Does Better Place Have A Monopoly On Electric Cars In Israel?

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The electric vehicle world is watching the rollout of Better Place's electric-car network in Israel with interest, but some have asked whether Better Place has an effective monopoly on electric cars granted by the Israeli Government.

Better Place says its service and its cars compete with gasoline cars; against those, clearly it has no monopoly.

But for the foreseeable future, it appears Better Place may have the only plug-in cars on sale in Israel, and the only legally allowed electric-car charging network.

Israel is the first country in which Better Place is deploying its battery-switch and charging infrastructure nationwide.

The promise is that electric-car owners can drive long distances--beyond the electric range of their Renault Fluence ZE sedans--with interruptions of just a few minutes to swap battery packs.

But there's a catch: Anyone who wants to use an electric car can buy only one model, without a battery pack, and must subscribe to the Better Place service to make it usable. The service includes:

  • lease of the battery; 
  • installation, maintenance and operation of a charging point at the owner's residence; 
  • all electricity for recharging at home and at public charge spots;
  • as many 24x7 battery switches as may be needed to enable the annual mileage on the contract; and
  • 24-hour breakdown recovery, plus phone service, state-of-charge monitoring, and vehicle location (roughly akin to OnStar in the U.S.).

According to my estimates, the $280 monthly subscription fee for 12,500 miles (20,000 km) a year includes $34 of electricity, $192 for the battery lease, and $54 for the rest of the service.

The sole electric car sold in Israel is Better Place's Renault Fluence ZE. The local Chevrolet importer confirmed plans to bring the Volt to Israel, but could not quote a price and gave a vague 6-to-12-month timeframe.

Israel Ministry of National Infrastructure electric- vehicle policy

Israel Ministry of National Infrastructure electric- vehicle policy

Enlarge Photo

Import duty is 83 percent on conventional cars, with hybrids at 53 percent. Zero-emission vehicles get only a 10-percent import tax--saving an estimated $6,000 per vehicle. The duty is already factored into the price, leading to charges that Better Place does not pass this break along to buyers in full.

If other electric cars are imported, Israel's Ministry of National Infrastructure has ruled that owners will not legally be allowed to charge from a standard Israeli 230-Volt domestic power socket--they must contract with an approved charging-services provider.

So far, only one potential competitor for charging services has emerged: Pango Charging. I could not confirm specifics of their plans.

Shai Agassi, the well-connected founder of Better Place, has been charged in the media with negotiating the restrictions to give the company a first-mover advantage and stifle imports of other electric cars.

The Israeli Government says it has prepared for the arrival of plug-in vehicles since 2006, and wants an open market. (Its policy document is available in English from the Ministry of National Infrastructure's website.)

The policy notes the benefits of reducing the "dependency of the State of Israel on fuel," and of cutting "harm resulting from the use of fuel in private vehicles in particular."

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Comments (22)
  1. So if I can bring in a Volt to Israel, do I have to contract with Better Place in order to charge it?

    Thanks for the great reporting on this issue. Better Place is clearly a model to watch.

  2. No you don't, but you need to have a charging post installed. It can be installed by Better Place, it's competitor, or by the electric company itself.

  3. The ultimate irony is that Israel has billions of barrels of shale oil ready to be tapped. I thought Israel was more or less a small island in an Arabian sea - would seem, like Hawaii, the ideal place for a range restricted EV (100 miles or so) to operate. The cost of driving a Better Place vehicle seemed exorbitant - and much of that cost is being paid for by drivers who don't even own a Better Place vehicle. So what happens when those other drivers become Better Place drivers? Better Place is no solution to the problem of high battery costs, which is the issue, not range restrictions, especially in Israel.

  4. Kent,

    I saw your post about oil shale before, like most places with this resource Israel is in the early stages of talking about getting it out. My personal feeling is that with OPEC still in the driving seat for liquid fuel the opportunity for them to screw everbody with a sudden price dump is there. Once we've broken that 95% number for oil fueled vehicles down to something like 50% we've got them.

    Second please explain how non Better Place drivers are subsidising BP cars? I cant see it. The tax break is small, Prius vs a big Merc is similar and BP actually employee (and therefor pay taxes for) hundreds more employees than any car importer.

  5. I thought there was a 83% import tax on ICE cars and 10% import tax on EVs. Isn't that what Kent is talking about. Not that I am opposed to that, after all, the cost of externalities of Oil need to be considered.

  6. There's a complex series of green related reductions to the 83%. Hybrids have a 30% reduction to the tax down to 53%. All new immigrants have the tax cut to 50%. Perversley the most discounted cars for new immigrants are the most polluting. The whole thing is a horrendous system i only began to understand to write this.

