Shai Agassi Launches Electric Vehicle Infrastructure Venture
29 October 2007
Shai Agassi, former SAP executive, has formed Project Better Place, a company with $200 million in first-round funding that is focused on developing a sustainable infrastructure to support the transition of country-wide transportation systems to electricity and away from fossil fuels.
The company will deploy a regional and global infrastructure to support electric vehicles on a country-by-country basis. Project Better Place will establish a widespread grid of electric charging spots at current parking locations as well as battery exchange stations through software systems integration.
Our global economy urgently needs an environmentally clean and sustainable approach to energy and transportation. We need to rethink how to bring together consumers, existing technology, and the entire car echo-system to establish the next generation infrastructure that provides energy for commuters and is not dependent on liquid fuels. We have crossed a historic threshold where electricity and batteries provide a cheaper alternative for consumers. Existing technology, coupled with the right business model and a scaleable infrastructure can provide an immediate solution and significantly decrease carbon emissions.—Shai Agassi
Agassi will serve as CEO of the new entity, while Idan Ofer, Chairman of Israel Corp., will serve as Chairman of the Board. The company has entered into a term sheet for its first round of funding in the amount of $200 million with investments from Israel Corp., Morgan Stanley, VantagePoint Venture Partners, and a group of individual private investors managed by Michael Granoff, which includes James Wolfensohn, Edgar Bronfman, Sr. and Musea Ventures.
Project Better Place will focus in phase one on establishing a repeatable framework, implementing electric recharge grids through local operating companies in multiple countries. In addition, the company will secure partnerships with a supply chain of car makers, technology providers, and global and local financing institutions. The company is currently in discussions with various governments to establish pilot sites, with plans to begin rollout of the new infrastructure in early 2008.
The business model for the electric cars will be similar to that used by mobile phone operators. In the same way that wireless operators deploy a network of cell towers to provide an area of mobile phone coverage, Project Better Place will establish a network of charging spots and battery exchange stations to provide ubiquitous access to electricity to power electric vehicles. The company will partner with car makers and source batteries so that consumers who subscribe to the network can get subsidized vehicles which are cheaper to buy and operate than today’s fuel-based cars. Consumers will still own their cars and will have multiple car models to choose from.
...we propose the creation of a ubiquitous infrastructure that can enable a car to automatically charge up its battery when parked, and on the exceptional long drive using an exchange station where an empty battery is replaced with a full on in automated lanes resembling car-wash devices positioned in gas stations across the country. We for the first time look at the car battery as part of the infrastructure system, not part of the car, much like the SIM card inside a cell phone is part of the network infrastructure which is residing inside the phone. Since the car owners do not own the battery they can freely exchange it as needed, not fearing the issue of receiving an “older battery” in exchange for a new one.
The collection of park and charge spots across a country or city, together with software that controls the timing for charging the cars, creates a smart grid—synchronized and extending the country’s existing electric grid, matching excess electricity on the grid with the need to charge batteries flattening the demand curve in the process. When we put together the charge points, the batteries, exchange stations, and the software that controls timing and routing we get a new class of infrastructure—the Electric Recharge Grid (ERG). A new category of companies will emerge in the next few years which will install, operate and service customers across this grid—called Electric Recharge Grid Operators (ERGOs). The business model for such operators will be similar to that of wireless phone operators, and so we can predict that a few years after the ERGOs, we will also see the emergence of virtual operators on top of the physical grid (or VGOs).—Project Better Place whitepaper
Project Better Place will deploy and test this framework over the next 24 months in a variety of launch markets, after which it plans to deploy hundreds of thousands of vehicles annually, across multiple markets. The company anticipates achieving “tipping-point saturation” in early markets within 10 years of rollout.
A pretty good idea. PBP should get in touch with Electric Vehicle Ass.(EVAs) around the world. London seems to be pushing toward Electric (at least zero pollution) Vehicles inside London. The Seattle Electric Vehicle Ass. has encouraged Seattle gov't & businesses & some EV charging sites in town & several out of town are available. Seems like many EVAs would like to see an inter-connected system.
Posted by: litesong | 29 October 2007 at 07:32 AM
Oh, yeah...don't forget the electric bicycles, scooters, mo-peds, & electric motorcycles either.
