Who Revived The Electric Car?

The New York Times’ Thomas Friedman recently described Israeli entrepreneur and electric car visionary Shai Agassi as the “Jewish Henry Ford.” Ford, a notorious anti-Semite, must be rolling over in his grave.

Agassi, 40, may better be likened to a modern-day Thomas Edison. Just as Edison is credited with “inventing” the light bulb, Agassi may one day be hailed as the man who “invented” the electric car. Neither description is entirely accurate, but that’s hardly the point.

Edison’s true accomplishment at the end of the 19th century wasn’t the light bulb (which had existed in a less perfected form for decades), but rather his role, as owner of a power company that would later become General Electric, in establishing an electrical power system.

So too, Agassi’s vision is to use existing technology (electric cars have been around for almost a century) to establish and operate an energy grid powering zero-emission electric cars.

Until last year, the software wunderkind who calls himself the “Energizer Bunny” was best known for founding TopTier Software, selling the company to software giant SAP in 2001 for $400 million, and then serving as president of SAP’s products and technology group. That all changed in 2005 when Agassi attended the Young Global Leaders forum in Davos, Switzerland (for the under-40 set), where he was faced with the question, “What are you going to do to make the world a better place by 2020?” His answer: Make a country oil independent and free its people from their oil addiction.

A conversation with Israeli President Shimon Peres convinced Agassi that time was running out and that he was the best person to implement the plan. “I have no fear of failing,” Agassi says. “I knew that if we didn’t do it, the implications would be far worse.” Within a matter of months, Agassi had resigned from SAP and raised $200 million for the project, known as Project Better Place.

The plan is ambitious in scope, borrowing its operating model from the mobile phone industry.

“Think of Project Better Place as AT&T or Verizon,” said Michael Granoff, a clean tech investor and head of oil independence policies at Better Place, at a standing-room-only talk last Wednesday on the Upper West Side, sponsored by the pro-Israel campus group StandWithUs. “We’ll build the infrastructure, purchase the electricity and sell miles — in the same way you’re accustomed to buying minutes on a cell phone.”

The best part: the electric car will most likely cost consumers nothing. Just as when you sign up for a two-year contract and your phone company throws in a rebate for a free cell phone, if you sign a contract for a certain number of miles, you may get the car for free (after rebate). “When it’s a choice between driving your old clunker and getting a new car, you don’t have to be environmentally-conscious,” Granoff said.

He calls it a “zero-zero model” — zero carbon emissions and zero costs.

What distinguishes Agassi’s electric car from other electric car initiatives is his plan to set up a network of plugs to charge cars wherever they are parked — in the garage near work, at the supermarket and even on residential streets. “Cars are parked for 22 hours a day,” Granoff says. “We’ll bring a plug to every parking spot.”

The key to Agassi’s plan is sophisticated software (that is his niche, after all) that will know the pattern of each car and instantly recognize which car has traveled the furthest and needs to be charged first.

Instead of owning the lithium-ion batteries, which cost upwards of $10,000, drivers will rent them from Better Place. This will allow automakers to manufacture cars cheaply. Since the batteries that exist today can power only a 100-mile drive, for longer trips, drivers will be able to exchange depleted batteries for fully charged ones at battery transfer stations along the highway.

On Jan. 21 (a day Granoff calls “historic” and hopes will become a second Yom Ha’Atzmaut), Israel signed on as the first country to test-drive Agassi’s plan, giving Better Place the green light to get its electric car network up and running by 2011. Israel will be oil-free by 2018, Israeli Prime Minister Ehud Olmert declared.

The Israeli government pledged its support to Better Place by offering a generous tax incentive meant to encourage the purchase of electric cars. In place of the standard 72 percent tax on gasoline-fueled cars, those who purchase zero-emission cars will pay only 10 percent in taxes. Renault-Nissan will manufacture some 500 prototype electric cars as soon as next year.

In the meantime, Better Place has been inviting politicians, journalists and others of influence to get behind the wheel of a prototype electric car and give it a spin in a parking lot in Tel Aviv. “It’s the most photographed vehicle in history,” Granoff says. (The car looks like Renault’s standard five-passenger sedan, the Megane, only the gas tank has been replaced with an electric outlet). Later this year, the company plans to install 1,000 charge spots in Israel and set up a visitors’ center where Israeli citizens can take turns driving 50 prototype electric cars for the first time. “Their opinions, until now, have been fed by myth, not experience,” Agassi says.

The morning after the Israeli government’s announcement, “25 countries called us,” Granoff says. So far, Denmark is the only other country to sign up, though Granoff says that Better Place is in talks with officials from several countries. The solar generation in the Negev will serve as a virtual oil field for Israel, Granoff says. In Denmark, wind power will play a significant role in powering the cars. Only 750 windmills are needed to run every car in Denmark, according to Torben Holm of DONG Energy, the Danish-government-owned utility that is Better Places’ partner in Denmark.

Bringing Agassi’s electric car network to the United States will prove much more difficult, since installing the infrastructure is a far greater feat in America than in a tiny country like Israel. And from a business perspective, America isn’t necessarily the best place to start, Granoff says. “We can make a lot more money elsewhere, where gas is more expensive.”

That said, “as a business, bigger means a bigger opportunity,” Granoff adds.

The real challenge is policy, as governmental support is necessary for implementing tax breaks to encourage Americans to purchase electric cars. Both presidential campaigns have been in touch with Better Place, Granoff says.

“For the price of two months worth of oil, some $100 billion, we can put in the infrastructure needed to power the nation’s cars and end this oil dependence,” Agassi told the House of Representatives Select Committee on Energy Independence and Global Warming at a hearing in July.

The Better Place vision for oil independence transcends traditional partisan divides, Granoff says. “For those who perceive climate change as the primary threat, Better Place shows a way to run all surface transportation without burning any carbon — while also creating distributed electricity storage to enable intermittent renewable generation like solar and wind,” he says. “For those who perceive the $2 trillion-a- year wealth transfer from the U.S. and other consuming countries to oil- producing countries as the primary threat, the Better Place solution stops that flow of funds.”

Electric cars are in the best interest of national security, and may be the step needed toward achieving peace in the Middle East, Agassi says.

“If you take away the power of oil, over a long period of time, you’ll force oil producers to diversify away from oil and modernize,” he says. “If you get a modern Middle East, you’ll get a peaceful Middle East.”

In the meantime, Agassi is proud that Israel has taken on Better Place as a national project. “The brand image of Israel is a place where problems start,” he says. “We can potentially change it to a place where solutions originate.”