How Better Place plans to revive the electric car

This interview was originally posted at CNET Australia. We have reposted it because the U.S. faces similar challenges to Australia in adopting electric-vehicle technology.

q&a We sat down with the CEO of Better Place Australia, Evan Thornley, to discuss how his company plans to make the electric car a reality in Australia.

Last year we reported on Better Place's deals with various national and state governments, such as Israel, Denmark, Hawaii, and California, to roll out infrastructure to assist in the adoption of electric vehicles (EV) from about 2011 onwards. This infrastructure will primarily consist of battery exchange stations, where drivers of Better Place compatible EVs can have their nearly depleted battery pack swapped out for a fully charged set, and EV charging points, located in homes as well as public places.

At the end of January, Evan Thornley was appointed as CEO of Better Place's Australian operations. Thornley was a founder of LookSmart and recently quit his seat in the Victorian State Parliament on the eve of his elevation to the ministry, raising the ire of the state's Liberal opposition. He and Guy Pross, the company's director of government affairs, sat down for a chat with CNET Australia about how Better Place plans to convert Australia's car fleet to electric vehicles.

CNET Australia: So why was Australia chosen?

Evan Thornley: Well, we think that this system works best for high-kilometer drivers. So the best way to prove that was to target a country which has plenty of those.

Could you please elaborate on how your system "works best for high-kilometer drivers?"

ET: Once the recharging infrastructure exists and the battery's sitting in the car, then, if you pay full commercial price for renewable energy, the energy costs of driving one kilometer down the road in an EV is about 1/7th the cost of driving that same kilometer using petrol.

Australia spends AU$20 billion to AU$30 billion a year on petrol, depending on the oil price and the currency. If we're able to convert the whole fleet over, then the renewable energy costs to power that fleet would be around AU$5 billion a year.

Who do we create the most value for the quickest then? The people who drive the most number of kilometers, because that's when we're displacing the largest amount of petrol. These drivers are the most attractive for us because, when you look at the lifetime cost of a car, much of it goes into the petrol tank not the vehicle itself.

But how is this going to work exactly?

Guy Pross: On current technology, 160km is the range of an electric vehicle's battery on a full charge. Israel is approximately that size and so too is Denmark.

We'll electrify, say, Sydney, Melbourne, and Brisbane, giving drivers a 160km range around Australia's three major cities, because we can already do that in Israel and Denmark. The big difference is that Australia is a very, very large country and there's about 1,000km each between those three centers. We can electrify the Hume Highway between Sydney and Melbourne by putting in 20 battery swap stations. At about AU$10 million, that's not a lot of money to connect Sydney and Melbourne.

Australia is more than just Sydney, Melbourne, and Brisbane. Won't it cost too much to put EV infrastructure across Australia?

ET: I think there's about 13,000 petrol stations throughout Australia. Our preliminary deployment plan currently estimates that we need 500 battery exchange stations. They're AU$0.5 million each, so that's AU$250 million. It's not a trivial amount, but it's not mind boggling. Plug-in points are actually a bigger investment, as there will be millions of them at a few hundred dollars each.

We currently estimate that building the network of plug-in points and battery exchange stations will cost between AU$1 billion and AU$1.25 billion. When all of that is in place, the car makers can make electric cars with the confidence that they will always be charged.

How will Better Place attempt to eliminate the cons?

Better Place hopes to remove the cons holding back electric vehicles by owning the battery pack installed in Better Place-compatible vehicles--consumers will probably pay per kilometer driven, although the company claims an "unlimited number" of possible pricing deals. This should make the price of EVs price competitive with petrol/diesel cars. While the battery exchange stations should ease consumers' concerns about touring range.

500 battery exchange stations and 160km range doesn't sound like comprehensive coverage of Australia...

GP: Currently the battery range is 160km, but before you know it, it's going to be hitting 250km, 350km, 400km and so on. When these batteries hit 400km, it's game over because, from the range perspective, it's equivalent to a petrol car. But until then we're a little more reliant on battery exchange.

If I buy a first-gen Better Place-compatible electric car with a battery range of 160km, and I'm still driving that car in five years time but battery tech has moved to 320km, will my batteries be upgraded?

ET: If that was your battery, it would suck. But it's not your battery, it's our battery. As batteries become depleted they can be repurposed to suit different target markets.

