The motor industry gets a wake up call

Every once in a while a company comes along that utterly changes a market or invents a completely new one.

Edison and the light bulb.

Jobs and Apple is on track for being one such company. With the original Mac, it introduced the graphical user interface (GUY, with the iMac, it brought design and colour into the PC market; with the iPod, it reshaped the music industry, and with the iPhone its apps it is redefining the smartphone business.

Shai Agassi and Better Place have the potential to do for the car market and transport what Edison did for light in our lives and Apple did for computing.

Just on a massively grander scale.

Like Apple, Better Place put itself in the shoes of the customer. Agassi asked one simple question: What would it take for the electric car to be adopted by the public on a large scale?

Answer:

• Range
• Price
• Design
• Reliability
• Future proofness.

None of which the (pure) electric car can provide today. Battery technology is the biggest inhibitor for mass adoption of the electric car.

And so Shai Agassi, the founder of Better Place had what may well become the Newton apple moment of the 21st century:

What if we decoupled the battery from the car?

A new business model is born. Battery as a service; electricity by the mile. It goes somewhat like this:

• Separate the battery and the car. The pack becomes an easily replaceable element of the car, like in any mobile phone (except the iPhone… hmm).
• Sell the car, NOT the battery. Better Place holds on to the batteries. Now the car costs as much as a normal car. New technology batteries can easily be rolled out. Old batteries can be recycled.
• Remove range anxiety. Better Place, in partnership with hosting countries or cities, builds a network of charging points on parking lots and battery swapping stations. The driver choses to charge the battery or swap it. Swapping takes exactly 1 minute, less time than to pay for your petrol at the station.
• Design real cars. Cars that people want. Carlos Ghosn of Renault bought into the concept without hesitation and is building a fleet of 7 separate models to match market needs. Agassi is also talking to other manufacturers.
• Find a country, an island or a city. Oh look: Israel, Denmark, Australia, Hawaii, San Francisco, Tokyo are lining up.
• Build the infrastructure. 200,000 charging points and 100 swapping stations in Israel.
• Buy energy from renewable sources. Wind, sun, hydro ensure the remote pollution objection does not stick.

The “yes, but” crowd will no doubt have a field day and find all sorts of reasons why this cannot work in their country or anywhere else..

But this is happening right now.

Better Place goes live in Israel in 2011 (piloting starts in 2010). 20,000 cars had been pre-ordered by early 2009.

And, in ten or twenty years’ time, with the luxury of hindsight, it will just look so obvious. 

Like the light bulb.