Wired Magazine, in their Sep. 2008 issue (on the newsstands, but I can’t link to the article yet) has a cover story about an Israeli company called Better Place which is trying to develop an electric car ecosystem “to eliminate oil” as a transport fuel.
First things first. The young visionary who founded the company, Shai Agassi, is impressive; his goal is ambitious, and he’s clearly got the enthusiasm and credibility to bring important partners on board to realize his vision (he’s purportedly already raised $200 million to fund the startup). The plan is to create an area-wide (country-wide in Israel and small countries) grid of electrical charging stations and battery-replacement shops, charging car owners for recharging and battery replacements. This new company would in essence control the new fuel for their automobiles – stored electricity. They would not create or sell the cars themselves (and that would be insane anyway); the goal is to convince auto makers to use their battery and charging technology in new auto lines. To make things easy on car owners (and to hopefully drive adoption), they plan to have on-board software to calculate trips and battery capacity and to locate nearby charging stations and battery replacement shops, and charging stations will be easy to use with swing-out arms to automagically plug your car in for a charge.
This is attractive to a number of different constituencies. People concerned about the environment like the idea of removing oil entirely from transportation; hybrids (whether the 2-mode systems like the Prius or the superior “range extender” technology of the Chevy Volt) don’t do that and will still require gas stations and a gas creation and distribution ecology into the foreseeable future. Car manufacturers might find the idea of having a single standardized battery technology appealing, although to counter that, it may constrain their ability to optimize and/or differentiate their cars sufficiently. Electrical utilities might decide that this approach would bring them an expanded market for electricity much faster than hybrids will; hard to tell. Governments may find the idea of potentially being independent from foreign oil compelling and may subsidize the effort for that reason.
Here are some reasons why this scheme could be a bad idea for governments and consumers:
- Presented as a complete ecosystem for purely electric cars, the idea appears air-tight and compelling. However, after any modest reflection, it doesn’t seem to provide much of an advantage over the hybrid technologies which are already farther along in production and which will not put any one company in a monopoly position on batteries, software, or charging technology. Because batteries are large, dense, and expensive, electric cars will always have a limited range; so how you extend that range is still open to debate. The vision of Better Place works fine in a small dense area like Israel or Denmark (perhaps even for much of Europe) – when you run out of range (or are about to) you find a local place to plug in or get a new battery. Now imagine doing that for driving across the US Midwest or Southwest, or really across any sparsely populated area. The hybrid technology answer to running out of charge is to bring the extension with you; and, when that runs out, you can still take advantage of the already deployed gasoline infrastructure until you get to a charging place.
- Government subsidies (direct or in the form of tax breaks) should not be used to create monopolies. If any government subsidies are extended to Better Place they should extract a number of firm concessions in the business model (and to be fair, for all we know, these may already be in the business plan, but they should be conditions anyway). First, the charging infrastructure should be treated much like a deregulated residential power grid, phone system, or pipeline; Better Place may be allowed to install the chargers and extract a fee to cover their use and maintenance, but car owners should be able to buy their power from any operator. Similarly, Better Place should not be allowed to operate the battery-replacement shops directly or indirectly, but should instead be required to franchise them out (they are likely to prefer that anyway as it shifts the bulk of the capital investment to the franchise owners). Finally, the batteries themselves should have a number of different suppliers; Better Place should not the sole source or broker for the battery technology (and they might not want to be anyway).
- Privacy is a big issue; you can forget about it with these cars. Every time you plug in to charge your car you are announcing your location to a central server; and that’s only if the on-board software in the car isn’t already reporting that on a constant basis so it can find nearby charging stations and swap-shops anyway. Compare that to fueling your car and charging it at home; if you use cash at the gas station (and Citgo even encourages that by giving a 3-4% discount over the credit price) then you aren’t being tracked at all by anyone.
- Allowing Better Place too much control over the specification of the battery technology would potentially stifle innovation in the design of the actual automobiles. Because of all the design issues for high-energy-density auto batteries (heat, safety, discharge, operating temperatures, size, longevity, etc.), auto makers need to be able to design all kinds of trade-offs when creating electric cars. I think that in the end, auto batteries will be a lot like lead-acid car batteries or even more varied like laptop batteries; there’s standardization of the input (charging), output (12V/5V, etc), and the macro units themselves are built from mostly standardized cells. But you typically can’t use your SUV’s battery in your sedan, or your Toshiba laptop battery in your Dell or Lenovo, and in fact, you might not even be able to use the same battery across two laptops even from the same vendor. For different models, they make different trade-offs; and this is good. Trying to force a standardized battery profile just to facilitate the “battery bay” swapping would be a bad idea.
- What’s the profit model in automated battery swapping facilities? Will people pay a huge amount of money to do that ever, periodically, on a regular basis? Is there any analogue in the sealed-lead-acid battery world? Of course the charge lasts a lot longer in SLA batteries, and they don’t get swapped out as often. How many swaps per day/month/year would have to make this profitable for a shop, at what cost per swap? Put another way, what kind of capital investment would a shop require, and how long would a shop take to see a return on their investment?
In the end, although I like this guy’s vision (a future without oil for transport) and his dedication to the concept, I really think this is not a good way to go about it. I’m fine with getting a range-extender hybrid, since I don’t typically anticipate needing range extension during the work week. With that technology, I’m planning to get as close to an infinite number of miles per gallon as possible, and that’s good enough for me.
