Better Place

As you say, Dave, it's all a way of offering credit. Except that with discounted cell phones tied to a service contract, the interest rate is hidden. And as you say, Americans are addicted to the credit tit big time.

I have never borrowed money. I see credit as a big time rip-off. Therefore I take a dim view of discounted consumer goods tied to service contracts where you pay for the device (cell phone, laptop, or car) though fees concealed in the contract price.

If I offered to give you a new 2010 Prius for $500 on condition that you buy "miles" from me on a contract where you pay $1 per mile for 500 miles per month (whether you use them or not) for ten years, would you jump in and say, "WOW! A Prius for $500!!!" ??? Of course not. You'd say, "I can borrow money from the bank to pay for the car at retail and pay less."

Some folks think that Shai Agassi is a philanthropist who just wants to make the world a better place (after all, he's named his company "Better Place") and who is going to basically give free credit on the batteries because he's such a nice guy. I think that's wishful thinking.

Building an EV infrastructure is a great goal. Financing the battery cost through a service contract is a credit scheme where they can charge as much interest as they like because it's not called interest, it's all rolled up and concealed in the service contract.

As for Verizon's laptop scheme, it does not interest me, because I don't access the internet that way.

 

Better Place: Solution in search of a problem

Right now, the problem with EVs is there are none available that can operate at highway speeds for under $100k. I would rather BP spent its billions of investment money on solving this problem.

BP is building a very expensive infrastructure to solve a problem that does not exist now and might not exist at all in 5-10 years. The battery swap business model would be obsolete with either better storage (batteries or ultracapacitors) or fast charging.

Their subscription charging business might work in a couple of the small markets that they are entering that can be defined as transportation islands (Hawaii, Israel and Denmark). Large population in a small contained area MIGHT work. These three examples have the potential for strong government incentives to move EV demand. I also see BP as great cheerleaders in moving EVs forward.

Will the BP business plan work in the USA? NO!

They will be adding no value to the early adopters who typically, 1) will have access to night time charging, 2) will have a commute within the EV range, 3) will own more than one car (Second car = perfect range extender), 4) will be able to spend $25k on a vehicle.
5) buying to be energy independent, unlikely to sign up or "subscription' service 6) are not afraid of new technology.

This buyer profile will buy a large percentage of the EVs produced for the next 3-5 years until EVs become mainstream. BP could possible add some value to the second tier buyers mainly by reducing upfront costs (and increasing long term costs).

The current administration's goal is to have 1,000,000 Evs in the US by 2015. If 1/3 of these subscribed to BP and had battery swap capability, that would mean approximately 5-6,000 subscribers in Colorado. What kind of infrastructure can you build to service 6,000 cars? Would you invest in a service station on an expensive piece of real estate if you knew only one in 500 cars that drove by could use your service and they probably had a full battery from cheap overnight charging? Even with the totally unrealistic assumption of 5 million EVs and 50% are BP subscribers, only 1 out of every 66 cars that drove by could use your service!

One opportunity for a battery swap model that I have not heard mentioned is taxis in metro areas. Imagine if every cab in NYC was an EV, the reduction in curbside noise and pollution would be significant. The whole taxi fleet for NYC could probably be serviced with 5-10 swap stations. It would be easy to standardize a cab fleet owned by a handful of companies and the companies would save on maintence.

Could BP hurt the move to EVs? Possible.

If BP went out of business there would be a lot of subscribers without charging opportunities, their batteries would now be owned by Wall Street investors who could raise rates or reposses. Biggest concern would be that the biggest corporation in the EV world would NOT want battery improvements. A 500 mile battery or a 2 minute quick charge would put them out of business. When Evs become a significant percentage of cars on the road, it will be necessary to move to time of day metering which will also hurt their business.

 

You don't know what you're talking about. Once you've learned something about BP, respond to your own post and correct your mistaken notions.

 

I remember the Iridium satellite phone system being a very good business plan when it was hatched. However, the changes in technology made it a failure by the time it was fielded.

Better Place is in exactly the same situation. It only takes some more advances in the next few years to potentially make it a failure. Will those advances occur? Glad it's not my money.

 

Says the gentleman whose argument is that he "imagines" that BP will make sure everything is all smiley-face for the customer.

Oh, come on now, Dave. You know better than that. Apple made a business decision to build only high-end machines. If you buy a PC of Apple quality and with similar specs, you will pay about the same. You can get a computer at half the cost of an Apple, but you'll get half the computer, in terms of specs and quality. I had PCs before my iMac, and since I shopped for quality rather than price, I paid about the same.

Apple is a "niche" market because the Microsoft marketing department has convinced big business to run Windows. Too bad Microsoft's software department doesn't have half the brains of its marketing department!

 

I tossed it out there to open discussion, but as the leading cheerleader
for BP, I guess you are not open to any discussion of why it might not work. Any particular point that you believe I am mistaken about, or do we just have a different opinion of whether it is feasible?

And believe me, I hope it does work because that would mean we would have 5 to 10 times more EVs over the next 5 years than anyone is projecting.

 

Sorry not enough sleep last night. No energy to be helpful - snarky side got the better of me. Maybe later....

 

In his own words..

The Times - Power to save the planet

 

Better Place: Shai Agassi on Gavin Newsom’s Radio Show : Gas 2.0

A good interview. Relates installation progress in Israel and economics of electricity vs gas, now and in the future.

 

Some details on aspects of the "solution"

Solution

 

Isn't it the same "value-equation" given every time the Prius hybrid-cost comes to front?

For a lot of non-Prius users there isn't any reason to pay for it, since a "Corolla can perform equally".

But Prius users know better (and Mac users, for the same).

Edit: sorry to remain off-topic. Sensitive theme

 

Thanks for the video, Evan. That's pretty slick. Of course, nobody doubted they could build a switching machine. The questions are (among others): Can they raise enough money to put in enough stations; can they build the system cheaply enough that people can afford to use it; will the public accept a system where someone else owns the battery of their car; etc. Those are where the controversy is.