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Study: To speed electric cars to market, sell batteries separately

University of California at Berkeley analysis recommends that "pay-per-mile" driving plans will accelerate environmental and economic benefits of electric vehicles.

To get more electric vehicles on the road, consumers should have the option to essentially lease the batteries, a University of California at Berkeley study argues.

The UC Berkeley Center for Entrepreneurship & Technology on Monday released an analysis that found that there are environmental and economic benefits to adopting electric vehicles, but the high cost of batteries is a persistent problem that remains a barrier to buyers.

A test at Better Place's automated battery-swapping station in Japan earlier this year. Better Place

The study's author, economist Thomas Becker, argues that pay-per-mile service contracts--the rough equivalent of buying a service contract with a cell phone--and swappable batterieswill hasten adoption rates. Separating the cost of the battery from the car will lower the upfront cost and battery-changing stations will give consumers more confidence that electric vehicles are reliable, he said.

Becker predicts that this sort of purchase will account for 64 percent of light vehicle sales by 2030. Calculating that electric vehicles are 10 to 13 cents per mile cheaper to own than gasoline cars, Becker forecasts that electric vehicles could account for 24 percent of the light-vehicle fleet by 2030.

The business model that Berkeley advocates is essentially what the company Better Place is pursuing. When consumers purchase an all-electric car covered in the Better Place plan, the company owns the batteries. Consumers get an electric charger at their home and access to battery-swapping stations. And consumer purchase one of a few monthly driving plans that correspond to different distances, according to Better Place

A number of governments have signed on for the initiative with the first network of home charging stations and swapping stations expected in Israel in the next few years.

Although Berkeley's Becker argues that separating batteries from electric vehicles will usher in mass adoption of electric vehicles, no other companies have been formed to offer a similar service. Better Place has signed on one car manufacturer--Renault-Nissan--to make cars with batteries that can be swapped out by machines.

Still, other car company executives have said that they are exploring battery leasing options that would give consumers the ability to upgrade batteries after a few years. Electric car maker Tesla Motors plans to include a swappable battery with the Model S sedan.

Separately, Better Place on Monday released results from an Ipsos survey that Better Place commissioned which showed strong consumer interest in electric vehicles, although for different reasons.

It found that 30 percent of U.S. car buyers are interested in going electric for their next vehicle with other countries that Better Place is pursuing showing even higher levels of interest.

The study found that the top concerns for wanting to buy an electric vehicle are reducing U.S. dependence on foreign oil, concerns over air pollution or climate change, and concerns over terrorism.