Eventually where there's no market in the world for which those batteries are suitable, we'll package them up into hospital emergency power packs and things like that. And when they're done, we'll mine the lithium, phosphate and the other materials out of them and repackage them into new batteries. The plastic, meanwhile, will be crushed, stripped, and recycled.

[With us] you will never have that battery technology risk that you have if you bought your own EV or a Chevy Volt. Where, if you buy one with a lemon of a battery, you'll have to fight with the car maker to get a new battery. Or, if your mate buys one a year after you with 30 percent better range, then it's bad luck for you.

Are there any other reasons why, with Better Place-compatible EVs, you guys own the battery?

GP: Separating the battery from the car is a key to our business. It not only takes that battery risk from you, but also saves you from purchasing the battery up front, which is a huge part of the cost of hybrid and electric vehicles.

What type of battery tech will be used?

ET: Lithium ion technology is coming out as the winner right now.

What if you want to trek across the desert; can you do that in an EV?

ET: I'm sure, within about 20 years, we'll have 99.8 percent network coverage. If you need to go through the Simpson Desert and we haven't put a battery exchange station on the Birdsville Track, then there will be a use for those types of specialized vehicles [powered by internal combustion engines]. Just like there's a use for satellite phones, in the very small number of places where the mobile phone network isn't there.

In the future that you envisage, is there any place for oil?

ET: We're a mission-driven organization; we want to get the world off oil. There's nothing good about it: fighting over it, paying for it, running out of it, or polluting the atmosphere with it.

ET: [When Shai Agassi was coming up with his initial Project Better Place white paper] he went through the stages of "how can we run a country without being dependent on oil?" He ruled out battery-operated planes, as well as ships, which pretty much left him with the land transportation sector, of which car transportation is a large component.

So what's the roll-out timetable?

ET: We haven't finalized a deployment plan. It will be rigorously detailed, down to every last plug-in point, which wind farms or thermal plants we'll be using, what the planning regulations are in each municipality, and our site acquisition strategy for the battery exchange stations. For instance, we could cut a deal with a particular chain of petrol stations, or we could put them in Coles or McDonald's car parks.

This plan is what we'll be working on over the next 12 months. As soon as we're confident we know what the answers will be, we'll unveil that plan in ever-greater levels of detail.

Israel will be the first deploy by the end of 2010.

GP: Depending on manufacturing strength there will be tens of thousands of electric cars by 2010 or 2011 in Israel. And then we'll be deploying in Denmark. Australia will be six months to a year behind Denmark.

We notice that Renault-Nissan has been announced as a partner. Who else will be making Better Place-compatible electric vehicles?

ET: As we speak, Renault's tooling up a 2 million car [manufacturing] line in Turkey. And we're now in conversation with all the automakers. Once we get another one or two of those on board, in addition to Renault-Nissan, then there will be critical mass. As we announce another couple of major partners, we suspect the rest of the car makers will have to roll over.

Let's assume everything rolls out as you see it. How will the car buying experience change?

ET: Walk into your dealer and, for at least a period of time, they'll have two versions of the car you're interested in buying: an electric version, and one with either a petrol or diesel engine. They'll look pretty similar. One of them will have a petrol cap, the other a plug-in point cap. If you open the hood they'll look a bit different, because the electric motor is a lot smaller and lighter but more powerful -- it will also miss an exhaust pipe. Apart from that though they'll look pretty similar.

Take each for a test drive and you'll notice that the electric vehicle's a bit zippier, especially in the low gears because, well, it doesn't have any gears. And the regenerative braking will take a little bit of getting used to, but the EV will be quieter and zippier, handle similarly, have a similar top speed and the same cargo capacity.

What about the day-to-day experience?

ET: When you decide to buy a car that runs on our network, we'll come and install a plug-in point for you at your home. You put the car in the garage, on the street, or wherever and plug it in. When you drive off, you just unplug it and go. Arrive at work and you'll plug in there, or forget to plug in there--it doesn't really matter unless you've got a long drive to work. Drive it home at night and keep it charged; that's all you need to do, no petrol stations. You don't even need to visit a battery exchange station until a month from now when you go to visit grandma who lives up the coast.

How long will a battery change take?

ET: About three minutes.

And how long would it take you to recharge an EV?

