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What's The Real Cost of a Better Place Electric Car in Israel? Page 2

 
3,758 views Jun 13, 2012
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Renault Fluence ZE charging at Better Place charge point in apartment bldg [photo: Brian of London]

Renault Fluence ZE charging at Better Place charge point in apartment bldg [photo: Brian of London]

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Fuel in Israel today is $7.50 per gallon, and it hit $8.00 just after I ordered my car. Taking consumption figures from the fuel.ly website and assuming no increase (or decrease) in gas price over four years, that gives total fuel costs of $7,700 and $14,900 respectively (₪30,000 and ₪58,000) for the Prius and the Malibu (with base 2.4-liter engine).

Certainly cheaper new cars are available (Hyundais have grown in popularity lately) these two are comparable in size and at least the Chevy has some chance of offering acceleration as "peppy" as the Fluence ZE.


The cloud on the horizon, however, is a collapse in used-car values in Israel. Just opposite the Better Place visitor and sales center is an enormous parking lot filled with unsold off-lease company cars.

Three-year-old French sedans with 40,000 miles (65,000km) can be had for $14,000 (₪55,000) after haggling. These represent the best value motoring in Israel today. I gave up trying to sell my Honda and gave it to one of my employees in lieu of the Toyota Corolla my company had been leasing.

View of unsold off-lease cars from Better Place visitor center [photo: Brian of London]

View of unsold off-lease cars from Better Place visitor center [photo: Brian of London]

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Finally, it's important to note private buyers like me are rare in Israel. Full 90 percent of new cars are sold to companies that lease them to other companies, which provide them to employees. Also, the entire market is controlled by six family run importers who also own most of the lease companies.

The Israeli market is a tough place, and prices have long been kept unduly high for many reasons.

In this context, the Better Place model saves me money compared to the alternatives.

Brian Thomas ("Brian of London") emigrated from the U.K. to Israel in 2009. He now drives a Renault Fluence ZE sold through Better Place--joining David Rose and other early Better Place customers. He owns and operates his own import company in Israel with more than 15 staff. Thomas regularly blogs at Israellycool about life in Israel, technology and business topics.

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Comments (24)

  1. CDspeed avatar CDspeed . Posted: 6/13/2012 4:31pm PDT

    @ Brian, if you decide to keep the car longer then four years, do you think the lease rate will go down or increase by that time? It doesn't seem to make much sense to buy a car and then have to pay thousands every so often just to keep the part that makes it run. EVs are supposed to have a lower cost of ownership, so which do you think is cheaper over four years a Nissan Leaf or the Renault Fluence ZE? (if either car is purchased not leased)
     
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  2. brianoflondon avatar Brian of London Posted: 6/13/2012 10:09pm PDT

    And if you stop buying gasoline, how far can you get with a gas car?

    The mental leap is to consider the battery not as a fixed part of the car but as 8 years of fuel that Leaf owners have to pay for in advance! It's clear that the marginal cost of the electricity is very low and will continue to be.

    Obviously there are pluses and minuses to a lease of fuel versus outright purchase but I like the way it looks now.
     
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  3. fb_586990465 avatar David Rose Posted: 6/13/2012 11:08pm PDT

    @CDspeed's question there are other aspects to take into consideration. If in fact I do keep the car for more than 4 years, I still expect to enjoy upgrades of the OSCAR and improved batteries as these come on line, since I do not own the car's battery and Better Place will have to from time to time replenish their stock of batteries, based upon commonly accepted inventory practice will enter the newest, compatible batteries into their inventory. My Fluence will remain state of the art.
     
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  4. fb_586990465 avatar David Rose Posted: 6/13/2012 11:11pm PDT

    The second consideration is the fact that contrary to other EVs, with a fixed battery, I am confident that should I decide to sell my Fluence in 4 yours for a new ZOE, for example (once these become compatible for switching)I'll receive a higher value on the Fluence as there is no 'wear and tear' on the primary component that causes the greatest depreciation to current fix battery EVs, i.e. the used battery. I would further hope, although I have no way of predicting this, that EV operational costs would drop, just they way their did in computers, lap tops, mobile phones, tablets, etc as the number of cars on the road increasess.
     
