Making the world a Better Place

GELLERMAN: It’s Living on Earth, I’m Bruce Gellerman.

Entrepreneur Shai Agassi says he has a better idea….better than Ford, GM, or Toyota for that matter, and he’s not shy about his ambitions. He wants to clean up the world and make it a better place. Agassi plans to do it one electric car at a time, and Better Place just happens to be the name of his new company which he promises will make us rethink how we drive. Israel and Denmark were the first countries to sign up for the Better Place plan. Now Australia is on board, too.

Wired Magazine Senior Writer Daniel Roth has written about Better Place and its founder Shai Agassi.

ROTH: Shai figured out a new business model. You don’t usually hear about business models as being things that change the world, but he thought of a business model that would ? he thinks ? get us off oil. Thinking about cars like, as if they are cell phones. The way this would work is, basically, you would get your car through Shai’s company. He doesn’t make the cars. He only works with the car companies to make sure that they have cars that work on his standards. He buys the batteries and then you buy an electric car from him. You buy a plan. You get a certain number of miles per month that you can drive or you get an unlimited plan ? it’s just like buying a cell phone. And he owns the battery. He swaps it out when it goes bad. He’s setting up battery exchange stations. You drive your car up, and in under five minutes the battery drops out from beneath the car and a new one pops up. And you don’t really care what battery you’re getting. You can get any old battery because you don’t own it. As long as it works, is all that matters to you.

GELLERMAN: So they key to his plan is actually setting up these fill-up stations – or battery drop-in stations.

ROTH: Well, yes ? it’s two parts. One is the battery exchange stations. The other is charging spots. He thinks that he needs ? at least in Israel ? he says he needs one charging spot for every six parking spots in the country. That’s how he has decided that you’ll feel like you have ubiquitous charging. And he’s making sure that these cars have a PC inside of them to figure out where the closest charging spots are, when you need to get charged, whether you can make it or not. It will schedule you times to go get your batteries dropped out. As you’re driving into a parking spot it will tell you where the closest charging station is and whether it’s full or whether there’s a car there now or whether you can go plug in there. The idea is to make it not only as easy as possible to recharge a car, but sort of fun. You’ll drive and you’ll have on your dashboard a bubble around your car showing how much energy you’ve got, how far you can get, and how far you can press the limit. Then he’s thinking, down the road maybe a company puts up a charging spot and starts giving discounts – Charge a car, you go shopping at a Safeway and you get some discounts on things. It’s an incentive to charge at their store rather than charging at the neighbor’s store.

GELLERMAN: Well what about the costs. I mean, how much is it going to cost for the car? How much will it cost for the electricity?

ROTH: Shai is saying that the cost of this will be less than the cost you pay for gas each month. Deutsche Bank did a study of looking at whether what Shai was saying was true, and they came to the conclusion that yes, as a matter of fact, it will be cheaper to buy electrons basically instead of buy gas each month. As for the price of cars, Shai’s saying ? and this one I think is going to be a little bit tougher to actually pull off ? he in some cases will be able to give the cars away for free, that he’ll be making enough money on the monthly bills, what you pay each month for your car for the miles to him, that he’ll be able to just give away the car. We’ll see if he actually can do that. But even if he offers it as a subsidy that’s a pretty good deal.

GELLERMAN: It’s very clever.

ROTH: It’s very clever. It’s a really interesting idea. And you start – Shai is a – his secret is that he is so persuasive, and what he says makes sense, that when you hear it you start thinking, “Well, of course, this is how cars should be sold and this is how we’re going to drive electric cars. And why aren’t we doing this today? It doesn’t make any sense.”

GELLERMAN: Yeah, he talks a good deal. He talked investors into putting $200 million worth into his company.

ROTH: $200 million into a company that had nothing. It had no car company committed to it, it didn’t have any countries committed to this, and Shai basically said here’s how it’s going to work.

GELLERMAN: Who’s to say that the electricity used to power these cars is going to come from a clean source?

ROTH: That’s a big part of this that hasn’t been figured out yet. You need the utilities to commit to something like this. There is no one to say that he won’t just be getting electricity that comes through burning coal and is bad for the environment. But he basically says, “Look, I’m willing to pay a premium for the energy I’m buying from the energy companies as long as you can convince the energy company that you’re going to be putting the exact same number of clean electrons back onto the grid that I’m buying from you.”

GELLERMAN: Well, they don’t have the batteries, they don’t have the cars. It sounds a little bit pie in the sky.

ROTH: If something doesn’t work, this whole thing could fall apart, I suppose. But there are enough people that are betting on this, and that have a vested interested in making this happen, that it’s less pie in the sky and more risky business. You know, this is not just a start up ? it’s a start up that’s taking on big oil and big auto. And it’s not going to be easy no matter what happens. But there’s money, there are engineers working on this. There’s one of the largest car companies in the world that’s committed to making these cars. Something’s going to happen here. Will it be as big and as grand as Shai thinks it will? I don’t know. We’ll have to wait and see.

GELLERMAN: Well, Daniel, thank you very much for sharing your story about Shai Agassi and his company, Better Place.

ROTH: Thank you for having me.

GELLERMAN: Daniel Roth is Senior Writer for Wired Magazine.