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Tue August 21, 2012
Don't Charge That Electric Car Battery; Just Change It
Originally published on Wed August 22, 2012 7:01 am
It looks like a bright new car wash, but it's a battery swapping station for electric cars in Israel. When a vehicle pulls up, it is slowly pulled through a conveyor. The spent battery is taken out and replaced with one that is fully charged. The entire process takes less than five minutes.
Better Place, a company based in Palo Alto, Calif., is the company that wants to spread this model around the world. It's taken several years and it's been a bumpy ride, but the company has now established a network of car battery replacement stations in Israel and Denmark.
The idea is to make battery replacement as quick and simple as filling up at a gas station, and thereby convince people that owning an electric car is just as convenient as owning one that's gas powered. If it works as planned, drivers of electric cars would no longer have to wait hours to recharge their electric batteries at an outlet.
Amit Lechim, who has had one of the Renault electric cars for about a month, says using the battery-switching station is proving relatively easy.
"Once you get used to it, it's wonderful, wonderful," he says. While the car is expensive to run, he says, at least he doesn't have to pay for fuel.
"And with the crazy prices of the gas, it's nice to know that you know how much you are going to pay," says Lechim.
A gallon of premium gas currently runs more than $9 in Israel, which has some of the most expensive gasoline in the world, according to a report published by Bloomberg last week.
Targeting The Israeli Market
The high price of gas is one incentive for Israelis to switch to electric cars. Also, Better Place is hoping that in a small country where drivers tend to travel relatively short distances, drivers will almost always be near a battery-changing station. That's one of the reasons Israel and Denmark where chosen as places to build the networks at this stage.
Better Place was launched in Israel in 2007, but it wasn't until this year that it actually got its electric cars on the road. The cars are being made by Renault in collaboration with Better Place.
So far, 17 battery-swapping stations are set up around Israel. The plan is to have up to 40.
But it has been a slow start for Better Place. There have been costly delays in rolling out the cars. According to Israel Corp., a stakeholder in Better Place, the company lost more than $200 million last year alone.
Slow Sales So Far
Since its launch in July, Better Place has sold 300 cars in Israel, far fewer than it would like. CEO Shai Agassi acknowledges that sales haven't been consistent.
"You have days when you have a lot of sales and days when you have one or two sales," he says. "Our goal is to get to roughly in the range of about 10 cars a day for consumers and about 10 cars a day for corporate by the end of the year."
Dan Rabinowitz, a professor at Tel Aviv University who has studied Better Place's model, sees more problems ahead.
He thinks the company lost a lot of potential consumers by not passing on the tax breaks the company got from the Israeli government. He says when the company first announced its plans, it cited a price that was extremely low by Israeli standards, where taxes on cars are upward of 50 percent. Now, five years later, the car is rolling off at triple that price.
"For some people it would appeal to them, but I would think that the numbers would be marginal and nowhere near the numbers, the 20 and 30 and 40 and 50 percent of the auto market that Better Place was forecasting," Rabinowitz says.
But Better Place says it isn't deterred. In addition to Israel and Denmark, the company hopes to have battery-changing stations soon in parts of the U.S. and Australia.
STEVE INSKEEP, HOST:
An Israeli company is finally selling its much-publicized electric cars. The company is called A Better Place. We've reported on it in the past on this program. And now we can tell you Better Place electric cars are finally on the road in Israel and in Denmark. Tara Todras-Whitehill has this report from Tel Aviv.
TARA TODRAS-WHITEHILL, BYLINE: It looks like a bright new car wash, but, in fact, it's a battery swapping station for Better Place's electric cars. When a vehicle pulls up, it's slowly dragged through a conveyor. The spent battery is taken out and a fully charged one replaces it. The entire process takes under five minutes.
AMIT LECHIM: My name is Amit Lechim. And I have the car, now, for a month now.
TODRAS-WHITEHILL: After years of preparation and hype, Better Place now has cars on the road in Israel, and the good news is people like them. Lechim says using the battery switching station is relatively easy.
LECHIM: Once you get used to it it's wonderful. It's wonderful.
TODRAS-WHITEHILL: Lechim says while the car is expensive to run, at least he doesn't have to pay for fuel.
LECHIM: It's just with the crazy prices of the gas, it's nice to know that you know how much you're going to pay.
TODRAS-WHITEHILL: Better Place was launched in Israel in 2007. But it wasn't until this summer that they actually got their cars on the road. The company's revolutionary plan was to allow users to swap out their car batteries in locations set up all around the country, that way drivers don't have to plug in their vehicles and wait for them to charge up to keep moving. So far there are 17 of these battery-swapping stations set up around Israel. The plan is to have up to 40.
But it's been a slow start for Better Place. There have been costly delays on the roll out date of the cars. According to Israel Corp., a stakeholder in Better Place, the company lost over $204 million last year alone. And since its launch in July, Better Place has only sold 300 cars here. Better Place CEO Shai Agassi acknowledges that sales haven't been consistent.
SHAI AGASSI: We have days when you got a lot of sales and you have days where you have one or two sales. Our goal is to get to roughly in the range of about 10 cars a day for consumers, and about 10 cars a day for corporate, by the end of the year.
TODRAS-WHITEHILL: Dan Rabinowitz, a professor at Tel Aviv University who has studied Better Place's model, sees more problems for the company ahead. He thinks it has lost a lot of consumers by not passing on the tax breaks the company got from the Israeli government. He says when the company first announced its plans it named a price that was extremely low by Israeli standards, where taxes on cars are upwards of 50 percent. But now, five years later, the car is rolling off at triple that price.
DAN RABINOWITZ: Some people, it would appeal to them, but I would have thought the numbers would be marginal. Nowhere near the 20 and 30 and 40 and 50 percent of the automobile market that Better Place were forecasting.
TODRAS-WHITEHILL: But Better Place says it won't be deterred. In addition to Israel, electric cars are on the road in Denmark. And there are hopes they will soon be on the road in parts of the United States and Australia. CEO Agassi says we are replacing oil with electricity. And this is just the beginning of what he hopes will be an electric revolution.
For NPR News, I'm Tara Todras-Whitehill in Tel Aviv.
(SOUNDBITE OF MUSIC)
INSKEEP: This is NPR News. Transcript provided by NPR, Copyright NPR.