The Electric Car Acid Test

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He felt strongly about the need for a peaceful resolution to Middle East conflicts, and he figured that one way to reduce tensions was to reduce dramatically the world's dependency on oil. He had chosen Project Better Place as the name for his project because of the challenge to the Young Global Leaders a year earlier to try to make the world a better place. He couldn't think of anything more important he wanted to do.

INFRASTRUCTURE HURDLES

By spring, Agassi was refining his business ideas. Those years at SAP gave him a unique perspective on overcoming the hurdles to widespread electric vehicle adoption. He saw that the vehicles needed an infrastructure comparable to NetWeaver to make them viable. On a 10-hour flight from Tel Aviv to New York, he laid out the core business model for Better Place.

During the summer, he concentrated on raising money. His big break came during a meeting with Israel Corp.'s Ofer last June. Agassi was in Israel to raise money from the country's leading industrial families. One of Agassi's allies, investor Michael Granoff of Maniv Investments, a New York company that concentrates on alternative energy investing, arranged a meeting on June 12 in Ofer's office on the 23rd floor of the Millennium office tower—with a panoramic view of the coast. Agassi laid out the economic rationale for electric vehicles and explained his business plan. As he wrapped up, Ofer quipped to one of his colleagues: "I guess we'll have to sell the refineries."

Agassi couldn't guess where the conversation would go next. He had to rush to a meeting with Peres, but Ofer accompanied him down to the lobby. As they said their goodbyes, Ofer leaned forward and delivered some stunning news: "I'm going to invest in this, and I'm going to be your biggest investor. I'll put in $100 million." A flabbergasted Agassi didn't know how real the pledge was, but when the initial round of $200 million in funding for Better Place came together last October, Ofer kept his word. Agassi lined up a wide range of other investors, including investment bank Morgan Stanley (MS).

In December, Agassi saw his dream come one step closer to reality. With his backers in place and the company's launch scheduled, he took a test drive in a Renault that his employees had converted to run on electricity. The modified Renault Mégane is capable of going from zero to 60 in eight seconds and has a top speed of 130. Agassi and his beaming father, Reuven, tooled around a Tel Aviv suburb for half an hour.

Better Place now has talks under way with about a dozen other countries. Agassi hopes to pilot the project in a few countries this year and begin mass deployments in 2011. He's optimistic that he'll be able to defy the odds, but he's also realistic enough to know there are many difficult days ahead. "There will be a very loud splat when I hit the ground," he says, "or there's going to be a revolution."

Hamm is a senior writer for BusinessWeek in New York.