Getting charged up over service stations

Shai Agassi has a plan to create a network of service recharge stations for electric cars--and $200 million to make it happen.

Swap and go.

That's the business plan behind Project Better Place, an electric-car infrastructure effort headed up by former SAP executive . The organization wants to set up service stations where electric-car drivers can pull up, replace their batteries, and then drive another 150 miles or so before needing a recharge.

The plan ameliorates two big problems for electric cars: the long charge time and the limited range. Drivers wouldn't have to buy their batteries either, according to Agassi. They would lease them for a fee that would come to about what they would ordinarily spend on gas. That solves a third problem: the high cost of batteries.

But the service station model also depends on the cooperation of car and battery makers, component standardization, the willing help of governments and utilities, and a desire among consumers to buy electric cars. Some of these goals will be easier than others. The world will see how it works when the first stations open up in 2008.

In the meantime, Agassi this week announced $200 million in private venture capital from several backers, including Edgar Bronfman Jr. Agassi spoke with CNET about his new career, cutting down on greenhouse gases, and rolling up his sleeves to look under the hood.

Q: In your own words, what are you trying to achieve?
Agassi: Well, we're trying to achieve a world that does not depend on oil, does not pollute cities, and does not change the climate on the planet. I think we have a situation today where we've run out of oil and we're running a very uncontrolled experiment on the only planet we've figured out how to live on.

We're trying to achieve a world that does not depend on oil, does not pollute cities and does not change the climate on the planet.

We think that if you do it correctly, this is probably the biggest economic opportunity of the century. We're looking at about $6 trillion to $10 trillion a year spent around that problem, and our investors are very excited about getting into this opportunity at the beginning of what would probably be the next generation of personal transport.

People have tried electric cars before and the results haven't been great. When you look back at those earlier electric cars, even some of the ones coming out now, what have the chief problems been?
Agassi: I think the attempt to try and solve the entire problem by only working within the car itself is the fundamental problem. That was the fundamental element that was breaking the business of these corporations. If you think of putting a battery that only lasts for 200 charge cycles and goes for 70 miles on the charge--which is where the EV1 failed--that's not economically sustainable. If you have a battery that costs $10,000 and lasts for 14,000 miles, your cost of the battery is now 70 cents per mile.

You're trying to get a market where it's 5 cents a mile on gasoline. Why would anybody want a battery that costs 75 cents per mile? Luckily in the last 10 years, two things have happened. One, the price of oil went up from $10 a barrel to $93 a barrel today. Two, the technology in batteries allows us now to go on the same battery for 200,000 miles, not 20,000 miles. So the same $10,000 now actually takes you at 5 cents a mile, which before it took you 75 cents a mile. So, suddenly we've got an interesting situation: this technology that was more expensive before is actually the saner, cheaper, and cleaner solution.

You're also getting around the charge time issue too. Right now, electric cars take a few hours to charge. You're proposing building service stations where you go in, the spent battery gets dropped out, and a new battery gets popped in. You're charged right away with a new battery. It's similar to what they have in some municipal bus services.
Agassi: That's absolutely right. You've seen it in mini buses, but we suggested dual model. In the normal mode, you will charge your car when you stop it and park it, and go do whatever you do and you do it. I mean you come home at night, you park your car. You don't care what it does at night, right?

Then what's your infrastructure plan?
Agassi: We're looking at a number of transportation islands around the world as the first places to test. We're coming in and putting infrastructure, which is this combination of the charging spots in parking lots and buildings as well as these battery switch points where you're able to, as you said, drop a battery and put a full one back in. In our model you never own the battery, you never buy the battery, you never pay for the battery. It's just part of the infrastructure and you basically pay for it just like you do with gasoline.

What we offer you is something that other people cannot, which is I can give you a fixed price contract for your energy for driving for the next any number of years. I bet you that if we went down on the streets in San Francisco and you asked 10 people on the street, "Do you think the price of gasoline will go up or down in the next five years?" I know what they would say.

Oh, You could go anywhere and they say the same thing: up.
Agassi: That's the point. That's the price you're going to pay for a month, that's it.

Do you have islands lined up where you will go first?
Agassi: We've talked to about 15 countries so far, and we're getting great reception. We haven't announced the countries. Some of these are virtual islands, some of these are physical islands, I mean if you think about it, Hawaii is perfect...You've got places like Denmark, Israel, Hong Kong. I mean, there are a variety of different places around the world...If you look at these places, they are virtual transportation islands. Most of them are already set up in a way that will let you come in and plug into the grid. We don't need to start in Texas; we can start in Manhattan.

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