## Israel Corp. to Invest up to $100M More in Project Better Place EV Efforts; Agassi Pushing PBB for the US ##### 08 July 2008 Israel Corp., Israel’s largest holding company, will invest another$15.5 into Project Better Place (PBB) in addition to the $7.5 million already in. The company said it would invest up to$100 million in the venture designed to deploy a regional and global infrastructure to support electric vehicles on a country-by-country basis. (Earlier post.)

Israel Corp.’s announcement to the Tel Aviv Stock Exchange of the additional funding followed a presentation to the Israel Corp. board of the Better Place budget, including milestones and a fund-raising plan. Idan Ofer, Chairman of Israel Corp., is serving as Chairman of the Board of Project Better Place.

So far, Project Better Place has signed deals with Israel (earlier post) and Denmark (earlier post).

According to Globes, Project Better Place plans to launch a pilot with a few cars in Israel by year-end, and expand to several dozen more cars during 2009. The pilot will precede final development of regular electric cars by the Renault Nissan Alliance, which is partnering with Project Better Place.

In late June, Shai Agassi, founder and CEO of Project Better Place; Dominique Thormann, senior vice president of Nissan North America; and Torben Holm of DONG Energy A/S, Project Better Place’s partner in Denmark, testified before the US House of Representatives Select Committee on Energy Independence and Global Warming.

Agassi outlined the Project Better Place business plan and its potential in the US. Adopting a model similar to that of the cell phone, Agassi said,

...we rely not on a premium-priced new car model available only to a small part of the driving public. Instead, we offer a free or nearly free car and charge current operating costs on an ongoing basis—enabling all car owners to make the gasoline to electricity transition.

For the price of two months worth of oil, some $100 billion, we can put in place the infrastructure needed to power the nation’s cars and end this oil dependence. Of that$100 billion, moreover, some $80 billion will go into jobs that, by their nature, can only be performed in the United States—the construction of the infrastructure itself. ...This is not a moment for incrementalism, but for transformative thinking. Instead of exclusively oil, let’s enable our cars to run on electricity generated from a diversity of sources – and at the same time enable much greater flexibility in the grid by growing energy storage that can bridge intermittent renewable sources like solar, wind and tidal. How do we make these diverse energy sources relevant to transportation? We find a formula to get our automobiles onto the grid. Better Place, said Agassi, proposes deploying a ubiquitous network of charging spots, sufficient to support single-charge, all-electric trips of 120 miles or less. Better Place will also deploy range extension for long trips in the form of battery exchange stations&mdsah;automated, mechanical battery swap points—on major arteries linking urban areas. That makes the electric vehicle just as relevant for our longer driving trips. ...For the subscriber, just as with cell phone calling programs, there will be a menu of plans to suit different driving habits. Agassi said that Project Better Place is in “active discussions” with more than 30 other countries, and with dozens of regions, provinces, states and large cities. Many of those discussions, both in the US and globally, are well advanced. We anticipate that four to six other countries or regions will—in the coming months&mdsah;announce their intentions to take up the Better Place model, just as Israel and Denmark have done. There is no doubt that this progress has been helped along by the anxieties arising from the spike in oil prices. But our progress is not dependent on high gas prices. The Better Place model happens to have even greater appeal in a world of$4-per-gallon gas. But the model works—even when prices are drastically lower.

And just as it will work for Israel, Denmark and the other regions and localities we expect to come on line soon, it will work for the United States. Across this country, countless localities and regions present the same characteristics that make the model an appropriate fit elsewhere: density of population, reliance on personal vehicles, mature traffic infrastructures, all leading to in-built congestion. And as these localities and regions are built out, connecting them into a truly national grid becomes more and more feasible.

In his testimony, Thormann said that Nissan’s goal is to bring to market in the United States a fully electric automobile before the end of 2010.

At first, the number of vehicles will be relatively small but we plan to have a truly mass market vehicle available in the US by 2012. These electric vehicles will be cars the consumer will be happy to drive. They will have a range that will get them comfortably to work and back home with all the comfort and features they are used to today. They will handle highway speeds and permit the driver to comfortably merge into highway traffic. The acceleration will surprise many and make the vehicles fun to drive. As the market grows, different types and sizes of vehicles will be launched.

