Can Better Place Sell A Real Electric Car For Under $20,000?
Financially speaking, electric cars are a tough sell in today’s economic climate. The handful of pure-electric cars for sale right now, like the Tesla Roadster, cost more than most people gross in two years of work. Even when you apply generous federal and state tax incentives, like those in Colorado, most of us simply can’t afford an electric car right now. With time, prices will come down, but how long must we wait for an affordable electric car that actually looks like a car?
If Better Place’s plan works, a true electric car could hit the West Coast of the U.S. as soon as 2012 for $20,000 or less before any tax incentives are applied.
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Better Place has a simple plan; sell the consumer a car, but keep the battery. Batteries are the Achilles heel of electric cars right now. They cost a lot of money, take a long time to charge (compared with filling a gas tank), and they are expensive. By removing the cost of the battery from the equation, Better Place believes they can sell EVs for $20,000 or less.
From there, Better Place assumes the role of your mileage dealer via a network of home charging stations and robotic battery swapping stations. You pay Better Place for the electricity to charge your car, simple as that. Your car purchase comes with a contract, and Better Place takes care of the battery. This isn’t unlike the suggestion that Nissan (which is currently allied with Renault) may lease out the battery on their compact LEAF all-electric car, due out sometime in the next year. Interestingly, Nissan-Renault’s global EV chief recently remarked to Gas 2.0 that battery swapping will likely not work in the United States.
Better Place already has contracts in place in both Denmark and Israel to provide 100,000 electric cars, and has since installed 1,000 EV charging stations around Israel and 100 in the Danish capital of Copenhagen. Next year, they will install the first battery-swapping station in Tokyo to test the feasibility of their swapping concept. If Better Place is to actually continue a relationship with the Renault-Nissan Alliance in the US, the Nissan part of that partnership would have to use the technology developed for Renault in other countries.
Personally, I like the idea of owning every part of my car, and the idea of being under contract to my car dealer isn’t all that appealing. Such a contract would no doubt carry stipulations and dozens of ways to void your warranty, and what happens if Better Place’s plan doesn’t quite work out? Are you left with a $20,000 paper weight?
But maybe that is me just being paranoid. I tend to do that.
Source: Green Car Advisor via Automotive News
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December 29th, 2009 at 12:06 pm
Well plenty of tiny EV builders look for a nice ICE vehicle, gut the engine, transmission and so and rebuild into an EV.
Start with an EV minus battery and that is going to be somewhat easier, just install a compatible battery system, perhaps…
If Nissan Leaf lease rates were to become uneconomic, I’m sure an alternative supplier could step in. Yeh I know, its not as simple as 2 terminal battery swap, no doubt lots of electronics inside the battery system to duplicate as well.
December 29th, 2009 at 9:32 pm
Electric cars are simple machines. The only thing holding them back is battery technology. The range and charge time has finally crossed the line into the acceptable area but cost is not even close yet.
I don’t mind the idea of leasing a battery. I don’t like the idea of swapping them to charge. I’d rather stick to the allotted range and charge it at home at night. Not a big deal in a two-car family.
You sure don’t want to buy an electric car that is not made by one of big auto companies. I know someone who bought one of the super golf cart flops that used lead batteries. It caught on fire one night. The fire department foamed it down. A flatbed pickup hauled it back to the dealer for a full refund, still throwing sparks.
I know another guy who owns a Sparrow and can’t keep it running.
December 30th, 2009 at 2:20 am
I think this is a brilliant businessmodel. Might work for other car makers too. Here is a thought to boost Ferrari sales: sell the body at a reduced price and lease the engine separately. A Ferrari would never seem more affordable!
So Yes I agree: if I buy I car I expect it to include all the parts that makes it a car, not just an empty shell.
December 30th, 2009 at 11:35 am
Please re-post)
Less than 20 car companies applied for $25 BILLION DOLLARS in taxpayer money managed by a certain smug group of people at DOE in order to get loans to make green cars for Americans. This was not all of DOE that did bad things, just a private cadre of men.
There was enough money to help every single one of the car companies that applied. The administrators applied their interpretations of the law in order to benefit the large lobby group-related firms and avoided every one of the“unconnected”independent American companies.
