The Energy Blog: Startup Plans on Establishing Grids to Sell Electricity for Recharging Electric Cars

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October 29, 2007

Startup Plans on Establishing Grids to Sell Electricity for Recharging Electric Cars

Shai Agassi, former SAP executive, announced today the formation of Project Better Place, a company based on one of the 21st century’s biggest challenges – developing a sustainable, environmental solution for converting country-wide transportation systems toward electricity and away from fossil fuel. Electric vehicles would be enabled through an electric recharge grid infrastructure and using charge spots and battery exchange stations. In one of the largest-ever initial fundings for a startup, the company has raised $200 million from a group of investors lead by Israel Corp. The energy cost of all-electric cars would be about 7 cents a mile which is less than a third of the cost of driving a gasoline-powered car today.

Project Better Place will focus in phase one on establishing a repeatable infrastructure to support electric vehicles, implementing electric recharge grids through local operating companies in multiple countries. They will establish a widespread grid of electric charging spots at current parking locations as well as battery exchange stations, analogous to gas stations, all of which are integrated with software systems. These capabilities will provide consumers with the energy to keep their cars charged and driving without the need to wait for electricity at any point. The new grid presents a practical solution to address barriers to electric vehicle adoption.

In addition, the company will secure partnerships with a supply chain of car makers, technology providers, and global and local financing institutions. The company is currently in discussions with various governments to establish pilot sites, with plans to begin rollout of the new infrastructure in early 2008.

Two events have made this concept possible 1) increasing costs of fuel for cars and 2) the emergence of a new generation of batteries - Lithium Iron Phosphate (LiFePO4) - able to sustain more charge cycles and based on safe chemistry that can be put into a car. Having convenient automated battery exchange stations where the leased batteries can be swapped out, in a few minutes, for a fully recharged battery eliminates concerns over the life of the batteries as well as enabling trips longer than can be achieved with a single charge. Within a decade, the cost of energy for a single year of fuel supply for a combustion car should cost more than the cost of energy for an electric car’s entire life, even when taking the cost of battery into consideration.

“Our global economy urgently needs an environmentally clean and sustainable approach to energy and transportation. We need to rethink how to bring together consumers, existing technology, and the entire car eco-system to establish the next generation infrastructure that provides energy for commuters and is not dependent on liquid fuels,” said Mr. Agassi. “We have crossed a historic threshold where electricity and batteries provide a cheaper alternative for consumers. Existing technology, coupled with the right business model and a scalable infrastructure can provide an immediate solution and significantly decrease carbon emissions.”

The company has entered into a term sheet for its first round of funding in the amount of $200 million with investments from Israel Corp., Morgan Stanley, VantagePoint Venture Partners, and a group of individual private investors managed by Michael Granoff, which includes James Wolfensohn, Edgar Bronfman, Sr. and Musea Ventures.

Shai Agassi, 39 will serve as CEO of the new entity, while Idan Ofer, Chairman of Israel Corp., will serve as Chairman of the Board.

Project Better Place will establish a network of charging spots and battery exchange stations to provide ubiquitous access to electricity to power electric vehicles. They will deploy and test this framework over the next 24 months in a variety of launch markets, after which it plans to deploy hundreds of thousands of vehicles annually, across multiple markets. The company anticipates achieving tipping-point saturation in early markets within 10 years of rollout.The company will partner with car makers and source batteries so that consumers who subscribe to the network can get subsidized vehicles which are cheaper to buy and operate than today’s fuel-based cars. Consumers will still own their cars and will have multiple car models to choose from.

Project Better Place plans to begin the test phase of the new infrastructure using high-consumption professional consumers, such as taxis or delivery vehicles, rolling out the deployment country by country, metropolitan by metropolitan. They expect the first wave within the pilot countries to begin in early 2008, broadening to a few 1000 cars by 2009 with the expectation that they will be able to put approximately 10,000 cars on the system per month in 2010 for a total of approximately 100,000 cars on the system in each pilot site by the end of 2010.

Through subscription models, vehicle owners will be linked into a nationwide network of charge spots and exchange stations. When a consumer parks his or her car, the network synchronizes the car with the smart electric grid to recharge the battery. When a driver travels long-distance, he or she can swap batteries at an exchange station to get a fully charged battery, similar to how we now stop to fill our gas tanks today.

This may be viewed by some as quite a departure from the oil based infrastructure we have for conventional cars, hybrids and even plug-in hybrids, but it is quite analogous if you consider the battery exchange stations as equivalent to gas stations. With the exchange stations located at existing gas stations the cost of building the infrastructure will be reduced. The batteries at the exchange stations can be tested before recharging to determine their condition. Charging of the batteries could be done using off-peak power, thus making no expansion of the electric grid required for a couple of decades.