Holm of Dong Energy said that they have a very high degree of confidence that this model can and will work in Denmark.

We have also very high—but we believe quite realistic—expectations of the benefits this model will bring, for emissions, energy efficiency and individual consumers.

We have estimated, for example, that even if all of the electrical charging of cars was sourced from coal-fired power plants, net CO2 emissions would still decline by half because electric motors are 3-4 times more efficient than either gasoline or diesel ones. The more wind power we have, the higher the CO2 emissions improvements will be.

...both DONG Energy and the Danish government strongly support efforts to transform our transportation infrastructure from gasoline to electricity. There are, of course, supply constraints at present both from the auto manufacturing industry and amongst battery producers that we are working to address. There is also work underway to ensure that Denmark’s public policy framework works in favor of—or at least not counter to—this model. But we believe these challenges are surmountable. Indeed, we believe they must be surmounted if we are to break free from our oil dependency and secure the environmental, security and consumer benefits that this transformation can bring.

(A hat-tip to MannyGo!)

Installing the infrastructure takes a lot of money, and up till now, n o one could figure out how to make that money back.

Shai Agassi figured out how to make money ... lots of it ... from Electric cars. Remember that name, he is the next "Bill Gates" and will become the worlds richest man.

They should focus on geographically restricted areas first:

Israel and Denmark are a good start.

Hawaii and Puerto Rico should be next.

The Mediterranean islands of Sardegna, Corse, and Palma are also good candidates.

Farther down the line would be Taiwan and South Korea.

The geographically restricted nature of these sites make EVs very practical. You can't drive much more than 50 miles even if you wanted to.

GreenPlease: Why not restricted areas like New York, Boston, Atlanta, Miami, Houston, LA & SanFran? Systems need not begin nationwide. Plenty of drivers drive only within 100 miles of those locations, and many more have a second car that will take them further if needed. I am sure a lot of cab drivers in New York don't go outside a 100 mile radius. Start where the political and economic climate work.

To go along with the countries GreenPlease mentioned, I would also submit Japan as a great candidate for early adopters.

I'm hoping this works out. It's a pretty thought provoking idea whose time I think has come. Get working systems in Isreal and Denmark up and running, work the bugs out, then work on adopting the system elsewhere.

PBB will work right now for short commute distances and a progressive community...look for San Francisco or some other large city to embrace the idea on a smaller scale.

T. Boone Pickens recently said: "A fool with a plan is better than a genius without one and right now the U.S. has no plan"; inferring our federal leaders are fools. He also says there is no way to drill ourselves back to a reasonable price for gasoline. And BTW, he has plans to build the largest wind farm in the U.S.; an oil man who has moved out of the dark into the sun.

When this guys speaks, people listens...I hope the next President listens!

John Taylor:

Whoever manages to replace our dirty and often extreemly noisy gas guzzlers with clean and quiet electric vehicles deserves to get as rich as Bill Gates.

The world needs many more like him to replace:

1) all current dirty coal fires power plants with smokeless clean power sources such as high efficiency solar, wind, waves, geothermal and (with clean coal units, if it ever becomes possible to do) etc.

2) all existing-remaining dirty oil home furnaces with clean electric high performance heat pumps and other similar electric units.

3) all low performance (SEER 8 to 15) AC with ultra high performance (SEER 22 to 25+) heat pumps/AC units.

4) all existing highly polluting wood stoves and wood/NG fire places with clean electrical units, such as combined ultra high efficiency heat pump with an electric fire place. This last combined unit does not exist yet but somebody should invent and market it very soon.

I don't know why this guy gets so much air time.

We tried making an all-electric car that drove 50 or so miles. It was called the EV1. They weren't (largely) desirable because of the range problems. Lots of charging stations and battery-swapping sites is not going to fix that. PHEVs are a much better fix. They solve the range (and infrastructure) problems of BEVs with technology that is proven and mature (gears and ICEs). They use fewer batteries, so long term costs will be much cheaper compared with a fleet of socialized BEVs.

