Supplying the Brains for Electric Cars

A communication system from startup Better Place lets drivers know how far their batteries will take them and where to find a fresh charge

By Steve Hamm

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Shai Agassi and his Better Place startup may have a long way to go before realizing their vision of a future where electric vehicles are in vogue. But they came a step closer on Sept. 15 at the high-profile Frankfurt Auto Show when they demonstrated a system for managing data communications between vehicles, battery switching stations, and electric utilities. "This is a key piece" of making mass adoption of electric vehicles feasible, says analyst Thilo Kowslowski of tech market researcher Gartner Group (IT). "You need real-time communications between the vehicle, the charging infrastructure, and the electric grid."

Tapping knowhow from Intel (INTC), Microsoft (MSFT), and other tech stalwarts, the system makes it possible for drivers of electric vehicles to know how far they can drive on a battery charge and where they can find the nearest battery switching or charging station. It also tracks vehicles and drivers' habits so Better Place can manage battery inventories at switching stations efficiently. And it makes it possible for Better Place to manage the battery charging process to avoid troublesome electricity demand spikes.

Several major challenges remain for Better Place. It needs to win over major automakers in addition to the Renault-Nissan alliance that it has already signed. And it also needs to raise billions of dollars to pay for the batteries, which it will own, at $12,000 each, and to pay for the installation of battery switching stations, at an estimated $500,000 each.

Worth the Investment?

Setting up those stations will be no mean feat. It could cost as much as $200 billion to pay for the battery switching and charging infrastructure for the entire U.S., says Mark Duvall, an analyst at the Electric Power Research Institute (EPRI), a nonprofit think tank. "It's not clear that the level of interest in pure electric vehicles, as opposed to plug-in hybrids, will support the massive investment," he says.

Better Place has addressed issues raised by skeptics before. The Palo Alto (Calif.) company has already announced plans for widespread adoption of its system with the cooperation of governments in Israel and Denmark. A demonstration conducted in Japan in May showed that Better Place's battery-switching station technology could replace a spent battery with a fully charged one in a mere 40 seconds, far less time than it typically takes to refuel a conventional auto.

Agassi, a former software industry wunderkind with Germany's SAP (SAP), has a goal of providing the communications and physical infrastructure to enable countries and metropolitan areas to rapidly convert to using electric vehicles and shake off their dependency on oil.

In his unabashedly confident style, Agassi predicts that, years from now, when electric vehicle transportation is the norm, the Frankfurt announcement will be recalled as a turning point in automotive history. "This will be remembered as the equivalent to the introduction of the Ford Model T," he says. With its affordability and convenience, Ford's (F) Model T turned automobiles into a mass market and established the gasoline engine as their means of locomotion. Agassi says his technology will be ready to be installed in cars in time for the planned late-2010 test of the complete transportation system in Israel. He hopes to have the system running for consumers in 2011.

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