Better Place Does Davos, but the Electric-Car Market Is Driving Away from It
The CEO of electric-car battery-swapping startup Better Place, Shai Agassi, is no stranger to the World Economic Forum in Davos. But his company is increasingly a stranger to the mainstream of the electric car business.
Better Place has a diverse business model, but its focus is battery swapping -- the notion that drivers will "refuel" electric cars by quickly exchanging depleted battery packs for freshly charged ones at "swap stations" -- and always has been. There's an argument for this sort of thing is in "island" countries and locations, such as Israel and Hawaii. But the rest of the EV industry thinks consumers will want to their battery to be a permanent part of their car.
This isn't to say that EVs from General Motors (GM), Ford (F), Nissan (NSANY) or any of the other more exotic brands, such as Tesla Motors (TSLA), won't be able to take advantage of battery swapping, some day. It's just that they're all basically set up now for either home charging or high-speed charging at stations that may eventually be as common as gas stations. Better Place vehicles will also be rechargeable, but the company is investing heavily in a networks of battery-swapping locations.
A good idea whose time has passed
Better Place has been around, as an idea in the marketplace, for half a decade now. When Agassi first proposed it, it had the ring of an alternative to the way people had thought about EVs up to that point.
He basically reconceptualized the electric car as more of a cell phone, a gadget with a battery that could be exchanged for a new one when the juice ran out. Because batteries were -- and still are -- the major expense associated with EVs, Better Place took that cost off the table and treated electrons like gasoline: When you run out, you simply pull into a swapping station to "fill up" with a new battery.
But automakers have now reduced the cost of the battery to the point where vehicles like the Chevy Volt, Nissan Leaf, and Ford Focus Electric are a viable option for consumers -- especially those who don't want the hassle of planning trips according to swapping station locations, but would rather know their basic range and calibrate their driving accordingly.
For Nissan and Ford, this is around 100 miles per charge. For the Volt, it's around 40 miles, which is then supplemented by a small gas motor that generates on-board electricity.
The small EV market versus the big one
This isn't to say that battery swapping can't work. It's just a question of the market. Better Place still has a chance to dominate in places like Israel -- small countries where the geography makes possible an easily understood network of swapping stations supported by home charging and fast-charging stations.
In larger markets, though, when you buy the car, you want to buy the battery. There are obvious reasons for this. You guarantee that your EV will do what you bought it to do, run on electricity, without being subjected to the vagaries of battery specifications. It's one thing to have three main fuel choices at the pump, quite another to pull into a swapping station and be subjected to the immediate challenge of having to figure out which new battery will be compatible with your car.
Business models can run out of juice
Better Place looked and sounded good when the EV revolution as just beginning. Now that it's matured, the cracks in its plan are obvious. The company will adapt, but the question is: Will it survive?
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Photo: Wikimedia Commons/David Terrar