Posted by: litesong | 29 October 2007 at 07:37 AM
A forward looking company with $$$ and a good vision for future vehicle electrification. That's very positive.
Of course, charging stations will be able to handle 2, 3 and 4 wheels units. Worldwide trade will quickly force the required level of standardization as it did with TV, PC etc power supplies.
Meanwhile, our new condo (63) internal + (63) external parkings have all been equipped with 115/220 VAC 20 Amps outlets. (Timers will have to be added when variable rates are available). That should become a construction standard in the very near future.
Looking forward to our first PHEV in 20..?
Posted by: Harvey D | 29 October 2007 at 08:41 AM
A few charging stations around the mall or office park is a good idea, but I still don't think battery exchange will fly. IMHO, electric cars for long trips won't happen in my lifetime, and maybe never. But that's what HEVs and PHEVs are for.
BEVs are for commuting and shopping. The most important infrastructure change we need for the electrical grid is time-of-use metering and pricing. If I can buy a 20 kw-hr battery I'll want to help the utility level their demand profile, and save a buck in the process. It doesn't require a new company to implement that.
Posted by: JamesEE | 29 October 2007 at 09:32 AM
I see no mention of where exactly this is going to be rolled out. $200 million sounds like a lot of money, but in the world of electricity rid infrastructure, it isn't really all that much.
Posted by: Rafael Seidl | 29 October 2007 at 10:23 AM
Battery exchange concept is interesting but where do we get the electricity from? I suppose they are talking about rigging countries up with nuclear power plants. Personally I would not like to be near a nuclear power station if it is hit by a projectile of some sort. Also would the price of your property go down if you lived on the second floor and your car is parked down the street? I suppose it could work if we had a massive investment in renewable energy, perhaps a feed in tariff for renewable energy would be a good start.
Posted by: Mike Thompson | 29 October 2007 at 10:42 AM
From their press release, amongst the truckloads of hype: "the company will secure partnerships with a supply chain of car makers, technology providers, and global and local financing institutions."
I understand that the only thing they hope to sell is the idea of paying more for electricity in order to pay less for the electric car. Frankly, it is a stupid idea. Electric cars are very expensive, electricity is everywhere and cheap. Hackers will eventually find a way around the proprietary connector and recharge the car at home. Think satellite TV decoders.
I also understand they have abandoned last year's idea of building their own electric car, the "peace car", in a plant between Israel and Jordan.
It saddens me to see these jokers in Israel. Of all the countries, this one is the most motivated and the most able to lead the world towards life without fossil fuels. In reality, however, it lags badly behind Europe.
Posted by: manny | 29 October 2007 at 10:55 AM
One key infrastructure point would be the wide availability of charging points. That is, not only can someone charge up maybe at home and maybe at work, but also in mall parking lots, downtown garages, and other destination points. If you move to an apartment or change jobs, having commercial charging options around town means that your EV is less likely to become useless. If there are a lot of EVs in circulation, it becomes expensive to build the infrastructure and supply the electricity, so some fee needs to be paid to support all this, and someone will need to lay out the capital to get the infrastructure built in the first place. This is not a novel point.
My concern is with their business model. As the iPhone amply demonstrates, a key part of the cell phone business model is to lock the customer into one service provider by subsidizing the acquisition of the physical equipment, and then making that equipment incompatible with other providers. To the extent that with cell phones the only choice is between one gaint provider and another, this makes little difference. To the extent that electricity for EVs has "independent" providers -- that is, your wall socket -- a customer might (and probably should) hesitate to give up his ability to provide his own service at home (which may be cheaper than "network" rates, may be supplied by a solar panel on his roof, whatever) just to gain access to network service while at work.
Perhaps a successful model would involve having a simple 110 or 220 volt plug on the car for home use, along with a proprietary plug (at higher voltage, perhaps) for network use. Network stations could offer faster charging, save money by engaging in "smart grid" practices, offer convenient access points around town, etc. They would rely on the fact that few commercial parking providers are going to pay money to string up their own dumb, unmetered outlets, and pay money to supply electricity to them, when they could instead sign a contract with the network provider to install all those goodies and pay the parking provider some rent -- and afford it all by metering usage.
