Bill Clinton Told Better Place CEO: Electric Cars Should Be Free
As any entrepreneur will tell you, starting a business isn't easy.
Few know this more than Shai Agassi, founder of battery-swapping outfit Better Place. The company is making huge losses, has closed operations in some countries and even booted out Agassi himself as CEO.
Still, Agassi is one of few who can claim a former President of the United States helped him bring his dream to life--or at least, offered him some advice.
In a post on business networking service LinkedIn, Agassi details how the best advice he ever received was from President Bill Clinton at a conference in 2006.
Agassi hadn't yet started Better Place back then, and was instead thinking of selling electric cars and their batteries for around $32,000.
Speaking to Clinton, Agassi said he reckoned drivers would pay up the initial outlay for the savings they'd see over 8-12 years.
He recounts how Clinton absorbed his idea, before saying, "By the time you will convince the rich folks in Israel to try it, then get the average folks in Israel to try it, then bring it to the US for our rich folks... the world will run out of time."
It didn't stop there, either.
"You need to price your car so that an average Joe would prefer it over the kind of cars they buy today--an 8-year-old used gasoline car, selling for less than $3,000. As a matter of fact, if you can give away your car for free, that's a sure way to succeed." added Clinton.
A free electric car? That'd certainly get people interested, but the business case is harder to justify. Agassi said as much--"How do you give away a car for free and still make money?" he asked.
"I don't know... you're the smart man around here" replied Clinton. Agassi notes how it's funnier now than it was at the time, but it did lead him on to a different way of thinking. If not free, he'd reduce the price of the cars, and make people pay a monthly fee for the battery--bringing down the initial cost.
Better Place works on this basis using Renault's battery rental process. It also offers swaps to full, charged packs at dedicated stations around Israel and Denmark, the company's two main markets.
Slow sales and high losses are demonstrating just how hard it is to get people on board, but Agassi remains positive.
He cites how cell phone and satellite TV operators have enough of a margin from their service they can subsidize the products themselves--on the right cell phone contract, you can get a hundreds-of-dollars iPhone for very little, or even free.
Range limitations are the main stumbling block, suggests Agassi, but as battery tech improves he sees the Better Place business model becoming increasingly attractive.
The market will decide that, we guess--but if it works, Agassi has a former U.S. President to thank for the idea.
_______________________
This article originally appeared at Green Car Reports.
