May 31, 2013 – Vol.18 No.11

THE DEMISE OF BETTER PLACE.
The company fails, not the car or the concept.

by Bruce Mulliken, Green Energy News

For pure electric cars to replace petroleum cars on a wide scale – as the only car in the driveway – they have to offer a similar experience at a similar price.

Electric cars need to travel hundreds of miles not less than a hundred. They have to have the ability to be refueled, reenergized, in minutes not hours. Reenergizing stations need to be everywhere, not here and there. Buyers need a wide choice in vehicle types, not a handful of options. And, for the size and type of vehicle, the sticker price – without tax credit – needs to be nearly equal to its petrol-fueled counterpart.

In other words, the electric vehicle industry needs to build its products, and its future, around the current petro-fueled mobility lifestyle, not try to convince drivers to adapt to a totally new way of getting around. The shift from horse and buggy to horseless carriage was rapid because the new technology was so much better than the old. In their current state, electric vehicle developers are asking people to step backward. True, some will buy (or smartly lease) an electric vehicle and put up with its limitations as a personal effort to save the planet or in revolt against petroleum. Others will buy them as an additional, around-town runabout. But the great automotive masses will stick, mostly, to conventional cars and perhaps hybrids and plug-in hybrids as an in-between solution.

Electric vehicle infrastructure developer Better Place, of Israel, has filed for bankruptcy protection there and plans to liquidate.

To its credit, Better Place tried to mimic the conventional automotive world by offering quick reenergizing through battery swapping, while keeping in place the ability to recharge vehicles from the electric grid at home or on the road.

Unfortunately, parts of its business model fell apart. Better Place only offered only one vehicle that had battery swapping abilities, a Renault Fluence Z.E., and it had to be purchased. The car came without the necessary battery: It had to leased, paid for monthly in a rate structure based on the duration of the contract and the number of miles driven. (This business model came from the cell phone industry. Substitute miles for minutes and you'll get the picture.) The leasing contract came with use of the battery swapping stations limited only by the number of miles allowed in the lease.

The downfall of Better Place seems not related the swapping concept, but to the stations themselves. These are not power-grid-connected, electronic-filled, pedestals bolted to the curb in a parking lot, as are most electric vehicle charging stations. Better Place had to construct entire structures in which to house the swapping equipment (not cheap either), as well as keep a supply of lithium-ion battery packs on hand in case any Better Place customer dropped by for a quick, one minute swap. At an estimated $500,000 each per swap station, Better Place quickly ran out of cash as sales and required battery leases failed to meet expectations. The company sold about 900 cars in Israel and another 400 in Denmark.

The Renault Z.E., itself is still sold in other markets. In those markets, such as the UK, France and other Euro nations, Renault leases the battery similar to the Better Place program but for far less money. Reflecting the cost and use of the swapping stations, Better Place monthly lease rates in Israel ranged from about $300 a month to $450. In the UK, for instance, rates range from about $100 a month to $200.

In Israel the car sold for about $35000 (without battery). In the UK the car sells for about $33,000 before government incentive and before the battery.

Still, despite the loss of Better Place, battery swapping is probably the way to go for petro-like reenergizing and driving without range anxiety. The most closely watched electric vehicle developer on the planet, Tesla Motors is apparently considering this option, but is mum on details. Its highly praised Model S is already swap capable. Tesla has also announced plans to add across-the-nation Supercharger stations, eventually, for LA to NY driving and has reduced charging time to 25 minutes. Solar power and energy storage will be installed at stations as well as after dark solar charging with on-site energy storage. It seems feasible that once Tesla has secured real estate with the Supercharger stations, the company could also add battery swapping to the reenergizing menu.

Tesla's Superchargers only work on Tesla cars and Tesla owners use them for free. This business model isn't exactly helping the build out the nation fleet of electric vehicles other than Teslas.

A switch to battery swapping would not be easy and would require a major shift in the current direction of electric vehicle development and deployment. To make battery swapping the norm, battery swap technology would have to be compatible for all swap-capable vehicles and standardized battery packs would have to developed to eliminate the need to stock many different types of battery packs at each swapping station. (Standardized battery packs have an additional bonus: To make eventual recycling automated, and thus easier.)

Other enhancements to the swapping model would be swapping technology that could be easily deployed. (Think something like a shipping container.) And business partners should be sought for battery swapping. For example offer battery swapping franchises to traditional gasoline filling station operators.

Aside from reenergizing in less than a minute, battery swapping adds significant advantages over rechargeable cars. For one, it economically separates vehicle from battery. Buyers of new electric vehicles take the risk of heavy depreciation at trade in time because of the aging battery. Buyers of used electric vehicles take the risk of having to replace a tired and expensive battery pack which holds down resale value. A swap-capable electric vehicle, with the battery economically separate from the car, would hold its value longer and be very appealing for the used vehicle buyer. Cars with swappable batteries could always have a fresh, state of the art battery.

(The expected depreciation of leased electric vehicles is already built into the monthly payment. Still, leased cars will eventually enter the used car market potentially making them a risky proposition.)

Battery swapping also opens the doors for the introduction of new battery types that should offer greater range and lower cost, specifically metal-air batteries (zinc or aluminum) that can be mechanically recharged while outside the vehicle.

 

Related.

Aluminum, Not Lithium. Swap, Don't Recharge.

Swap or Recharge: Which Makes Better Battery Business.

 

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