GP: A full charge would take about eight hours, although we're estimating that you'll never have to do that, because if you're that close to the bottom, you'll just go to a battery exchange station.

How will drivers be charged for recharging their car's batteries?

ET: We can bill you once a week or once a month for the kilometers that you've done. I can promise you we'll bill you less than it would have cost you for the petrol.

We've read about mobile phone-style billing plans, where you pay zero dollars for the car but more per kilometer...

ET: We could probably offer you that deal as well, because there's an unlimited number of ways you can price this system. The point is, you're not locked into a "you will fill this with 65 liters of petrol and you'll pay whatever the oil price is this week" as your only possible deal.

If you don't have a garage, where will you plug the car in when you're at home?

ET: We're going to work with local governments and the first plug-in points we'll be putting in will be in public spaces, such as public car parks, on the street-side, and in retail areas.

As customers come on board, we'll put a plug-in point in their homes. We'll even put one in grandma's home, too, if they'll be heading there a lot.

Can I charge a Better Place-compatible EV by plugging it into any old power point?

ET: No.

What type of renewable energy will power Better Place's plug-in points?

ET: Based on current economics it will be wind power. Also, with most of the recharging happening overnight, it actually works better for us than, say, solar power.

So will your plug-in points be on a separate electricity grid or the same one that everyone uses?

ET: It will be on the same grid, but it will be an intelligent network, and we'll have complete control over every plug-in point through the network-control center. There's a bunch of important reasons for this...

We'll know from the intelligence in the cars what the state of the battery is. This will give us a good understanding of what the driving patterns of that vehicle usually are and, therefore, how much charge is needed and when it's needed.

Through the network-control center we will be liaising back into the grid and our suppliers. This means we won't fill a battery or, say, a million batteries at 3 p.m. on a 40-degree day when the grid is already at peak load. We'll actually help the grid out by taking some of the charge out of those batteries and helping load balance the grid, and put the charge back in at 3 a.m. the following morning when the wind farms are spinning and there's no one taking the electricity.

By having an intelligent network, we can control how much charge goes in, when it goes in, if it comes out, which makes us a very beneficial partner for our utility partners and makes us a certain customer for our renewable energy suppliers.

Are there any other benefits of having an "intelligent network?"

ET: It'll also make our cars cheaper to insure, because if anyone tries to steal it, we'll shut it off the network and it can't go anywhere because we'll know where it is.

GP: We're in constant communication with the car and, because we've got a computer that's hardly used right now in the cars, what we're developing in Israel will allow all types of cool things.

For example, you can download content into the cars, so the TV screens in the back can show up-to-date TV content. You can also be connected to shops, so you can preorder food and then just drive in and pick it up.

That will be generation one. Once we have the network [up and running] we can add more, because we're a platform for new technology, like real-time insurance.

ET: For instance, your insurance company can offer you a 25 percent discount, because you're someone who actually doesn't speed, instead of being just someone who doesn't get caught speeding.

That's somewhat scary. What if you don't want to be tracked?

ET: We're going to have a whole range of privacy protocols and protections in place, like the ones in place with your mobile phone carrier and ISP. These things are very important to people; we're not going to go around violating people's privacy, and we're not going to do anything that people don't know that we're able to do or that they don't agree to.

However, as with most of these things, the benefits of the network far outweigh any of those concerns and if you can make sure people are comfortable--and it's very important that they're comfortable--then you can deliver them a ton of value.

Who's working on this stuff?

ET: Us. We're the network operator; this is what we know how to do. We've got a bunch of guys who built and sold three software companies before they started here.

If you do convert Australia's car fleet over to electricity, how much will it increase the country's electricity consumption?

ET: You could power the entire fleet in Australia and get an increase of 7 percent of load on the grid.

And let's say we're all driving renewable energy-powered EVs tomorrow, how much less greenhouse gas would we be putting into the atmosphere?

ET: The transportation fleet in Australia is 14 percent of greenhouse gas emissions. It's a lot higher in most other countries, it's just that we're so appalling with our power generation, with all our coal-fired power stations.

And this is an incredibly energy efficient thing we're doing. You know an electric motor is a 90 percent efficient device, while an internal combustion engine, if it hits 35 percent is one of the best engineered engines in the world.

Thanks for your time guys.