Better Place’s CEO Shai Agassi wowed the eggheads at the TED conference with his stump speech about cutting carbon emissions by making all cars electric. The video just came online recently, we’ve embedded it below.
While he talks a big, dreamy, game he fails to address a number of problems with Better Place’s plan.
Here’s how Better Place works: If we purchase a new electric car, we get the car, without any battery in it. Then we lease the battery from Better Place. A Better Place spokesperson tells us this makes more competitive the pricing between gas cars and electric ones, since batteries cost an average of $15,000.
After signing up with Better Place, it then puts charging stations in our home and at work as part of our battery mileage plan. Those cost Better Place $500 to install. The company then charges for all the electricity used to juice the car the way a cell phone company bills per minute used for talking.
How much does Better Place charge for all this? Better Place told us it doesn’t break out “the specifics of our revenue model.” Maybe that’s because they’d be astronomical.
As Earth2Tech pointed out earlier this year, building out each Better Place infrastructure project could cost more than a billion dollars. Better Place raised $642 million to start its Australian build out. So, to return the money and still profit means the company will need to charge quite a bit for its electric car miles minutes.
If it were simply about charging for electricity it wouldn’t be so tough. However, Agassi plans to land smack dab in the centre of an amazing amount of connections. He needs car companies to create standard batteries, which hasn’t happened yet, as well as standard car shapes so that Better Place can swap batteries easily. That too hasn’t happened yet, either.
Next, he needs consumers to pick the Better Place subscription model over other options like plugging it into the wall at home or using a competitor such as Coulomb Technologies, which provides charging stations.
If that weren’t enough, Agassi insists on using clean energy like solar and wind. So he’s going to have to convince states, countries, towns and utilities to all work towards building cleaner electricity just so his car company can use it. How much will that cost? A lot. Building a wind turbine isn’t cheap.
When these problems are brought up, as they were by CBS in March, San Fransisco’s mayor Gavin Newsome responded, “Prove us wrong, don’t assume us wrong.” What kind of nonsense answer is that to a serious question? Newsome is on board to work with Better Place. Agassi’s response to CBS was “9 people out of 10 say it’s crazy, but the other ones say, ‘Where can I put my money.'” Another non-answer to the problem.
What the company lacks in answers it makes up for in hubris. During his TED speech, Agassi says he was told by Shimon Peres he needed to quit his job (he was being groomed to be CEO of SAP) to save the world by running Better Place. If you really think you’re going to save the world with an electric car details like cost and revenue–you know, a real business plan–probably seems like a trifling matter.
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