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  5. fb_586990465 avatar David Rose Posted: 6/13/2012 11:16pm PDT

    BTW, as usual fine writing. Brian has a single charging station at home based upon the subscription that he purchased. I however, purchased an 18,641 mile (30K KM) x 4 year subscription for which I paid in the area of $14K and received a second charging station that is scheduled to be installed at my wife's workplace. This will enable us of course to commute 100% with a fully charged battery and do away with any range/charging anxiety whatsoever.
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  6. CDspeed avatar CDspeed . Posted: 6/14/2012 7:38am PDT

    All batteries can be removed. And the what you and David are addressing is yet another anxiety associated with today's batteries, which is battery cost and lifespan. But both cost and lifespan problems will not stay the same forever. Better Place is a good solution due to the way batteries are now, but ten years from now batteries will go further, live longer, and cost less. Plus haveing the battery pulled just to fill up will add wear and tear to the car. Have you ever had an electronic device for a long period of time and noticed that the batteries don't hold in as well and the battery door falls off because it's worn out, well the same thing will happen with battery swapping, but it will hit you with future repair bills.
     
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  7. fb_1001015277 avatar John Briggs Posted: 6/15/2012 6:56am PDT

    This wear-and-tear is a function of engineering and testing. I assume Renault has tested the insertion-removal of the battery in much the same way that they tested the opening and closing of the car door. I would expect similar reliability.

    The problem with many electronic gadgets is that they are not adequately engineered and tested for insertion/removal. Car companies are better at this sort of thing.
     
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  8. brianoflondon avatar Brian of London Posted: 6/15/2012 10:17am PDT

    John's right. Once the novelty wears off most of us won't switch very much. I can see as little as 20 switches a year unless I'm constantly demonstrating it to people.

    Even then, the test cars at the stations have been switching 20 times a day since January and they're still working to the best of my knowledge. I'll ask next time I'm there if they've ever had a failure with that part of the system.

    Overall re-charging the battery out of the car is far better for it because of the temperature control possible.
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  9. fb_1046149202 avatar Lawrence Feldman Posted: 6/14/2012 12:18am PDT

    Brian,

    How would you compare the overall cost of the Fluence to that of:

    a small fuel-efficient gasoline-engine car (e.g., manual Honda Jazz, which costs NIS 100,000)?

    a Toyota Prius?


    Thanks, Larry
     
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  10. brianoflondon avatar Brian of London Posted: 6/14/2012 4:21am PDT

    I've heard the Jazz Hybrid gets amazing gas mileage but it's still a small feeling car. I believe comparison with the Toyota Prius (which is in the article) is valid and each way I look at it, I'm getting four years of fuel free. That's worth less on a Prius than on a bigger engined car, but its still a lot of cash.

    Nobody knows what the depreciation story is going to be. It could be amazing if Better Place is a big success or it could be horrible. Right now I'm rolling the dice and taking my chances. I wouldn't have thought 3 years ago that the best offer I'd get on my mint condition Honda Civic was ₪55,000.

    If the goal is cheapest motoring, nothing beats used today in Israel. If you want to stop funding Jihad, EV is it!
     
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  11. fb_100001094176420 avatar Ele Truk Posted: 6/14/2012 7:03am PDT

    And that's one of the main points Shai Agassi had when he came up with Better Place. Why are we sending money over to countries that hate us and want to kill us?
     
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  12. fb_1001015277 avatar John Briggs Posted: 6/15/2012 6:58am PDT

    Even if they don't want to kill us, the 1974 oil embargo made it clear that there can be political consequences from getting oil from certain parts of the world.
     
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  13. fb_1317821901 avatar Nick Huggins Posted: 6/14/2012 4:43am PDT

    Great article. After years of speculation by both EV proponents and detractors, it's nice to see the numbers spelled out.

    And I learned a thing or two about the Israeli car market - very different than North America.
    +5 to you.
     
