Later On

A blog written for those whose interests more or less match mine.

Maybe all-electric cars are the answer!

with 3 comments

Very interesting article on a serious venture to build an all-electric automobile to replace the gasoline-powered cars in Israel. Noted in the course of the article:

A grassroots movement of entrepreneurs has sprung up, and it could rescue the world from its oil dependency and gasoline-powered vehicles. So argue Ian Carson and Vijay V. Vaitheeswaran in their new book, Zoom: The Global Race to Fuel the Car of the Future. Carson and Vaitheeswaran call this the “Great Awakening.” They have little sympathy for the leaders of the energy and auto industries. “Big Oil clearly has no interest in seeing its main product fall by the wayside,” they write, “and the Detroit car industry has shown few signs of real innovation or long-term vision.”

The main article begins:

Just over a year ago, on Dec. 31, 2006, Shai Agassi settled into a leather couch in the office of Ehud Olmert to meet with the Israeli Prime Minister. Agassi, then a top executive at German software giant SAP, had come to pitch the idea of his native Israel reducing its dependence on oil by replacing gas-powered cars with electric ones. Olmert liked the concept but laid down a steep challenge: He wanted Agassi to raise hundreds of millions in venture capital and get an auto industry CEO on board before he would pledge his support. “You go find the money and find a major automaker who will commit to this, and I’ll give you the policy backing you need,” Olmert said.

Within a year, Agassi had pulled off everything Olmert had asked. He raised $200 million in venture capital and, with help from Israeli President Shimon Peres, persuaded Carlos Ghosn, the chief executive of Renault and Nissan, to make a new kind of electric car for the Israeli market. On Jan. 21, Agassi, Olmert, Peres, and Ghosn unveiled the novel project, under which Agassi’s Silicon Valley company, Better Place, will sell electric cars and build a network of locations where drivers can charge and replace batteries. Olmert has done his part, too. Israel just boosted the sales tax on gasoline-powered cars to as much as 60% and pledged to buy up old gas cars to get them off the road.

Agassi contends that Israel is just the start. He hopes to expand his business into several other countries over the next few years, with China, France, and Britain among the potential markets. Ultimately, he believes that his company and others like it could shake two pillars of the global economy, the $1.5 trillion-a-year auto industry and the $1.5 trillion-a-year market for gasoline. “If what I’m saying is right, this would be the largest economic dislocation in the history of capitalism,” says Agassi.

The odds of Agassi succeeding on a grand scale are incalculably long, especially when you consider his background. Up until last year, the 39-year-old had spent his entire career in the software industry, first as an entrepreneur and most recently as a leading contender for the CEO job at SAP, the world’s third-largest independent software company. He had no experience with energy or autos. Industry insiders are skeptical that anyone can put together a profitable network of electric service stations, because batteries are expensive and complicated to swap in and out. “It seems more like a pipe dream than a viable proposition,” says Menahem Anderman, president of Total Battery Consulting in Oregon House, Calif., which consults with major automakers and startups on battery issues.


Yet soaring oil prices and the threat of global warming give Agassi an opening. Governments worldwide, like Israel, are getting more serious about reducing their dependence on oil and are more concerned about the effect of carbon emissions on climate change. And the auto industry is placing large bets on alternative power vehicles like never before. At the North American International Auto Show in Detroit last week, Toyota Motor announced a plug-in hybrid vehicle, and startup Fisker Automotive unveiled its Karma hybrid sports car.

Agassi does bring a new perspective to the alternative fuel world. The trouble with traditional electric cars is that they can go only 50 or 100 miles and then they need to stop for hours to recharge their batteries. Hybrids overcome the mileage limitations, but only by burning gasoline. One of Agassi’s unconventional ideas is to separate the battery from the car. That will allow drivers to pull into a battery-swapping station, a car-wash-like contraption, and wait for 10 minutes while their spent batteries are lowered from the car and fully charged replacements are hoisted into place. Better Place will build the service stations, as well as hundreds of thousands of charging locations, similar to parking meters.

Agassi’s other unusual idea is for Better Place to operate as something akin to a mobile-phone carrier. He plans to sell electric cars to consumers at a relatively low price and then charge them monthly operating fees. The total cost of owning an electric car, including the up-front price and ongoing operating expenses, is expected to be less than that of a conventional car. At first, consumers will buy cars directly from Better Place, though later they could buy them from auto dealers with a Better Place service plan. Agassi hopes to begin testing the system by the end of this year and have tens of thousands of electric cars on Israel’s roads by 2011.

