By John Addison (8/18/10)
Hot, Flat, and Crowded
An entire nation will be covered in 2011 with electric car charge stations. One car company has received a non-binding order for 100,000 electric cars. The company managing the entire project is Better Place, headquartered in Silicon Valley USA. Israel is the nation that desperately wants to end its dependency on oil from hostile neighbors. Renault is the French company supplying up to 100,000 vehicles.
The advanced lithium-ion batteries are made by AESC, a joint venture of Nissan-NEC. Any car with a depleted lithium battery can be recharged in hours or simply have a robot switch in a new battery in one minute. By the end of 2011, Israel will have 70 robotic switching stations so that cars can cross the nation without waiting for recharging.
Electrifying the transportation of a nation takes a lot of money. Better Place has over $200 million from venture capital investors. Better Place just received an added $350 million from HSBC, a financial giant with deep roots in Hong Kong.
The vehicle electrification of a nation involving technology and financial partners from many countries could be a poster child for Thomas Friedman’s bestseller Hot, Flat, and Crowded. In electrifying a nation’s automotive transportation, Better Place will provide program management, system integration, large-scale project financing, vehicle procurement, battery switch stations, and a network of charging stations. Better Place will deploy its sophisticated software services to support the network of charging stations, provider driver information such as the location of the nearest public switch station or charging unit, and provide the electric utility with all needed information.
Hugh McDermott, VP Global Utility Alliances for Better Place, included some details of the Israel project when I attended his presentation at Plug-In 2010 Conference. Already operational in Israel are a few Renaults converted to be plug-ins, a few charging stations, and two Better Place battery switch stations. Better Place will conduct a full system test of the network of charge and switch stations, including software, by October 1, 2010.
Thousands of new Renault Fluence Z.E., a stylish battery-electric 4 door sedan that seats 5, will be in daily use in Israel by the end of 2011. All of the new Fluences will support Level 2 smart charging with J1772 connectors. All will have removable lithium batteries that can be robotically switched in about 3 minutes. Fifty to 100 of the new Renaults will be in Israel by the end of 2010.
Better Place CEO states that he has placed an order for 100,000 electric cars from Renault; the Renault-Nissan Alliance states that 100,000 is a memorandum of understanding. In either case, the agreement is likely to result in thousands of Renault Fluences being delivered with switchable batteries.
150 fleet owners have signed to take delivery of the Renaults by the end of 2011. Thousands of individual orders are also expected. By the end next year, 1,000 Better Place charging stations will be available for these electric Renaults and other plug-in vehicles. Twenty battery switch stations are expected to be installed by the end of 2011. 70 stations would give all drivers in the nation a location every 25 miles to have a fully-charged battery in minutes. By law, all vehicles in Israel must be electric by 2020.
Shai Agassi’s Vision
Last month, I attended a speech by Shai Agassi, Better Place’s CEO and founder. TIME Magazine named him to the 2009 TIME 100, the world’s 100 most influential people, and one of TIME’s “Heroes of the Environment 2008.” He passionately spoke of a better world, cleaner air, reduction of climate risk, and energy security. He sees electric cars as less expensive over their lifetime and falling prices as battery price performance continues to improve. He envisions batteries being charged with renewable energy.
Shai Agassi envisions Better Place removing the higher upfront cost of an electric car, by allowing customers to lease or subscribe to the vehicles, batteries, and charging, much as your wireless provider includes mobile phones with wireless subscription plans. His speech emphasized the need for cars with switchable batteries, so that drivers could have the same “fast fill-up” experience that they now get at a gasoline station.
The subscription model is great. The program and project financing capabilities are welcome by the industry. Most auto makers do not want switchable batteries. Whether I talk with Ford, Toyota, or GM, battery packs are seen by automakers as their core competency. Most welcome the battery cells being made by battery giants, especially if they have a joint venture partnership, but the pack design, shape, and vehicle integration are seen as core to the automakers.
The Renault-Nissan Alliance is open to battery switching. The Alliance is investing $5 billion in the development of electric cars. In 2011, Nissan plans to sell over 20,000 LEAF electric cars in the U.S. alone. Nissan future plant in Tennessee has the capacity of making 150,000 electric cars per year. The lithium-ion battery pack in the LEAF is not removable. In fact, it is shaped and placed for passenger comfort and car weight balance, not for switching.
Battery packs for Nissan and Renault electric cars are made by AESC, a joint venture between electronics giant NEC and Nissan. AESC also makes the removable battery pack for the Renault Fluence.
Renault will be selling four Z.E. (zero emission) models in 15 European and other countries in 2012: the Fluence larger 4 door sedan, the Zoe young-hip subcompact 4 seat city car, the Twizy 2-seater reminiscent of the GEM, and the Kangoo Van for commercial fleets. Nissan will be selling the LEAF in the U.S. Renault has no announced plans to sell the Z.E. family in the U.S.
Better Place’s battery switching could be a fairly ideal way to electrify millions of fleet vehicles globally. Better Place battery-switching is already being demonstrated at Nihon Kotsu, Tokyo’s largest taxi operator. Better Place is developing a partnership with Cherry Automobile in China. Large taxi and other fleets are in discussion with Better Place from San Francisco to Shanghai, and from Chicago to Copenhagen.
Although most major auto makers are unlikely to embrace switchable batteries for consumer cars, they would be open to business partners who purchase electric cars in volume and then provide them to consumers in a low-cost lease that includes vehicle charging and no worries about long-term battery depletion.
Better Place is positioned to be successful, even if battery-switching is confined to millions of fleet vehicles. Communities need program managers to pull all the smart charging infrastructure pieces together, finance vehicles and infrastructure, and provide the network software services to manage.
Shai Agassi was an executive at Apple and SAP. He has personally been part of taking disruptive technology and business models and making them billion dollar successes. In cities around the world his team and partners are creating a Better Place.