The concept is very valid for metropolitan areas and relatively small countries. When enough vehicles are in use the cost effectiveness of long distance travel becomes much better.

I get the impression that it would not be possible to charge the batteries overnight, at home, as it would deprive the company from income. If this is the case it causes a major inconvenience which could kill the project, as well as reduce the use of off-peak power.

This is quite an undertaking for a startup company, which may receive opposition from the big car companies and may initially be limited by the number of cars that can be offered by electric vehicle producers. The most innovative idea for a company that I have seen in some time. Best of luck to Project Better Place.

EDF is installing 250 charging stations in the UK, previous post, with about 200 of them expected to be deployed in London with a further 50 planned for other cities including Brighton and Sheffield by April 2008.

October 29, 2007 at 03:58 PM in Batteries, Electric Vehicles, General Interest | Permalink

Comments

I'd love to see this vision happen, but I could easily see a standards war for battery packs crippling the battery exchange idea.

Posted by: Tom Konrad | October 29, 2007 at 05:26 PM

If battery packs continue to be high cost items, I would forsee some potential for some users to abuse the system, trying to pass off bad batteries etc. Perhaps with decent accounting and testing this can be avoided. Also easily swopped batteries, would imply that they are easy to remove, they may make a tempting target for thieves.

Posted by: bigTom | October 29, 2007 at 07:17 PM

“Existing technology, coupled with the right business model and a scalable infrastructure can provide an immediate solution . . ."

“Project Better Place will establish a network of charging spots and battery exchange stations to provide ubiquitous access to electricity to power electric vehicles. They will deploy and test this framework over the next 24 months in a variety of launch markets, after which it plans to deploy hundreds of thousands of vehicles annually, across multiple markets.”

So, Mr. Agassi first informs us that “existing technology can provide an immediate solution”. Then, he informs us that he will spend the next two years deploying and testing his “framework”. Two years? Of testing? What happened to immediate?

And then, with the two years of testing completed, Mr. Agassi will “deploy hundreds of thousands of vehicles annually.”

Exactly what vehicles would those be? Who will be building those vehicles 24 months from now? And more importantly, who would the buyers of those vehicles be?

Does Mr. Agassi know that there are precisely zero over-the-road electric vehicles available for immediate delivery in America? Tesla and Phoenix remain on the hopes and dreams list, and their high prices will guarantee short lines at the purchasing counter when (and if) they ever appear.

Hundreds of thousands of road worthy, rationally priced electric vehicles in 2009 or 2010?

Ah, the dreams of youth. Aren’t they grand?

Posted by: Danzig | October 29, 2007 at 11:53 PM

Tom & bigTom,

Don't worry about any issue with replacement/exchange of batteries... at least with the Phoenix Motorcars' SUT.

The NanoSafe batteries from Altair Nanotechnologies will outlast the vehicle itself. Tens of thousands (perhaps hundreds of thousands by now) charge/discharge cycle tests have been run (by them and an independent lab) and the results indicate these batteries are not only as safe as a lump of clay ... but also virtually immortal.

Altair (the battery's maker) owns 16.6% of Phoenix Motorcars, which has a 3-year exclusivity to the NanoSafe (renewable). Phoenix makes extremely conservative claims about the batteries, but if you do the math,
you'd have to drive the car about a million miles worth of charges/discharges before you'd start to see any barely measurable loss in charging capability.

The NanoSafe uses a layer of lithium nano-titanate(?) rather than graphite (used in regular lithium-ion). They generate absolutely no heat during charging (no matter how fast you charge them) and does no expansion/contraction (which makes the lithium-ion grow old fast).

It sounds like the only time you'll want to remove the batteries would be when the body's ready for the junkyard.

Let's just hope the Phoenix Motorcars' initial delivery (planned "early 2008") finally launches OK. They're still battling opposing forces with finances and (ironically) the C.A.R.B. (stalling on what kind of plug-in interface meets their fancy).

See ==> http://phoenixmotorcars.com

Posted by: Jim Dale | October 30, 2007 at 12:37 AM

Most important, I forgot to mention ...

The Phoenix Motorcars SUTs & SUVs (using the NanoSafe batteries I described above) only take 10 minutes to charge!

No battery swapping ... neither to replace the charge nor for any other reason whatsoever.

You'd spend no more time charging up your EV than you currently do filling up your tank.
That's when you're travelling long distance.

For everyday travel (around town) you'd be able to do most of the charging at home (maybe once a week while you sleep). Seldom would you ever have to charge up at a commercial charging station. (We never could fill up our gas-tanks at home.)

Posted by: Jim Dale | October 30, 2007 at 02:17 AM

I'm not holding my breath on Phoenix since it's a company that has shown to be full of dreamy fluff over the years.

