Better Place: Turning Israel into electric car country

The future of transportation may lie in what looks like a modernist car wash.

In Israel in March, software entrepreneur Shai Agassi unveiled what could be the start of the world's first nationwide electric-car battery swapping station network. A white-and-blue Renault Fluence ZE sedan silently pulled into a drive-through lane. The floor beneath opened as a robot removed the car's 550-pound battery and swapped in a new one. About three minutes later, the car rolled away, ready for 100 miles of emissions-free driving.

This new station is part of a $175 million system that Mr. Agassi claims will end the era of the internal combustion engine, all at the cost of what Israelis spend on seven days of fuel.

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"When Israel proves it can get off its use of gasoline at the cost of one week of gas, I don't know of one country that will say, 'let's stay on gas for another week,' " says Agassi, the Israeli-American founder and chief executive officer of Better Place in Palo Alto, Calif.

Under Agassi's plan, Fluence ZE owners will pay an initial fee for a home charging outlet and monthly payments for use of public charging spots and battery swapping stations across the country.

"The rest of the world said: 'We need a car and an outlet,' " Agassi says. "A person would buy the car like an air conditioner. We said: 'To get to the mass of 100,000 or a million cars, we need an infrastructure system.' "

Of the 2.5 million cars on Israel's roads today, only about 10,000 are hybrids and a handful are electric. But Israeli leaders have eagerly embraced a plan that could free them from dependence on oil from hostile countries, slashing tax rates for electric cars from 72 percent to 10 percent.

"We are dedicating a rehabilitation institute from the drug called gasoline," says Minister of National Infrastructures Uzi Landau at the station's opening.

Better Place is building a similar nationwide infrastructure in Denmark and plans to follow with Australia, Japan, California, and Hawaii. The company will deliver the first major round of Renault cars in late 2011, and has committed to buying 100,000 vehicles for Israel and Denmark by 2016. About half of Israel's 300 biggest corporations have signed agreements to consider switching to the electric vehicles once they are available.

Critics contend the cars will switch pollution from the tailpipe to the smoke stack – while handing a monopoly to Better Place.

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