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Electric Car Planning

Page history last edited by Malcolm 15 years ago

 - From the Desk of David Pogue -

> ----------------------------------------

>

> Electric Cars for All! (No, Really This Time)

> By DAVID POGUE

>

> Last Sunday, "CBS News Sunday Morning" broadcast my report

> about Better Place, a radical, overarching plan to replace

> the world's gas cars with electric ones--really, really

> quickly. The nutty thing is, it just might work; the

> streetside charging outlets for these cars are already

> under construction in six countries and two U.S. states.

> (You can watch the story here http://bit.ly/2rGU6g )

>

> As always, there wasn't enough time on TV for the whole

> interview. So here's a longer, edited excerpt of my chat

> with Better Place chief executive Shai Agassi, former SAP

> executive.

>

> DP: Explain how this is different from all the failed

> electric car programs that have come before.

>

> SA: Most of the car efforts were done from within the car,

> and assuming that there is no infrastructure change at all.

> It's as if people were trying to build cars, but skipping

> over the gas station.

>

> We started from the infrastructure. We came up with an

> electric car that would have two features that nobody had

> before. 1) The battery is removable. So if you wanted to go

> a long distance, you could switch your battery instead of

> waiting for it to charge for a very long time.

>

> And 2) It was cheaper than gasoline car, not more expensive.

> Because you didn't buy the battery. You paid just for the

> miles and for the car.

>

> DP: So what will you guys make? What will you do?

>

> SA: We sell miles, the way that AT&T sells you minutes. They

> buy bandwidth and they translate into minutes. We buy

> batteries and clean electrons--we only buy electrons that

> come from renewable sources--and we translate that into

> miles.

>

> DP: What are we talking about here? What's the

> infrastructure you're building?

>

> SA: We have two pieces of infrastructure. 1) Charge spots.

> And they will be everywhere, like parking meters, only

> instead of taking money from you when you park, they give

> you electrons. And they will be at home, they'll be at

> work, they'll be at downtown and retail centers. As if you

> have a magic contract with Chevron or Exxon that every time

> you stop your car and go away, they fill it up.

>

> Now, that gives us the ability to drive most of our drives,

> sort of a 100-mile radius. And that's most of the drives we

> do. But we also take care of the exceptional drive. You

> want to go from Boston to New York. And so on the way, we

> have what we call switch stations: lanes inside gas

> stations. You go into the switch station, your depleted

> battery comes out, a full battery comes in, and you keep

> driving. It takes you about two, three minutes--less than

> filling with gasoline--and you can keep on going.

>

> DP: But it sounds like you're talking about a parallel

> universe, where there are hundreds of thousands of charging

> spots and switch stations. There aren't any.

>

> SA: Well, that's what we're building. If you think of our

> first location in Israel, we will have about a quarter of a

> million charge spots before the first car shows up. Just

> like you wouldn't buy a cell phone on a network that wasn't

> built yet. You have to first build the network. And then

> let the cars come in.

>

> And so we put a massive investment in big infrastructure

> projects: Green jobs. A new electric infrastructure for

> cars.

>

> DP: And has nobody said, "By the way, this is crazy?"

>

> SA: Oh-- about nine out of ten people say it's crazy. But

> the other ones are actually saying "Where can I put my

> money?"

>

> We raised $200 million in a seed round, the largest seed

> round of any startup in history. We raised a $135 million a

> week ago in Denmark to put the same network in Denmark.

> We're raising $700 million in Australia to build this

> network on the biggest island you can find. So this is

> actually getting a lot of support and a lot of funding.

>

> DP: Which governments are actually signing up?

>

> SA: Israel was first. Denmark signed up next. Denmark is the

> host of the next climate change conference, and the prime

> minister really backed this up: They put a huge tax on

> gasoline cars, 180 percent tax, and zero tax on electric

> vehicles.

>

> Australia signed up after.

>

> Then we went to the U.S. Gavin Newsom, mayor of San

> Francisco, coordinated an effort of all the mayors in the

> Bay area to create the next transportation island, the San

> Francisco Bay area. Even though it's not an island.