I don't know if the battery swapping idea has much merit -- it's been discussed here before -- but the basic point here is that someone has $200m to throw around to try to develop and roll out charging infrastructure and technology, and make it compatible with a business plan that can offer the prospect of profits, and thus attract the capital needed to get these things build on a wide scale.
Harvey D's building may have recently installed outlets on its own, but its going to take a good business plan to convince someone to build that sort of thing all over the place. That's what I think these people are searching for.
Posted by: NBK-Boston | 29 October 2007 at 11:32 AM
There might not be as much conflict & complexity as people propose.
I can find people to help charge my 4 12amp-hr electric bike batteries from 110 voltage easy when I don't mind a long charge time. But heavy EV travelers will need to recharge 50Kilowatt-hours minimum. Knowing Americans, they will 'need' many hundreds of kilowatt-hours to get their SUVs back on the road...& they'll 'need it now'...'times awasting'. A 110 or 220Volt line ain't goin' ta do it. My own envisioned tiny EV & slow life pace might be able to use that 220V line (maybe a 440V line?). Hey that voltage is really going up! & yes, some special business recharging system will be needed for more zap & scat than 440Volts! Hurry along folks.
Posted by: litesong | 29 October 2007 at 12:27 PM
That battery exchange is looking better & better.
Posted by: litesong | 29 October 2007 at 12:31 PM
lifesong - the battery exchange idea will only fly if they put some fairly strict controls on the operation. Think about how the condition of exchange units could start varying considerably in quality from unit to unit over time. I forsee a can of worms.
Posted by: Bob | 29 October 2007 at 03:24 PM
I saw a excerpt on CNBC. The battery exchange system works because the company OWNS THE CARS. You pay by month and mile (and maybe for excessive wear). The company pays for the electricity and all the wear. You own nothing. They say that its possible because while the cars and infrastructure are expensive the wear and tear and fuel cost overall is less.
They plan to setup charging stations in parking lots and battery exchange at many gas stations including rest stops.
They cited the improvements in batteries and the high cost of oil as making this all possible. No mention of where this might happen except for Israel and the UK specifically.
Posted by: hampden wireless | 29 October 2007 at 05:36 PM
I think the best market for battery exchange is the trucking industry. Semi trucks could easily carry large battery packs instead of large diesel engines. Plus I bet the trucking industry would like the idea of simply leasing the trucks/batteries and paying a flat monthly fee.
Posted by: David | 29 October 2007 at 07:22 PM
Let go of the rice.
Posted by: | 29 October 2007 at 10:15 PM
I agree with much that has been stated here, especially the part about $200M not being very much money when talking about shifting the transportation industry to electric vehicles.
Yes, we have to start somewhere, for as we have all seen, government officials have all been backed by Big Oil in U.S. for years, so government could have done something when first oil embargo woke us all up decades ago, yet nothing changed, except we are more oil dependent than ever. lol
It is nice to see that private industry and pressure from the people is driving demand for green alternatives, maybe this time the small inventors will survive, instead of being threatened as was the case for years when new fuel alternatives were introduced for the better of us all, except Big Oil.
Each day we get closer to solving this foreign oil dependency trap, so we must look at all alternative energy concepts, not just electric, but a combination is the only real answer. All this talk about power stations, battery exchanges, etc, are all stumbling blocks which need to be addressed before anyone will consider purchasing an electric vehicle. You have to have an infrastructure in place to support electric vehicles before people will purchase them, and it has to be convenient, and that will take decades unless we come up with an onboard charging system, that is the real answer.
Posted by: NanoDetonator | 30 October 2007 at 05:06 AM
The electricity will come from geothermal which is being developed massively in the western US states. There we have far more geothermal power potential than is needed to run the entire US electricity grid. Also, over the coming decades, more and more buildings will have solar installed and lighten the electricty grid load and allow such electrical cars to be charged by the home owner from solar power from their houses. It's the ideal solution and as everything else, will happen on a gradient switch during the next decades.
Posted by: Marc | 30 October 2007 at 10:50 AM
You are not correct in saying "nothing changed".
The auto industry underwent a massive change, with the technology then available. Cars were massively downsized in weight and space. Auto makers answers were downsized to the point were consumers were largely unsatisfied with the results. Cars that took excessive amounts of time and roadway to merge, and to pass, other vehicles.
Safety concerns were un-addressed and death rates climbed.
