Better Place has a savvy plan for getting the world to switch from gas to electric cars, but there’s no guarantee that it will be the company to execute the plan.
Nissan and Better Place say that while they’ve partnered in Israel and Denmark to test out charging infrastructure for electric cars, there’s no exclusive deal in place to work together in the future. The trick for Better Place, as near as we can tell, is that it could be left in the cold if the tests are successful.
Better Place would like to own the battery to the car, and then lease that to customers. This lowers the cost of the car, and instead of paying for gas; a driver pays for miles, just like we pay for minutes with cell phones. The problem for Better Place is that it doesn’t make batteries. Nissan, on the other hand, does.
Nissan is the 51% owner of AESC, a joint venture with NEC that’s developing batteries for electric cars. Nissan is quite proud and protective of the battery they’re building. A Nissan rep calls the battery the intellectual property of the car. It’s what differentiates Nissan from its competitors and it is not a commodity.
It sounds like Nissan will do all it can to protect its battery and max out its revenue. To get that battery from Nissan, Better Place will have to pay.
At an event to test-drive Nissan’s electric prototype, dealers in attendance were nervous about electric cars. With fewer parts, the cars need less maintenance. To keep customers coming back, they might be interested in a leasing plan. This way, every two years, a driver comes back to the dealer, just like we upgrade cell phones every two years. If Better Place is the company that controls that plan, then customers go visit Better Place, not the dealers. That hurts dealers, which hurts Nissan.
Maybe Nissan and its dealers don’t want the headache of monitoring customers on a regular basis. Better Place, would also argue that it’s a total solution for drivers, as it has swapping stations and integrated software. A Better Place rep also points out that Nokia doesn’t make cell towers, but Vodafone does. A similar division could occur with electric cars.
However, if it’s going to make a big enough profit to justify the hundreds of millions of dollars its raised, that looks like an opportunity we can’t imagine Nissan–or any other car company–will pass up.
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