The cell phone sales strategy works for cell phones because after the infrastructure is in place, they are basically free to operate. It's easy to make money selling something (at low cost) that is basically free.

EV batteries are not free. Neither is the electricity to charge them. I think, in the long run, having your car tied up with some infrastructure monopoly that you need to keep paying in order to be able to MOVE is a very bad idea in the long run.

I'd rather have my own PHEV, with my own charger at home, that can run on flex-fuel. I don't want to be wrapped around some EV-provider.

Isn't it great how the U.S. gives Israel billions per year in aid and then they turn around and sell it back to us?

I'm seriously beginning to think that the (hugely unwarranted) push-back on PHEVs is due the the loss of tax revenue from gas sales. PBB probably sells well to governments because the monopolized infrastructure allows for the government to keep getting their tax cut from us.

That's a very bad idea. That's a bad way of determining energy policy; how they can best keep taxing us. If they gotta keep taxing us, they can always tax tires.

"I think, in the long run, having your car tied up with some infrastructure monopoly that you need to keep paying in order to be able to MOVE is a very bad idea in the long run."

Yes its a bad idea BUT its what we're already doing. 'In order to be able to move' we 'need to keep paying' the 'infrastructure monopoly' we call the Oil Industry.

Jim:

Many would agree with you.

PHEVs may be the best short term (5-10 years) solution, specially for people who have to drive long distances on a daily basis and for heavy long range vehicles

However, on a longer horizon (2015+), BEVs with higher performance quick charge batteries + ultra capacitors with 500+ Km driving range will represent the most appropriate personnal tranportation solution.

Basically, we had about 10+ years with Hybrids followed by 10- years with PHEVs to finally arrive to the BEV world.

All 3 phases will overlap by as much as one decade or so.

Electric transportation zealots please forgive this attempt at realistic analysis.

The Project Better Place (PBB) business model is tailored to mitigate against the current flaws in battery technology.

If another more effective technology evolves or current battery technology markedly improves, then this approach will be rapidly superannuated.

The only way this business model will succeed in the long run is battery technology stagnation at its current enfeebled level. This I don’t believe will happen.

As a possible alternate reality, I believe that the EEStor power unit has a high probability of success and that their business strategy and associated secrecy is directed toward protecting against the prospect of hostile action by large numbers of very powerful business competitors whose survival is threatened by their success.

The business framework that is developing around transportation energy storage is at risk of descending into a very bloody situation; the ferocity of which is only paralleled by its importance (shades of “Who Killed the Electric Car”).

Only the very rich and powerful or the very brave will dare to tread.

The situation is similar to the rise of Microsoft through the PC wars and the making of the Gates fortune.

Why is there never an engineering or economic assessment with Project Better Place?

1. The idea of leasing a battery means little. Whether I pay $800 for an EV w/ battery car payment or$400 for the car payment and a separate $400 for the battery lease - either way I am out$800.

2. If all the car companies can't agree on a common size lightbulb for a headlamp what makes us believe that they will all reserve a 3' x 4' x 2' cubic shape in the middle of the back seat or trunk for a battery bay that enables interchangeable/swapping batteries in 10 minutes.

3. The cost of battery packs for EV's is ~ $15K -$20K. Since many low end cars cost about \$20K, who is paying for the batteries and what part of PBP is funding Nickel, Manganese or Lithium mines since 65% of the cost of a battery is commodity raw materials?

What is really alluring here is simply that Shai is the only guy with a big idea and we are starving for a big idea. My suggestion is not to jump on this infeasible bandwagon but rather find your own big idea and make it happen.

Neil:

Agree with Jim Beyer and Neil,
The beauty of BEV and PHEV is that no new infrastructure will be needed.

For a BEV, it would be much easier to just swap cars than swapping a battery pack weighing 500-800 lbs. Just park a BEV at a car rental station and rent a gasoline car for long-range driving. For a PHEV, just fill'er up!

