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.