According to Better Place CEO Shai Agassi, the cost of the upcoming Renault Fluence ZE EV will be significantly less than the same model with a gasoline engine.

The Renault Fluence ZE was unveiled at the Frankfurt Motor Show.  It will become the first commercialized vehicle to utilize the Better Place battery swapping station and Renault has set its sights high in terms of target sales for the vehicle, hoping to garner widespread appeal.

Though official pricing has not been announced, Agassi said, "Our partner Renault has not set prices yet.  But the e-car will be 3,000 to 5,000 euros ($4,400 to $7,350) cheaper than the model with a gasoline engine.  Governments give incentives for electric vehicles, that's how we can sell the car at cheaper prices."

Driving down the cost of the vehicle was key for Better Place and Renault.  In order to accomplish this goal, Better Place purchases the batteries and leases them to customers which could eliminate more than $10,000 in upfront costs.  According to Better Place, they anticipate charging around 250 euros per month in leasing fees if the customer drives less than 30,000 km per year.

What if you drive more than that?  Better Place offers an unlimited mileage flat rate for 340 to 350 euros per month.  Agassi said, "If a customer has a flat rate to drive as much as he wants, he will pay 340 to 350 euros- try to get such a deal with Shell."

Better Place anticipates a slight profit from charging by mileage which will eventually pay back the companies cost of purchasing the lithium-ion batteries.  They anticipate breaking even by 2012.

EVs are expensive and many companies are finding ways to deal with the high costs.  Initial sticker shock may turn buyers away and many believe that initially offering a lease on the high cost battery is a good bet until the technology is proven, costs come down, and buyers are willing to pay more up front.