When I was growing up in the 1960s, like many of my pseudo-hippie peers, I had a
typically utopian vision of how the future would play out. There would be world
peace, of course. We’d be able to instantaneously zip from one location to
another by stepping into street corner teleportation devices that would take the
place of the then-ubiquitous telephone booth. And we would all drive 100 percent
electric cars, transforming our inner city air into a pleasing wash of
Well, world peace seems farther away than ever.
Scientists in Australia have been able to “teleport” a tiny beam of light. But
electric cars have indeed arrived. They have funky names like Tesla, Leaf and
Volt. But a whole host of factors have clouded the electric dream, most
importantly what’s known as “range anxiety” (that’s the fear that if you go past
your car’s charge limit, you could wind up stranded on a dark road in the middle
of a bad neighborhood).
In 2005, Israeli entrepreneur Shai Agassi has his
own vision for a zero emission future: he’d address the range anxiety roadblock
by creating an electric car with a switchable battery. His solution was to sell
not just the car, and not just the battery, but to build a country-wide
infrastructure of battery “swap stations.” This would enable the driver to
travel beyond the car’s 140-kilometer limit by pulling into a station and,
within five minutes, driving off with a brand new, fully-charged battery – all
handled robotically with no need to even get out of the car (think of it as
driving through an “electric carwash”).
Agassi established his company,
Better Place, raised over $750 million, and began building the infrastructure in
three countries: Israel, Denmark and Australia. Agassi got his biggest boost,
perhaps, when Better Place was featured in the first chapter of Saul Singer’s
best-selling book Start-Up Nation. That’s when I first learned about the
company. I knew right away I had to have one.
Once it became possible to
drive the length of the country, from Metulla to Eilat, all by swapping
batteries, Better Place began selling their first vehicles in
Israel. That was in July. At the end of the summer, dropped in to Better Place’s shiny visitor center in Herzliya, which offers free tours in
Hebrew and English – not really planning to make a purchase, just to try it out.
A week later, we were signing paperwork and taking out a bank
Better Place sells only one model so far, in two versions: regular
and deluxe. Some might see that as genius (when Steve Jobs returned to Apple, he
cut a bloated consumer product line down to just a desktop and a laptop, in
basic and advanced versions) while others might argue that the lack of choice is
an unfortunate marketing flaw.
We didn’t care: Better Place’s Renault
Fluence is equivalent in price to an ordinary four-door sedan in Israel (NIS
121,000-NIS 128,000) and sports a number of more luxurious touches (the speaker
phone automatically pairs with your cell phone via Bluetooth; there are built-in
sun shades in the back seats). There’s an almost toogood- to-be-true financing
deal with Bank Igud for a loan at only 2.75% interest.
Before we could
finalize the purchase, though, Better Place had to send a technician to our
home; you can only buy a Better Place car if you have your own dedicated parking
place so they can install a home charging point. Most of the charging is done
overnight (it takes 6-7 hours to entirely top off the “tank”) rather than by
swapping. The charging spot even has its own cellular connection to
communicate with Better Place headquarters.
Once we’d passed that hurdle,
all we had to do was wait for our car. And then all hell broke loose.
In a move that took everyone outside Better Place’s board of directors by surprise,
founder Agassi, the public face and irrepressible company cheerleader, was
ousted as chairman. A week later, he quit the board entirely. Suddenly the
entire Israeli press started to dump on Better Place, dishing out more than
generous helpings of vitriol on the company and its business model.
enough people had bought cars (only 350 people in the entire country when we
made our purchase, according to the press), a rate that would put it far below
the 4,000 Better Place predicted in its first 12 months. The company had “lost”
close to $500 million. (That wasn’t fair: it costs a lot to build up
infrastructure, so it’s not really lost, now is it?)
The company had only two
months of cash left, the press lamented. Half the staff would be laid off (this
one has turned out to be true). A plea for additional financing had fallen on
Moreover, as one article put it, the business model was
unsound from the beginning. Each car needs the equivalent of three batteries –
one in the car, one ready at the swap station and one charging up. At $20,000
each, that’s a $60,000 battery investment per vehicle. And the whole concept of
swap stations was akin to a national network of tire repair shops, another
writer commented. When you get a puncture in your tire, you repair it;
ditto with the battery, so to speak.
The model was 19th century, not
forward-looking. As soon as battery length increased, Better Place would
be as antiquated as the horse and buggy.
I’d like to say I stayed strong.
Nothing had changed: the business model and financial condition of the company
were known before Agassi’s ouster. Indeed, change can be good. If Agassi was a
visionary, the new CEO was a salesperson who had cut promising deals in
Australia. Isn’t that what the company needed right now?
It didn’t matter. I
panicked. I called Assaf, our sales rep: What would it cost me to cancel? Assaf
tried to assure me it was business as usual at Better Place. He was getting new orders every day. Deals with Israeli
corporations were in the works, as were new leasing arrangements. “We’re not
going anywhere,” he purred.
