Better Place
For Shai Agassi, the CEO of Better Place, a dream came true in April. “This is a monumental milestone,” he enthused, as next to him, at a launch event in the very centre of Tokyo, the first commercial battery exchange station for electric vehicles (EVs) recharged a taxi in just under a minute. He sees the world entering a new era of mobility, in which cars don’t burn oil, and his company leading the way. After a 90- day trial in Tokyo he hopes for a global roll out for his project, which promises to solve the biggest problems of EVs: restricted range and long charging.
Agassi had good reasons for choosing Tokyo. At the moment, Japan is the world’s leading EV market, especially if you include hybrids like Toyota’s Prius that can also run on batteries. Mitsubishi Motors is already selling its EV i Miev, and Nissan launches its Leaf at the end of this year. Even Toyota has announced plans to mass-produce EVs. The Japanese government is also very supportive, having financed this battery station.
Japan’s huge taxi fleets make it a promising market, and Agassi eyes them as a natural target. Tokyo alone has 60,000 taxis, more than London, Paris and New York combined. A switch to EVs would not only provide the necessary economies of scale to reduce EV costs, but also huge environmental benefits, because taxis emit 20% of Tokyo transport’s CO2. “With their high mileage and visibility, they can serve as a catalyst for this technology to transfer to the mass market,” said Kiyotaka Fujii, president of Better Place Japan.
Also present at the April launch was Ichiro Kawanabe, CEO of Nihon Kotsu, Tokyo’s largest taxi operator. The former McKinsey consultant brought three Nissan-made taxis to the test. Eventually, he hopes to replace his entire fleet of 3,000 cars with EVs as a contribution to a sustainable society. “I am a third-generation taxi driver, and I want to work in this industry for at least another 30 to 40 years,” he said. Better Place’s battery exchange system promises to reduce EV downtime and increase the economic feasibility of electric taxis.
Agassi is convinced of success. “This step today is proof that we are able to build a network of electric cars that can go and go,” he said, in answer to skeptics who warned that the battery exchange would never work.
Yet, some critics say that, while the cars may not burn petrol, they risk burning money. Better Place is a big gamble and may yet end up one of innumerable stalled projects that line the long road of technological progress. The company has not seen a penny in operating revenue since its founding in 2007. Better Place has worked to build battery charging and exchange stations first, surviving on the goodwill of investors willing to buy into Agassi’s dream.
Agassi has certainly had no shortage of success finding investors. His main backer, and now chairman of Better Place, is Idan Ofer, chairman of Israel’s largest holding company, Israel Corp. Israel and Denmark have already entrusted Better Place to set up EV infrastructure from 2011; negotiations with other countries and cities are ongoing.
In addition, the Nissan-Renault alliance has promised to build 50,000 EVs with exchangeable batteries for Israel and Denmark. In April, even the Chinese carmaker Chery agreed to collaborate with Better Place; Chery’s home market is one of the most promising for EVs. And the money keeps on pouring in.
In January a consortium of investors lead by HSBC pumped $350m of equity into the company, with the bank taking 10% of company shares. “We are confident that Better Place has the technical and commercial solutions to allow for the mass adoption of electric cars in the near term,” says Kevin Adeson, head of global capital financing at HSBC.