The approach has won Agassi support from some unlikely corners. Idan Ofer, chairman of Israel Corp., a leading refiner of oil in Israel, is one of his biggest backers even though Agassi’s technology could cut into demand for gasoline. “If I didn’t do it, somebody else will,” says Ofer. “What’s the point of fighting something that’s inevitable?” [Enlightened attitude, compared to most of Big Oil, which clings to the past – LG]

Still, Agassi has plenty of hurdles to overcome. Right now, Better Place has fewer than 20 employees in Silicon Valley and Israel. He must hire fast and raise the money to pay for the battery replacement stations, charging facilities, and the batteries themselves, which cost about $10,000 a pop. He plans to raise capital separately in each country where he operates. A lot of the basic details still have to be worked out, too, including the up-front price of the cars.

It’s been a whirlwind year for Agassi. While his wife and two children live in Silicon Valley, he has spent the past 12 months in airplanes, hotels, and conference rooms. He sleeps three to four hours a night. There’s no telling where he will turn up next: New York, Paris, Jerusalem, or Dalian, China. Last September, Stephan Dolezalek of VantagePoint Venture Partners, one of Silicon Valley’s largest venture firms and a Better Place investor, was in New York and got an e-mail from Agassi at 2 a.m. Curious, Dolezalek asked where he was. It turned out he was in the lobby of Dolezalek’s hotel conducting a late meeting.

Agassi has lived his entire life on fast-forward. Born in Israel, he soon moved with his parents to Argentina, but was back in Israel entering college at age 15. Three years later, he was struck by a car while crossing a Tel Aviv street, and his yearlong recovery stretched out his computer science education and truncated his mandatory military service. Still, he had started four tech companies by the time he joined SAP in 2001.

The roots of Agassi’s electric vehicle obsession go back two years…

Continue reading.

Written by Leisureguy

26 January 2008 at 11:04 am

3 Responses

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  1. Agassi’s scheme is totally stupid. In trying to provide sufficient range (even for a tiny country like Israel) Agassi has created an infrastructure that make the already too expensive battery packs that much more expensive. The absurdity of all this is that it is all totally unnecessary. Israel can easily eliminate all the gasoline demand she wants to simply by buying 40 mile or more plug-in hybrids. They can do everything that a battery -only electric car can. There would be a tiny amount of ethanol required, easily produced from within Israel’s borders. Israel is jumping onto an impractical bandwagon and will pay the price. Battery-only electrics make no sense at this point, either environmentally or economically. Plug-ins can do it all – in the much larger US, if the commuter fleet were all in 40 mile range plug-ins, gasoline demand for commuting would be reduced by 96%.


    kent beuchert

    26 January 2008 at 8:28 pm

  2. Well, “totally stupid” is quite a stretch. He seems to have convinced some knowledgeable people—people certainly having more knowledge than I about the automotive industry—that the plan is worth a shot. I think if it were indeed “totally stupid” he would not have gotten so far as he has.



    26 January 2008 at 8:31 pm

  3. I disagree with Ken in regards to his comment that battery EVs are not practical. Hundreds of us are still driving the Ford and toyota EVs from the zero emission mandate in California back in the 90’s. These SUVs and trucks have enough range to drive all over Israel on a single charge. The batteries, Nickel Metal Hydride (NiMH) have proven to be quite robust and long lived. We’re 6-7 years into these cars with little to no battery degradation, and many of these vehicles have gone way past 100,000 miles.

    I do agree with Ken in that the battery swapping idea is useless. With the short driving distances in Israel, there is virtually no need for this expensive infrastructure. For something like this to work, all the participating car makers will have to standardize the battery packs as well as the mechanisms for installing and releasing them. I seriously doubt you’ll get any two car makers to agree with that, much less most of them.

    Charging a 150 mile range EV over night at one’s home is easy. there is plenty of cheap available electricity at night in all industrialized countries. Further, the charging infrastructure for convenience charging in the daytime can easily be build out by installing plugs at all parking garages and surface lots. With all the abundant sunshine in Israel, solar shade structures can be built any place where cars park and the sun shines. I use them here in Los Angeles all the time. Whether I’m relaxing at the beach, shopping for food or furniture, or just taking in a movie, my car is sipping from the sun.

    Once people experience driving on renewable electricity, there is no going back to filthy oil.

    As for plug-in hybrids (PHEVs), Ken is absolutely right that they will be big sellers. The future will absolutely be a combination of both pure EVs and PHEVs. I don’t think they will be as needed in Israel as the U.S. where we have much greater distances to travel, but there will be a good market for them.


    Paul Scott

    27 January 2008 at 11:20 am

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