I knew he was right. It would be foolish for
investors to put so much money in, then get spooked and shut the entire
operation down just a couple of months after it actually started selling cars. I
spent a sleepless weekend, made countless pro and con lists, talked off the ear
of every friend who would listen. We decided to stay the course. If we backed
out, the company would definitely crash and burn.
Being an early adopter
has its perks – when we walked into Better Place’s showroom the next day to pick
up our car, the entire staff stood up and applauded. There was a big
screen reading “Mazel Tov” with our names on it. And the cookies and juice
weren’t bad either.
The electric Renault Fluence is as much a computer as
a vehicle, which necessitated a nearly two-hour training session. The
centerpiece is called OSCAR (Operating System for Cars), which controls
everything from the entertainment system to the GPS navigation and location of
the next battery swap station.
The latter is particularly important: If
you input your route (and you’re strongly advised to), OSCAR will calculate how
long your battery will last and if and when you’ll need to stop to get a fresh
one. For example, if you enter a trip from Jerusalem to Karmiel, then to
Tiberias and back home again, OSCAR will automatically insert the closest swap
stops at various points during the trip and even modify your route to make sure
there’s a station along the way. It’s really quite ingenious.
“learns” your driving behaviors, too, to adjust when it thinks you’ll need to
swap. Speed demons will drain the battery faster, as will climbing hills, while
going down recharges the battery. There’s cruise control (steady driving
improves battery life) and a speed limiter. Every driver gets his or her own
“log in” so that OSCAR will know the difference between my driving habits and my
After training, photos and more cookies, we headed back to
Jerusalem from Better Place with 97 percent battery left. OSCAR told us
which way to go, and if we followed his instructions, we’d arrive home with 29%
battery left. A nice, comfortable journey.
Except that we didn’t follow
OSCAR’s instructions exactly. First we took a slight detour to visit a sporting
goods store nearby. Then, although OSCAR wanted us to drive home via Ayalon, I
knew from experience that going via Highway 6 would be faster. Same with the
entrance to Jerusalem; I always take Highway 9 and loop around the Begin
Highway, while OSCAR insisted on going through the traffic-thick main entrance
All good decisions as far as travel time goes. But each option
added a few kilometers. And I didn’t always stick to 100 kilometers per
hour. Plus, there’s a really big hill coming into Jerusalem, which OSCAR
apparently hadn’t “learned” yet. Our percent of battery remaining was
dropping faster than we expected. And the swap station in Jerusalem wasn’t open
yet (since that first ride, a station at the Hemed interchange has gone
As we were rounding Har Hotzvim, already in the city limits,
OSCAR started beeping frantically. Red warning lights splashed across his
digital face. We had just passed the 10% threshold. And, according to OSCAR, we
didn’t have enough juice to make it home.
And then the phone rang. It was
Better Place Customer Service. They had received an alert that we were getting
too low on power. Where were we, the Better Place representative asked?
began relaying instructions. “Drive slower. And watch the charge
indicator.” If I kept it slow and steady, the car would recharge ever so
slightly and we might just make it.
“Would you like us to monitor you on
the rest of your ride home,” the Better Place lady asked? Yes please!
10 minutes were far more nerve-wracking than I’d expected on our first day out.
The battery monitor continued to drop. Four percent, 3%, 1%, and then
The “battery empty” icon flashed, just like it would on your laptop.
Except this was a very heavy laptop. We were opposite the gas station at Oranim
Junction, no more than a minute from our apartment. How ironic if we were
to run out of energy directly opposite a gas station which would do us no
Our hearts were racing. But OSCAR nudged us a bit further and we
made it into our parking spot, plugged in the charging cable and finally
The truth is, Better Place’s rep had told us that, even on
empty, the car can usually drive another seven kilometers. But that didn’t
particularly calm us. Red flashing lights will do that.
customer service was uniformly excellent. They “know” me already (“the nervous
guy?”) and address me by my first name, in English, when I call. I asked Ophir
about this; she told me that our language preferences are recorded in the
computer, but at this point, with so few drivers on the road, everyone in the
service center (six or seven people in the morning, two or three at night) knows
who I am.
Still, there is something eerie about the fact that Big
Brother/Better Place is tracking you. You can turn it off in OSCAR’s
preferences, but I found it rather comforting to know that you have a caring
partner watching out for you. Our biggest take-away so far: listen to OSCAR when
he tells you which way to go. Big Brother sometimes does know best.
been a couple of weeks since our first-day “experience,” and the car has been a
joy. It’s unbelievably quiet – the only indication you have that it’s even on is
a lit green icon reading “Go.” It’s roomy and you can adjust the seat to sit
high up, not quite as high as in an SUV, but better than the average sedan. Our
range prediction is steadily increasing, although with that hill, we’re still
only getting 115 kilometers to the charge on the way back from Tel
But most of all, we have become “brand ambassadors.” I can’t tell
you how many times I have caught heads turning as they pass by the words “100%
electric” written large across the side of the vehicle, or the frequency at
which strangers on the street stop to ask questions. When we took the car with
our used bottles and cans to the recycling center in Givat Shaul, I spent more
time fielding queries from the workers than stuffing the bins. I have become a
walking, talking Better Place FAQ.