The amount of lobby and influence money spent is in direct ratio to the amount of money awarded.
The smaller companies, due to lower overhead, could have dramatically more productive results with the money than the large burdened companies yet the money was given out based on political career advantages for the administrators rather technology advantages for America.
All of the people that reviewed the applications had political and financial connections to GM, Ford, Chrysler and the large Detroit recipients.
Each of those smaller American companies had technology and resources that presented a strong economic threat, if they got the loans, to the large politically connected companies that did receive funds.
The Section 136 law was written to provide first-come-first serve funding but when the small companies got their applications in first while the big ones arrogantly felt that they did not even need to apply because it was already pre-staged for them, the ATVM officials changed the rules in order to remove the first-come-first-serve standard of the law in order to cut out the smaller independents.
Some of the companies that have gotten money have backed out of making the electric cars they said they would make. But they still get to keep the money.
The Section 136 Law was created by the lobbyists for GM, Ford & Chrysler when they saw that they were about to go bankrupt and wanted to tap into additional taxpayer dollars by claiming the money was going to be used for electric cars in order to win rapid support for Section 136 by tugging at heartstrings. In retrospect, the money mostly went to gasoline car projects. Multiple public hearings have already shown the sister loan guarantee program to have been a failed program via intentional delays, the head was fired and replaced & massive complaints have been filed by many.
Some of the companies that got the money have already wasted more money than other companies applied for as their total request.
Some of the companies that got taxpayer loan money are not even American companies and/or are doing their manufacturing offshore with non-American employees.
Those who got the money had to fill out little, or no, paperwork, went through little, or no, review and were connected to the DOE people who gave them the money. Those who they wanted to keep out were forced to jump through more hoops, were slow-tracked in review and had no connections.
The decision about who would get money was made in 2008 by a private group who then pretended there was a lengthy review throughout 2009 but in fact, the money was pre-wired for a select few.
All of the things that the rejected small companies (who did not pay lobby fees) were rejected for, were the same things that the insider big companies were doing.
December 30th, 2009 at 12:02 pm
I live in a two car household.
Leasing the battery is a great idea right now because all the risk of battery problems go to the owner of the battery instead of me. Also, I don’t need to worry about new battery technology making my car battery obsolete.
The promised range of 100miles is more than plenty for two days for me; any longer trips could be handled by changing batteries at a swap station. Swapping batteries in my car is no different for me than swapping batteries in my flashlight or camera.
Let’s get going – I’m impatient to get cars on the streets and a charger in my garage.
http://www.betterplace.com explains their approach.
December 30th, 2009 at 2:59 pm
Just sell us a simple car, that we can charge at home and get about forty miles on electric.
December 30th, 2009 at 3:21 pm
http://cleaninvest.wordpress.com/2009/12/08/will-project-better-place-really-work/
Not only will swapping not work in the US- it might not work anywhere for Better Place. See above link
December 30th, 2009 at 8:12 pm
BetterPlace is converting fix cost of battery into variable cost by leasing per mile (most likely bundle of miles).
ICE example:
10 years ago I bought Camry LE. Today it has 100,000 miles. My total cost including cost of car + Gas +Maintenance (including repainting) is less then $30,000.
If I have to pay $30,000 for BEV upfront, it’s way expensive. Paying upfront additional approx $10,000 has to justify by $15,000 in future saving if you count interest.
But, if you think EV is the only option, then BetterPalce is better option. Because it gives us freedom of using EV for other then daily commute like out of town trip.
Though we should ask our self few questions about BetterPlace.
Like:
1. BetterPlace is a business model or charity?
2. BetterPlace have primary goal is to make our place better or to make money?
3. Do you think cost of battery lease will go up with gas prices go up?
4. Think in terms of supply and demand. If you have opportunity to charge more money because of demand will you charge more?
5. If BetterPlace is not updating their batteries and battery’s range drops to half. Do you think you might get stranded in middle of nowhere because your estimation goes wrong?
So, I think, not only competition between car manufacturer needed, competition also needed between service provider like BetterPlace (Future Gas station alternate).