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  14. fb_1031439697 avatar Danny Feinstein Posted: 6/14/2012 11:23am PDT

    "Finally, it's important to note private buyers like me are rare in Israel. Full 90 percent of new cars are sold to companies that lease them to other companies, which provide them to employees" Not really true only about 60 % of cars are sold by and to companies but even that is a lot
     
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  15. brianoflondon avatar Brian of London Posted: 6/15/2012 10:13am PDT

    I can't find a straight authoritative answer on this as I've seen the 90% in a few places but nothing firm. If it's 60% I'm happy to be corrected.
     
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  16. fb_100000995745147 avatar Gavin Shoebridge Posted: 6/14/2012 12:01pm PDT

    $900 US a month is more than what most Slovaks earn, so it'd never be more than a novelty here unfortunately.
     
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  17. fb_100002320694866 avatar Iam FFinder Posted: 6/14/2012 7:08pm PDT

    Dear Brian,

    In Israel..

    The Fluence costs ₪126,000, in Israeli shekels.
    What's the starting price for:
    The Toyota Corolla 4 door sedan ₪ in Israeli shekels?
    The Honda Civic 4 door sedan ₪ in Israeli shekels?

    Also just to be clear..

    You DIDN'T pay all of the ₪36,000 Israeli shekels for a
    four-year subscription to the Better Place package but only
    the monthly subscription fee of ₪320 Israeli shekels? Right?

    Thanks for any info!
    ff
     
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  18. brianoflondon avatar Brian of London Posted: 6/15/2012 3:43am PDT

    4 years is ₪36,000 and yes, I Pre-paid all that. That's ₪740 per month. I get back 50% ₪320 per month till they finish the network. People on higher subscriptions get back more (50% of what they pay)

    Corolla and Honda 4 are similar prices to the Fluence ZE. Honda a bit more I think.
     
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  19. fb_1001015277 avatar John Briggs Posted: 6/15/2012 7:00am PDT

    Brian,
    Thank you so much for the excellent reporting.

    I am still not a fan of the Better Place model (at least for the USA) but I am trying to keep an open mind.
    Later
    John C. Briggs
     
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  20. brianoflondon avatar Brian of London Posted: 6/15/2012 9:47am PDT

    Thanks John!

    I also don't think the Better Place model works for the US. Essentially they are playing on the difference between liquid fuel and electricity to make their business work. Those are too close together to cover the capital investment in batteries and switch stations for the US.

    The US's geography is a challenge, but the island model could solve it with them able to operate in many locals but I agree, the US isn't a priority because Europe is much more attractive.
     
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  21. fb_1001015277 avatar John Briggs Posted: 6/15/2012 11:09am PDT

    It is just so cool to hear about your experience with Better Place rather than just hearing from BP's marketing people.
     
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  22. fb_586990465 avatar David Rose Posted: 6/16/2012 2:48am PDT

    Actually I am capable of seeing Better Place in quite a number of locations throughout the US. Just as in the company's Australian deployment, where it is starting around Canberra and only later will move northward and westward, who said that Better Place HAD to deploy coast to coast? Why can't it succeed in Hawaii (as it is), why can't it be deployed around the Beltway in DC, or along the NJ turnpike? It would be very easy to deploy in areas like Phoenix to Flagstaff. As Agassi has stated repeatedly each deployment would require no more than the cost of a week's worth of gasoline used in those locations. But again, I am interested in seeing Better Place's success in Australia and it will be successful before coming to the USA.
     
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  23. MrEnergyCzar avatar Mr EnergyCzar Posted: 6/16/2012 7:34pm PDT

    Interesting concept. Just having charging stations everywhere would probably kill this concept in the states though...

    MrEnergyCzar
     
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  24. brianoflondon avatar Brian of London Posted: 6/17/2012 12:05am PDT

    It's all about whether you want 100 extra miles in 50 minutes or 100 miles in 5 minutes. Neither of these matter if you ONLY want 100 miles per day and there are a lot of people and use cases who fit in that bracket.

    If you want the later, someone needs to invest and you need to pay for it.

    In my mind, for the majority of people, fast chargers will not make affordable single car electric motoring practical anytime in the next 10 years.
     
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