Further, there was a massive government response to create Synfuels.
The professional Cassandras of the day weren't predicting "Global Warming" but "Global Cooling". Population Bombs" and "Limits to
Growth", and Oil "running out" in 3-5 years. The doomsayers were wrong then, just as they are wrong now.
More drilling for Oil was stimulated, everywhere. Technological advance was accelerated, but solutions don't just pop up in a moment. It takes time to respond and find answers.
Over a few decades, automotive safety systems R&D for smaller vehicles, led to workable designs for airbags, side impacts, anti-skid brakes, real bumpers, seat belts, crush zones, roll cages, stability-control systems, et cetera.
Similarly, auto combustion technologies advanced and more power from smaller packages resulted. Mileage efficiency has increased by all automakers by 5.1% on average every year since the mid seventies. Not all went into mileage; lots of the improvement went into making safer and better vehicles.
The increased drilling made supplies more available and prices collapsed, just as economic reality predicts.
Autos then were able to regrow in size, to the size that consumers preferred, with power levels that consumers chose, while still producing continual increases in mileage.
R&D in alternatives to the ICE, have taken place; we have gone through two battery technologies (advanced lead-acid, and NiMH) and entering a third, Li-Ion, which finally has acceptable levels of Energy density and weight that can make Electrified Ground Transport both feasible and economic. The auto makers are preparing a flood of such vehicles starting in the model 2010 year. Two models year forward in time, is a locked in commitment to the automakers, that cannot be reversed, as factories are being modified, suppliers getting contracts for components, and commitments of all kinds being made.
Syn fuels are returning, but in a much more intelligent, economic form. Heavy tar like oils are being mined/pumped, and the Canadian Tar sands are being exploited, both of which are more economic that mining shale oil. Shale oil exploitation, will wait its turn, until the economics become attractive. As they should have done and would have done except that governmental central planners never read a P&L or Balance sheet. These are valid maps of economic reality, both present and future.
Increased oil supplies, with these price declines, bankrupted the uneconomic Syn fuels effort, washing it away.
Rather than say that nothing happened, you just have to take a better perspective, and see how far Mankind has come in only 25 years.
We are set for massive substitution for Oil; or which may be viewed as extraordinary fossil fuel mileage increases. To the point where another Oil price collapse is in the offing once again, by the late 2010s, (likely 2017-2020).
This time the collapse will be due to the Oil demand collapse, rather than from large Oil supply increases, which are also in prospect. Iraq Oil output is still off 2.5 million bbls/day, sooner or later peace will breakout; and Canadian Tar sands are slated for an increase of another 1-2.5 million bbls/day. Alt fuels might add another 1 million bbls/day equivalent to supplies.
Posted by: Stan Peterson | 30 October 2007 at 12:10 PM
Have USA/Canada built vehicles changed that much? My neighbour is complaining against his 17 mpg 2008 Chrysler. My 1968 Dodge Polara used to get 26 mpg and was bigger than the his new Chrysler. I fail to see the major changes you mentionned.
With the current increasing consumption rate, oil production will most probably peak before 2020. With China and India buying more and more vehicles, it is difficult to see a major oil consumption reduction in the near future.(short of a worldwide economic recession and/or accellerated electrification of ground transportation vehicles),
I prefer the second reason but will we do it?
Posted by: Harvey D | 31 October 2007 at 07:57 AM
Well, I'm ready to buy an electric vehicle and roof solar panels for my house!!!
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Posted by: jerry jiang | 08 December 2007 at 08:29 AM
Project Better Place (PBB)
The initials are PBP...so what does PBB stand for?
Posted by: sjc | 09 July 2008 at 07:48 AM
Shai Agassi's grand design is a project worthy of much praise and not skepticism. If the project comes to fruition it will be for the good of the environment and the world that we live in.
Posted by: Electric Car | 23 August 2008 at 04:13 AM
Why stick to 4-wheeled vehicles? My custom recumbent electric bike (with ordinary lead-acid batteries) already achieves 30-50 miles per charge and 200+ daily miles with household 110v recharge, and is as fast as any 4-wheeler in city driving (especially taking park%walk times into account).
Anything on 2 wheels uses 5-10x less electricity and virtually eliminates the need for new electric infrastructure.
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