Better Place: First Battery Swap Station, Profit In 2 Years?

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Better Place battery-swap demonstration

Better Place battery-swap demonstration

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Better Place, the ambitious program that's launching its electric-car service in Israel, opened its first battery-swap station there on Wednesday.

At an event marking the opening, CEO Shai Agassi said the company would be profitable within two years of starting to provide mobility services to its customers in Israel and Denmark.

Transport by the mile

The ambitious multimillion-dollar startup wants to sell electric transportation by the mile, contracting with registered users to provide a certain number of miles each month in an electric car that it provides. The model is similar to the way mobile-phone companies provide service.

The wrinkle at Better Place, since users may need more than the 70- to 100-mile range of battery electric cars, is a network of battery-swap stations along high-speed roads in which a user can get a fully recharged battery pack (kept onsite) swapped into the car in less than five minutes.

Better Place Israel CEO Moshe Kaplinsky displays the first electric parking lot in Israel.

Better Place Israel CEO Moshe Kaplinsky displays the first electric parking lot in Israel.

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The company also plans 400 charging stations in parking lots and other publicly-accessible areas, of which 200 have already been completed.

Just one car so far

Thus far, only one manufacturer--French carmaker Renault--has committed to working with Better Place to provide electric vehicles with swappable battery packs. It signed a deal to provide 100,000 models of its Fluence ZE electric sedan by 2016. The range is up to 115 miles (185 km)

That allows long-distance electric driving, although many analysts view it as one of the most challenging parts of the entire Better Place scenario.

Renault Fluence ZE production electric sedan

Renault Fluence ZE production electric sedan

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The newly opened station is in the Israeli town of Kiryat Ekron; nine of 40 planned stations within the country's borders have now been completed. The rest are scheduled to be finished by the end of this year.

Better Place had previously tested the battery-swap concept at four prototype swap stations used by electric taxis in Tokyo.

Profits within two years

As for profitability, CEO Shai Agassi claimed at the Kiryat Ekron event that Better Place would break even in two years after its services opened. He noted that the entire cost of its infrastructure in Israel was $175 million, or equivalent to the cost of seven days' worth of gasoline.

He expects 50 percent of new vehicles sold in Israel to be electric by 2015. That, he said is the tipping point for electric cars, and he repeated a prediction that electric cars will account for 10 percent of all cars sold globally by 2020.

Taking orders in Denmark

Three weeks ago, Renault joined with the company in opening the first Better Place Center in Copenhagen. It's the first place that Danes can view the Fluence ZE vehicle and place orders for one of five fixed-price packages of mobility, depending on distance driven.

Nissan electric taxi leaving Better Place battery switching station, Tokyo, April 2010

Nissan electric taxi leaving Better Place battery switching station, Tokyo, April 2010

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Unlike in Israel, where Better Place provides the cars, in Denmark customers order the car from Renault and then separately contract for the package of miles. The first Renault electric cars will be delivered in Denmark between October and December this year.

For drivers who cover less than 12,500 miles per year, the cost ranges from $280 to $350 (€199 to €249) per month--plus the cost of the car. There's also a one-time fee of $1,900 (€1,341) that covers installation of a 240-Volt charging station. Unlimited distance is $565 (€399) per month.

Better Place has said that the cost of using its service will be no more than it costs to drive on gasoline, when lifetime vehicle and fuel costs are taken into account.

What do you think about the Better Place model? Can it succeed, and if so, under what circumstances?

Leave us your thoughts in the Comments below.

[Jerusalem Post; Reuters; Renault]

 
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