But that’s OK. I truly want Better
Place to succeed, and not just to protect my own investment. I believe in
Agassi’s vision of a world without dependence on petrol and the nations that
sell it (whose interests are not always aligned with
Ultimately, I feel a bit like the biblical Nachshon ben
Aminadav, who was the first to stick his toes into the Red Sea, precipitating
the final stage of the Exodus from Egypt. An exodus from oil? Let the waters
part and the electric cars drive through.Why people aren't buying
As much as the Better Place solution seems to make sense, it has not yet caught
on with consumers. There are a number of reasons.
The first is cost: it
isn’t cheaper to drive an all-electric vehicle – yet.
Here’s why: Better
Place treats your car like a cell phone. Instead of paying for each swap, you
are billed a monthly amount which covers your “fillups” whether at a charging
spot at your home or work or at a switching station.
Better Place charges
a per-kilometer fee with a monthly minimum. There are two plans: a pay-as-you- go
option of 65 agorot per kilometer and a pre-pay package that brings the price
down to 55 agorot per kilometer but locks up your savings for a minimum of three
years. (You could probably make more by investing that money in the stock
market.) The pay-as-you-go option has a monthly minimum of 1,000 kilometers.
We’re not big drivers so we chose that one for NIS 650 a month. But the gas bill
on our old Toyota Corolla was only an average of NIS 575 a month, so ostensibly
we are losing money every month compared with what we spent on a serious
gas-guzzler. Hybrids like the Toyota Prius would be even cheaper to run
(although considerably more expensive to buy).
Better Place tries to
soothe those concerns by pointing out that maintenance costs are much lower;
there’s no need for a lube or oil change since there’s no lube or oil. The
company estimates a NIS 500 checkup once a year will do the job. And of course –
and this is the company’s biggest trump card – as the price of gas goes up (and
it inevitably will) – the savings increase. Plus, since you don’t actually own
the battery, you automatically receive any improvements to the technology.
Better Place says range will increase by seven percent to 10% a
Beyond price, there is also inconvenience. To drive from the center
of Israel (Tel Aviv or Jerusalem) to its northern and southern fringes – Eilat
or Metulla – will require two to three swaps along the way, each taking four to
five minutes plus the extra time to pull off the road and drive to the station.
Better Place hasn’t been able to secure the best real estate; some of their
locations are pretty far away from the highway. Plan on 15 minutes per swap, and
that’s if there is no line of other cars.
The system also requires a
larger degree of pre-planning; if you’ve driven near your limit for the day and
are home and then decide spontaneously that you want to go out at night before
your charge is complete, you may not have enough battery left to do it. So, if
you’re not saving money – at least not yet – it becomes a harder sell to go
You have to be really committed to the environment to put up
with hassle. But this should be put into perspective: Better Place estimates
that 85% of drivers travel no more than 35 kilometers a day. So for most people,
this will only occasionally be an issue.
There are also those who
complain that electric cars are on balance no better for the planet; that the
electricity is generated, in Israel at least, almost entirely from burning toxic
fossil fuels like coal. True, but electricity also has the future potential to
increasingly be generated by renewable energy sources. The same can’t be said of
Finally, there’s the uncertainty factor. Will
Better Place be around in another five years? The company has announced plans to
lay off 150 to 200 of its 400-person Israeli staff. That doesn’t bode
What happens if the company goes out of business? Does Better Place
repossess your battery, leaving you with a large, unusable brick in your garage?
Even if you do get to keep the car and charge it at home on your own, you won’t
be able to travel far outside of town without the swap stations.
such a vehicle have any resale value? It all comes down to getting more cars on
the road and increasing consumer confidence. Better Place recently cut a leasing
deal with Albar in Israel: for NIS 2,000 per month, you get the car (not
including insurance, which you have to provide privately) and 1,000 kilometers a
month. While leasing is never as good a deal as buying, it will probably go a
long way toward assuaging customer fears, as will the growing number of
corporate leasing deals the company has been announcing.
To wit, at the
height of the bad news about Better Place’s financial woes, a “buying group”
emerged on Facebook to negotiate a deal for leased vehicles. Twenty people have
already said they want in.
Still, if worse comes to worse, maybe the
Better Place cars will become collectors’ items. You know, like a Delorean.
Which could be really cool, ’cause those things can travel back to the future!