Roger:
Regarding just swapping cars vs. swapping battery packs: for germ-phob's like myself, that is an "icky" proposition to swap someone else's germ infested car with another one. Maybe I would consider the idea if the swap came with a complimentary bottle of sanitizer. :)

@Neil

If all the car companies can't agree on a common size lightbulb for a headlamp what makes us believe that they will all reserve a 3' x 4' x 2' cubic shape in the middle of the back seat or trunk for a battery bay that enables interchangeable/swapping batteries in 10 minutes

The key objective of a successful business model is proprietary technology. The seller wants to hook the buyer like a fish and reel him in, then keep him flapping for as long as possible until he gets so abused that he goes to somebody else’s hook. Most of the profit on a product is after sales of parts and services: “give them the razor but sell the blades”.

As a buyer, look for as much “industry standard content” as possible.

Project Better Place (PBB) is a proprietary technology trap.

As a buyer, you should keep clear of this scheme.

Many here seem to view this as a scam. Why so much negativity about this? I think if Shai can make this work, my hat's off to him. It's a bold step forward from where we currently are with EV's. I think PHEV's like the Volt are a great solution for the meantime in the U.S. Then, possibly future iterations of the Volt could have the PBB battery swap design built-in as an option as well oonce a PBB infrastructure is built. What's not to like here?

We appear to have more than one Neil around here now. Neil: greetings ... nice name.

re T. Boone, LOL, he was one of the guys that got George W into office (swift boating) ... you know George W .. the fool without a plan. T. Boone must be trying to clear his conscience.

Many prefer to own a car (ICE, Hybrid, PHEV or BEV), a house, a boat, a summer house and have a full time spouse.

Others prefer to rent (as required) a vehicle, a trailler, a house, a flat, a boat, a summer house and change spouse as often as possible.

It seems that more and more people are moving from Group A to Group B.

If so, PBP will succeed and variants will be progressively more successful.

Schmeltz,

You can put disposable seat cover and steering wheel cover on rental car, or disinfect it with Purel, still easier than battery swapping...Meanwhile, millions of people ride public transit everyday, sitting on seats that others have sat on, and holding on to handrails other have touched, and breath the germ-infested air that other have coughed or sneezed...Hmmm...

The problem with Agassi's idea is that the resources spent here could have been spent on building more solar energy collectors and wind turbines...Make more renewable electricity and HVDC lines before attempting to build unnecessary infrastructure for BEV's.

I've yet to see anything about PBB that appears to be a "technology trap" -- instead it looks to be attempting to actually develop an industry standard around battery size/shape. With this standard it's easy to build a network of distributed battery recharge/swap stations. PBB seems to address the key weaknesses of BEVs: battery cost and range.

Unfortunately, the automotive industry has a very poor history of standardization, so it remains to be seen how effective they will be. I have hope for either PBB or fast charge battery technology to let us see past hybrids and realize how much better pure EVs will be.

The Israelis sticking to the arabs where it really hurts. I love it!

Roger: What industry do you work in? It wouldn't happen to be connected with the H2 industry would it?

T. Boone Pickens, says we had peak oil in 2005. If this is true, PHEVs make sense for a interim period of time until long range BEVs are perfected to offset the ever increasing fuel costs.

PBB, even with its critics and flaws is a way to get the BEV ball rolling down hill and right now is the only bandwagon around...at least Agassi isn't standing around like our government and many of our citizens with his thumb up his exhaust pipe in denial and waiting for Lake Michigan to turn into oil.

@Roger Pharm:
Part of PBB includes moving to solar power, including wind energy in Denmark.

@Shawn

I've yet to see anything about PBB that appears to be a "technology trap" -- instead it looks to be attempting to actually develop an industry standard around battery size/shape.

A key component in proprietary technology is the appearance of a great deal up front; when the hook is well set, hank the line.

Remember when MS-Dos could be copied freely and everybody got that warm feeling about Microsoft; then bam! Set the hook.

You won’t know you got screwed until your well into the deal.

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