    And I will get my car in 3 or 4 weeks.

  7. Cool. It will be interesting to hear more once you get your car. It is a great looking vehicle.

  8. Yeah what do you know, turns out Israel is basically sitting on a big pile of cash after all...should make it the envy of the region I guess and it will attract the attention of an increasingly oil starved world. Hardly a recipe for peace. Oil is messy...

  9. Interesting report. Basically confirms what I feared: bring in Better Place and one replaces the existing Big Oil automotive fuel monopoly with a new one, possibly even more monopolistic, egregiously robbing you of your right to charge at home, condemning you to their services.

    One thing that Big Oil and Better Place have in common: they both can't afford a breakthrough in battery tech that leads to cheap and quickly rechargeable batteries. Seems like a bad idea to create powerful vested interests like that.

  10. I believe either BP or another co. will offer cheap in home charging units if any of the car importers can be bothered to bring an EV.

    BP can't gauge: they are in a fierce competition with gasoline which has a huge installed infrastructure advantage.

    What remains to be seen is if their service is up to scratch, can they keep the stations and public charge spots working? Are they dependable? Its not really about the comparison to nearly free home charging, it's the overall ability for an EV to compete 100% against gasoline.

  11. I don't see how BP could offer home charging if it's banned with the formal argument that the grid couldn't handle it, and why couldn't you install your own unit instead?

    BP can't gauge...Agassi said himself that the cost of batteries will go down offering them an opportunity for interesting profits. So prices that are reasonable now, considering current cost may one day be excessive considering changes in cost, especially if it turns out the network required amounts to a natural monopoly.

    I do agree that BP could be a pretty effective system to overcome the shortcomings of current gen batteries and offer a serious alternative to gasoline, but I think it's too early to settle for a solution that may stand in the way of better solutions.

  12. Home charging isn't banned, just charging from a regular domestic socket. I've got a level 2 box on the wall in my garage now waiting. BP could install that for anyone at a cost and manage the electricity for non swap customers. They would be obliged to charge only by the kWh.

    It's competition with gasoline that should keep them honest. We can only hope. I based purchase decision on the gamble that gas prices would be steadily up for next 4 years. Anyone wants to make a bet the other way? If batts get cheaper that doesn't directly affect me because I didn't buy one!

  13. Brian, So do you have a Fluence?

  14. So one could install once's own charging system too, independent of suppliers like BP? Apparently not because according to the Ha'aretz article I quoted before:

    "Yesterday Water and Energy Resources Minister Uzi Landau signed off on the change in regulations that will bar motorists from simply recharging their electric car batteries at home, but will make the service available by firms such as Better Place and Gnergy. "

  15. "So one could install once's own charging system too, independent of suppliers like BP?"
    Yes. You will be able to order a charging system directly from the electric company and pay the same rate for electricity as you do for home electricity.

  16. Sorry! Damn iPad, tried to vote this up!

    Amir is spot on. You must pay a competent electrician to install a charge spot and then you just pay ₪.50 per kWh $0.13

  17. Sorry, now I am totally confused.
    So do I need 1) a contract with BP (or equivalent) or

    2) can I just have an EVSE installed by an independent contractor and pay market rates for electricity?

  18. @John Briggs, actually as an Israeli it's quite simple to understand. Yes, you can have an EVSE installed by an independent contractor, pay market rates for electricity, the Israel Electric Company would not know what to do with you, the EVSE would cost a fortune, and ROI would take forever. Makes more sense to go to Better Place, they cover the cost of the EVSE for home and work as well (above a certain km level) and the battery is their headache.

  19. Thanks to the reduction of taxes (Green Transportation Tax) the Israeli car market has become very "green". We see a disproportionate number of Prius and Insight (compared to Europe) and I recently saw a Chevrolet Volt on the highway.
    From what I heard, the offer of Better Place attracted more corporate fleets because of the high cost of using and more or less equal to a gasoline car.

  20. John:

    All talk of other EVs in Israel is theoretical till an importer decides to bring one. I suspect that privately importing something as novel as an EV that hasn't been brought by one of the big importers would be next to impossible.

    If one did get here, technically, it would be a violation of your agreement with the Electric company (we have only 1) to plug it in but I suspect nobody is checking.

    To do it legally you'd have to get an electrician to install a charging point and talk with the electricity company about it.

    You could call Better Place and negotiate a deal with them.

    It's all theoretical because there is only the BP car for now.

  21. Just one thing: there has been a Tesla here for 2 years brought by a very wealthy individual who happens to have a large stake in BP. I suspect for years he's been plugging it in to the regular power mains till now. He probably has a BP charge point to use now.

  22. If you're not all bored senseless by this already, I now have a longer discussion of these issues over on my own blog:

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