>

> Governor Lingle of Hawaii was really the driving force

> behind getting us to Hawaii. And then the Premier of

> Ontario announced about a month ago that we're gonna go to

> Ontario. And Ontario, most people don't know, is the

> capital of cars in North America. They make more cars than

> Michigan these days.

>

> And there's a lot of interest beyond these first six

> networks that we've announced. We're talking about 25

> countries around the world, and various different governors

> and mayors in the U.S.

>

> DP: Hawaii's an island. Australia's a big island. Why

> islands?

>

> SA: Contained islands are easier to work with, because you

> have sort of an ecosystem of cars that don't go in and out.

>

> DP: Now so far, these electric cars that are coming to

> market: Tesla, $100,000. Volt, $40,000. How much will one

> of these cars cost?

>

> SA: If you take the battery component out of our car--which

> is what we do; we don't let you buy the battery, we buy the

> battery--then our cars are on par with gasoline cars. So an

> SUV will cost roughly the same as an equivalent gas SUV,

> roughly in the $20,000 range. A sedan will cost roughly the

> same range. About $20,000.

>

> What we also do is, if you're committing to driving a long

> distance--for example, if you're committing to 20,000 miles

> a year--we give you a discount. And a discount can be

> sometimes $50 a month, sometimes $100 a month, towards the

> car. In other words, we pay for your financing of the car.

> And so you get a car that's actually cheaper than its

> gasoline equivalent, depending on how many miles you

> commit. You can go all the way down-- and in the case of

> people who drive a lot, like taxis--all the way down to

> zero.

>

> DP: Free car? If you sign up for the maximum minutes plan?

>

> SA: This is Oprah for everybody. Right? (LAUGH) It's, "You

> all got a free car!"

>

> DP: Now, you don't strike me as a guy with a lot of car

> experience. Why is everybody buying into this vision that

> you, a software guy, are bringing them?

>

> SA: Well, I'm more of an integration guy. So if you think

> about it, even though I was at SAP, SAP is about

> understanding the art of technology, the software part, but

> also understanding the processes of business. And if you

> look at what I did in the past, I managed teams who brought

> about a 100 products a year. We had labs in 25 countries

> around the world. Very, very complex solutions that drove

> the largest companies on earth, including car companies.

> What I bring in is that understanding of complexity of both

> the technology and the economy.

>

> When you look at the problem mobility with a fresh set of

> eyes, sometimes you find solutions that the guys who are

> sort of locked in the inertia of day-to-day business--have

> missed.

>

> DP: What do you think about hybrid cars?

>

> SA: Well, the most successful hybrid car in the world,

> Prius, is roughly around 1 or 2 million cars. Out of about

> 750 million cars. In other words, we're having 0.0 percent

> effect on oil consumption.

>

> During those 12 years, we added 200 million gas cars. We're

> moving really slowly if we're gonna go to hybrid! What you

> need to do is you go to zero: zero emissions, zero oil. And

> you have to scale it to infinity, if we really want to make

> a difference.

>

> DP: I hear a lot that the battery technology just is not

> here for electric cars. It has to work in the Arizona

> summer. It has to work in Fairbanks, Alaska. Short battery

> life, lethal to throw into the junkyard when it's done.

> Have you thought about this stuff?

>

> SA: Yeah, so let's demystify batteries for a second. As a

> consumable, the batteries we're getting today are roughly

> in the range of about $.06 to $.08 a mile.

>

> If you try and find gasoline, in the U.S. you're roughly at

> about $.10 to $.12 a mile. So the first thing is it's

> cheap. Second thing is, the batteries we're using are not

> lead-acid batteries. They're lithium iron phosphate. All

> within the 35 most common elements in nature. So they're

> not dangerous to the environment.

>

> Three: They're consumed for a very, very long time. These

> batteries will last multiple generations. 20, 25 years.

>

> The fourth element is that there's always a better battery

> around the corner. Now in the past, that was a negative

> thing. Because you were afraid to buy a car and get stuck

> with a car that has a battery that's an older generation.

> And then not be able to sell it. It was a very, very

> negative thing.

>

> What we've done by decoupling the car and the battery is, we

> took away that fear. You may buy a car with generation 1

> battery today, and then three years, five years, ten years

> from now, you may get a different battery that's designed

> with backwards compatibility into your car, but gives you

> longer range.