With many varieties of lithium cells coming to market fast, (10-20 year life, 10 minute charging) I see no need for any sort of battery exchange.
This is a twenty year old idea, that expired ten years ago.
My prediction: Failure.

Or he's just another in a long line of silver tongued grant suckers.

-Otmar

Posted by: Otmar | October 30, 2007 at 02:29 AM

Jim Dale: The people who populate the Energy Blog have followed Altair/Phoenix with great interest. Your comments here are a nice summary of the press releases from those companies over the past 18 months or so. But, you haven't given us anything new in this post, which reads very much like a commercial. Can you tell us if you are directly connected in some way with Altair/Phoenix? Or are you simply an interested citizen, hoping that the A/P dream will come true (like the rest of us)?

Posted by: Danzig | October 30, 2007 at 12:43 PM

People are missing obvious solutions to these problems.

Rather than stop every 100-200 miles for a battery on a 1000 mile trip; why not have a system where you load your entire car onto a train and sit back and relax for the trip?

It is insane to me that a system like this is not in place. Transporting goods by train is far more efficient and with sufficient scale, cheaper than the gas it would cost you to make the trip... It is sad that the heavily subsidized highway system in America has all but pushed out trains as the major mode a movement for Americans.

Apart from that, electrified roads will be a much better long term solution to this problem. If my car draws energy from the very road Im driving on, I can cut out the 800 pound battery pack, along with the expense and reduced vehicle performance it causes.

Posted by: Nathan | October 30, 2007 at 07:33 PM

Question?

If I have an electric car then when I am stopped or coasting, does the car's motor stop completely with zero energy use or does the system have to idle as a gas engine does now?

Seems to me this alone would reduce energy usage considerably?

Posted by: Angus | October 30, 2007 at 08:07 PM

Nathan,
The cars-on-trains trick has some history in America, but I can promise you that it has no future. Auto-Train, an AmTrak service, has been around for decades. The train has one route: from Sanford, Florida to Lorton, Virginia. I used the service in the early 90's, and again this year. It simply cannot accommodate America's love affair with CONVENIENCE. Two people and their family Chevy can take the ride for $539 (yikes!). The trip takes almost 18 hours, and that does not count the time required to get the cars on and off the train (another hour at each end). Since the number of riders is low, the best part of the service is this: there is very little competition for window seats.

Posted by: Danzig | October 30, 2007 at 08:10 PM

Angus,
Having a Prius (not a true electric) when it is stopped -or coasting the gasoline motor is usually off. The big savings is that a lot of energy is dissipated by the moving parts of a gas motor -even when no power is being drawn from it. For a pure electric, you will still be running a few functions, lights, fans etc., and even when your vehicle is parked and unoccupied there will be a small amount of leakage within the battery. You have probably noticed that many rechargable batteries will lose their charge in perhaps a month or two if they are simply sitting. But these loses are much smaller than those from an idling engine.

Personally I'm not much of a fan of the all electric vehicle. Plug in hybrids would seem to be a more useful solution to me. There may be some niches where all electrics make sense though, after all you avoid the expense of having a liquid fueled engine, as well as an electric.

Posted by: bigTom | October 31, 2007 at 01:01 AM

There is no question, electric cars will outperform gasoline-fueled cars and dominate the market very soon, because nano-tech-based batteries have the capacity and last longer than a typical car life, charging cycles of about 10 minutes achieving a respectable driving range of 250 miles and the owner can refuel the car at home from third party or own energy sources.

Customer needs must be met, calling for independency, respectable driving range, fast refueling time with less refueling cost/mile including sufficient performance. An electric car can accelerate from 0-60mph in less than 5s with 0% direct emission. Besides that, the well-to-wheel emission can’t be achieved from any other technology discussed at present, therefore, electric-powered cars will be setting new benchmarks in the automotive world.

Car makers will be forced to offer their own electric car models, it’s just a matter of time before management recognizes that customer demands are already present and that the overall environmental requirements can’t be met with any gasoline-fueled car in future. Assumably, we will be seeing a big roll-out starting in 2009.

It's hard to believe that exchanging a battery at specific destinations will ever earn the acceptance of customers. Direct-Drive Technology associated with Plug-In & Drive in about 10 minutes will be the future.

All-electric-powered cars will be the hot topic and the driving force of economic growth associated with a cleaner future.

For more information please contact Global Valuable Resources, LLC, advisory services for clean-tech investments, at [email protected]

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Posted by: star trek voyager | April 23, 2009 at 04:16 AM

Great news. It's exciting to see infra-structure being built for electric cars!

Posted by: Sealed Lead Acid Batteries | June 18, 2010 at 11:24 AM