might contract with a cellular telephone provider for 1,000 minutes a month, Better Place plans to offer drivers a certain number of miles per month for a flat fee. But there's a twist. The more you drive the car the cheaper it becomes to operate. Charging the car may even be free for some drivers who do a great deal of driving, such as cab drivers, Agassi said.

And Agassi is not the only one who things the idea is sound. Better Place has lined up $300 million from investors including Morgan Stanley and a number of private investors. In January, Better Place announced a Danish investment firm had contributed nearly $141 million for the building of the electric car infrastructure in that country.

"Creating an energy-independent economy is our generation's moon-shot," said Robert F. Kennedy, Jr., Venture Partner and Senior Advisor, VantagePoint Venture Partners, one of the investors in Better Place.

National, state and local governments are getting behind the initiative too. Countries including Israel, Denmark, France and Australia and Ireland have begun the process of rolling out the necessary infrastructure for electric vehicles while California, Hawaii and the Canadian province of Ontario have announced partnerships with Better Place for the roll out of the company's network of electric vehicle battery charging and swapping stations. Mayors from across the San Francisco Bay Area are also partnering with the company to become the "EV Capital of the U.S." Better Place estimates the network investment in the Bay Area will total $1 billion when the system is fully deployed.

The Better Place model is an open network model built on industry standards, allowing for fixed-battery and battery-exchange electric vehicles to operate on the network. The Bay Area network will also include electric vehicle charging stations outside San Francisco City Hall built by Coulomb Technologies.

Better Place's plan calls for installing battery charging stations in people's homes and in parking lots in shopping centers and business parks. Electric vehicle battery swapping stations would be constructed throughout a region to keep vehicles charged during long trips.

In addition to ending dependence on fossil fuels, Better Place estimates its network of charging stations will reduce global carbon dioxide emissions by 10 percent. The energy for the system would be produced from renewable sources such as wind and solar as well as using the excess power generated by utilities in times of light demand. For this reason, the company believes that its electric vehicle infrastructure would drive investment in renewable energy sources.

A vehicle that utilizes the Better Place network of charging stations shouldn't cost much more than a conventional SUV or sedan does today, Agassi has said. Under the company's business model, the vehicles would be owned by the drivers who would then be given a battery and pay for the energy they use.

However, the plan has its skeptics. In a video on a The Huffington Post, a writer for Forbes said he doubted the environmental benefits of the Better Place infrastructure because the predominant source of electricity in places like the Northeast is coal. Powering cars with electricity produced from coal would actually be worse for the environment than the pollution from gasoline.