>

> DP: How will it work for a subscriber? Specifically?

>

> SA: Most of what we've done is try to make it convenient. We

> don't want you to pass a credit card when you charge the

> car. We don't want you to pay every time you switch the

> battery. We looked at it from the angle of convenience.

>

> And so we're probably gonna see three different pricing

> models. In some places, you'll see it sort of as

> pay-as-you-go, very much like a gas tank. I mean, if you

> think about it, a gas tank is sort of the prepaid

> phone-card model of cars. You come, you buy 400 miles, you

> drive 'em. You buy another 400 miles.

>

> So they'll be something like that in the base package.

> There'll be a fixed number of miles, plus a surcharge if

> you go more than that--1,500 miles a month or something in

> that range. And then there'll be the all-you-can-drive

> model. You pay one-time fee, you and your family can drive

> as much as you want on that car.

>

> And we like those guys the most. Because effectively, what

> they do is they take the drivers who consume the most oil,

> and spew out the most pollution and CO2 emissions, off the

> road first. 'Cause if you come and tell people there's a

> flat fee, then the guys who drive the most, the extremes of

> the extremes, think you're crazy, and they're the first

> ones who come in and jump. So it's a self-selection process

> of the guys who we want to get off the road first.

>

> DP: Oh. And-- do you have any idea how much that might cost?

>

> SA: It depends on the price of gasoline in the market that

> we're coming in, because we're replacing gasoline miles. So

> if you're in a country where gasoline is at $7, $8 a

> gallon, which is what Europe is right now, the cost of a

> mile is much higher. If you're in the Bay Area or in

> Hawaii, you're paying a lot less per mile. So we need to be

> competitive with the price of gasoline in the location.

> That's why Europe has a significant advantage over the U.S.

> in getting these kinds of solutions in place.

>

> DP: Your critics have had their potshots. What are the

> realistic obstacles?

>

> SA: This is a massive integration project. And everything

> needs to happen roughly at the same time. In other words,

> the cars need to show up at the same time as batteries need

> to produce in scale. At the same time as the

> infrastructure's in the ground. All of that needs to be

> synchronized with beautiful software that runs inside the

> car. And then back-end software.

>

> And then all this has to happen at a scale that is scary, to

> a certain degree. We need to be at 100,000 cars in 2011.

> About 100 million cars by 2016 to 2020. A thousand-times

> growth in production capacity and in installation capacity.

> There's never been a project of this magnitude in history.

>

> DP: No.

>

> SA: But if we don't get a hundred million cars, by the end

> of the next decade, [the world will have] a billion

> gasoline cars on the road--and we're done. We don't know

> how to produce enough oil for a billion cars. So humanity

> needs to switch before we run out of natural resources: air

> and oil.

>

> DP: But aren't you just shifting all the energy producing

> pollution from the individual tailpipes to the power

> plants?

>

> SA: Well, we have committed to only buying clean electrons.

> So we've made a decision that if we put a car on the road,

> we put a renewable source on the grid at the same time.

>

> DP: Aren't the gas and oil industries going to want to

> squash you? They'll have lobbyists and PR...

>

> SA: So, something fascinating happened over the last 12

> months. The price of oil fluctuated up and down, from a

> $100 to $150 to $50 a barrel.

>

> And it drove everybody in the industry crazy. We know what

> to do with oil: We drill, baby, drill. Right? But at $50,

> we can't drill. It's so expensive to drill, that the price

> of the oil doesn't pay for the cost of drilling. The

> fluctuation is worse to the car companies and the oil

> companies than any stable price, high or low. And so what

> all these car and oil companies are asking for right now is

> some sort of a stabilizer.

>

> They need a company that would give an alternative that

> would be fixed in price. And they want it to be stabilized

> roughly around $75 to $100 a barrel. That's what they tell

> us. "$75 to $100 a barrel allows us to find marginal oil."

> And so they're actually liking us now. They want us to

> succeed because we're viewed as a sort of a stabilizing

> buoy.

>

> DP: But you're also viewed as someone who's trying to end

> the oil industry.

>

> SA: Well, they don't think it's gonna happen that fast.

