Better Place: Turning Israel into electric car country

Israel could be the first country with a nationwide electric car network, thanks to Better Place. A battery swapping station just opened outside Tel Aviv.

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    Shai Agassi, Better Place founder and chief executive, walks in front of an electric car during the inauguration of a new vehicle demonstration center in the Israeli city of Tel Aviv February 7, 2010.
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    A battery-switch station in Kiryat Ekron, Israel, hints at a nationwide network planned for 2012.
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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.

"What Better Place is doing is definitely preferable to running on gasoline or diesel, and they have a large advantage in that they are moving the pollution from city centers to the periphery," says Dana Tabechnik, a lawyer specializing in air pollution and energy at the Israeli Union for Environmental Defense. But because the electricity will come from coal- or gas-fired power plants, she says, "there is no reduction in greenhouse gases."

Moreover, the cars may overtax the electric grid, says Paul Rivlin, a senior research fellow at the Moshe Dayan Center for Middle Eastern and African Studies at Tel Aviv University.

Another concern is how the majority of customers will power their cars. The Fluence ZE will be Israel's first mass-market electric car, but other importers are looking to bring in competitors. Israeli regulators are now drafting the standards for car charging, and they include a prohibition on plugging into regular home outlets. (The ban would not target Better Place's home stations.) According to the Ministry of National Infrastructures, this is for safety. But Mr. Rivlin says it gives Better Place a leg up because they already have charging spots set up nationwide.

"What we see here is a monopoly of the supply of electricity by Better Place," Rivlin says.

Better Place spokeswoman Julie Mullins says customers should not have to pay for electricity at home twice when their monthly subscription fee already includes energy for fill-ups, along with car software that helps drivers find power stations for long trips. Plugging into a system monitored by Better Place also allows the company to manage how much electricity it uses at any point, to prevent regional overloads. Further, the company uses the standard international plug for electric cars, so the cars will charge off any legal socket.

Better Place "welcomes any competitor that will enable competition and mass transition to electrical transportation," Ms. Mullins wrote in an e-mail.

Better Place plans to be completely up and running by early 2012. More than 70,000 people have visited the Better Place showroom in Tel Aviv since it opened in February 2010.

Denmark is roughly on the same track. In early March, Better Place announced the pricing scheme there, which will be about $38,000 for the car, an additional $1,909 for a home charging station, and a monthly subscription fee of between $283 to $567, depending on miles driven. Israeli prices have yet to be announced.

The electric car will not be an all-around environmental solution. But Better Place holds that there is only so much the average person will do for the planet. "Asking people not to drive is not a reality we live in," Mullins says. "People need their cars. They need to get to work. So if we can do it in a way that's cleaner and that helps create a market for renewable energy, then that's a great step forward."

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