> (laughs)

>

> DP: It seems like you're the gatekeeper of all this. You

> could become Bill Gates. You could become the guy who

> changed it all and became fantastically wealthy and

> successful. Have you crunched the numbers at all, and said,

> like, "Yeah, I'm glad I quit SAP"?

>

> SA: First of all, I'm already glad I quit SAP. Not because

> SAP isn't a fantastic company--I love SAP--but because

> there's a purpose in life. And that higher purpose is much

> more important than making money. I've been extremely

> blessed and successful. I sold my first start up at 30. I

> sold it again at 33. I made enough money in both cases that

> my kids don't need to worry about money.

>

> So I've never done anything for money that point, at age 30.

> But when you find a great purpose in life, you gotta pursue

> it. It's when your big question finds you. You can't let

> it go.

>

> One of the things that we've done that is very interesting,

> unique for a first mover, is, every government we go in to,

> we ask for one thing: "Make sure that you build an open,

> standards-based network." So that we can't lock any

> competitor out, and competitors can't lock us out when they

> show up. We want to make it so that the networks are so

> open, that I can roam from my network to their network and

> back.

>

> We believe that if we align all the vectors together, we'll

> get adoption much faster. We had to opt for either speed or

> greed, and we picked speed.

>

> DP: So speaking of these networks. When I plug into one, how

> does it know who I am?

>

> SA: We have a protocol that goes between the car and the

> charge spot that says, "I'm car number 41, I'm seeing

> charge spot number 72." And the charge spot says to the

> central computer, "I'm charge spot 72, I'm seeing car 41."

> And the central computer says, "Okay, relax, I know you're

> there. And I'll tell you when you can start taking power."

>

> And it tells them to take power when the utility, the

> supplier of electrons, says "I got power for you, for that

> many cars." Utilities tell us every three seconds how many

> cars can charge. And based on that, we moderate. The cars

> that need it the most importantly right now. So we sort the

> priority of the cars, based on how much they've got and how

> far they can go, and what's the probability the driver will

> show up again. If you came into work, and you're usually

> ten hours at work, you won't charge immediately in the

> morning. If you just came home, it's 5:00 and you don't

> leave, usually, you won't get charged.

>

> But right as you park your car, you can press a button that

> says, "I need juice now." We put you in the top of the

> line.

>

> So there's a lot of software, very simple. Mostly it's one

> click. But we do a lot of management behind the scenes.

>

> DP: Do I need to install a charging spot in my garage?

>

> SA: Yes. It's about $250 to $300.

>

> DP: So I can't just use a regular power cord?

>

> SA: You could, but what we're trying to do is make it so

> that when you plug in, YOU don't pay for the electricity.

> WE pay for the electricity; you only pay for the miles.

>

> DP: What's the best hope of when we'll start to see these

> cars in America?

>

> SA: Our stated goal is that mid-2011, we'll be in mass

> consumption. And the fist sites are Israel, Denmark and

> Hawaii. The second half of 2010, we'll be running a massive

> test: tens of thousands, hundred thousand spots in Israel.

> And right after that in Denmark with. Testing our software,

> testing our hardware, testing the switching, the entire

> network.

>

> We've just installed the first charge spots in the U.S., in

> about 50 parking lots, tested the equipment for

> installation. In a couple months, we're installing the

> first switch station in Japan.

>

> It's about 2 and a half years of testing, from now till the

> mass release.

>

> DP: Wow, that's really fast.

>

> SA: For a transformation of this magnitude, it's immensely

> fast. Yes.

>

> DP: By the way, how do you stop teenagers from just walking

> by and unplugging everybody?

>

> SA: Oh, it's a secret. And they shouldn't try it. (LAUGH)

> No, you can't just plug it out. You need your keychain.

>

> DP: Oh, so the outlet locks onto to the socket?

>

> SA: It has a mechanism in there to avoid vandalism.

>

> DP: Oh. You've thought of everything.

>

> SA: No. But we've thought of some of the things. (LAUGH)

>

> http://www.nytimes.com/2009/03/19/technology/personaltech/19pogue-email.html?8cir&emc=cir

>

> ..................

>>> Visit David Pogue on the Web at DavidPogue.com

> http://www.DavidPogue.com?8cir&emc=cir

> ..................

>

>

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