Better Place: An Israeli Venture to End Oil Dependence


It was an atypical grouping.

In January 2008, Israel’s then-Prime Minister Ehud Olmert and President, Shimon Peres joined with automotive CEO Carlos Ghosn, and Israeli entrepreneur Shai Agassi in Jerusalem. The summit had a simple, yet staggering, purpose: to announce that Israel intended to get off oil.

If you have seen Jon Stewart’s stich-bursting segment that chains together indignant statements of every President from Richard Nixon to Barack Obama decrying the US’s reliance on oil, then you could be forgiven for looking at the Israeli ceremony from 2008 with jaundiced eye.

However, in Israel, there was one big difference: There was a plan. The event was not about rehashing the burdens of a transportation system that is nearly entirely powered by a single commodity, nor of the inextricability of transportation from economic vibrancy, effectively rendering the economic well-being of the entire country to the vicissitudes of Middle East political waves, terrorist plots, drilling accidents, hurricanes and more.

No, instead the event was about proposing a solution – a real, practical solution to transition the nation’s transportation system from oil dependence to a much more diverse, reliable, energy source that can be produced domestically and cleanly – electricity.

The vision came out of a question Shai got asked in a forum of Young Global Leaders – "What are you going to do to make the world a better place by 2020?" Shai answered with another question, "How could you design a system to run a country without oil?" And that question became, "How can you make a car that doesn’t use gasoline less expensive and more convenient than one that does?"

For over a year, as he continued his top management role in a European software company, Shai spent studying nights and weekends refining the answers to these questions. His plan became a white paper – and thanks to encouragement from President Peres, a start-up company called Better Place.

Better Place believes that the only way to scale a system to produce a market-driven alternative to oil for transportation is through electrification. Specifically, that means replacing gas-burning cars with cars that run on electricity via an advanced battery, and, most originally, that the battery that holds that electricity should not be a burden on the driver, but instead should be owned by an operator. Better Place is that operator.

When Better Place buys the batteries, the price premium of an electric car falls away. The consumer ends up with the ability to choose a car that doesn’t use oil without paying a premium. One thing we learned with hybrids is this – a limited proportion of the public will pay a premium to drive a cleaner car – but only about two percent. If you live on the east or west coast of the US, you might think there are a lot more hybrids, but just as with Jews, it turns out they are only about two percent of cars.

A car without a price premium opens up the other 98 percent of the market. What’s more, because Better Place puts battery-switch stations along highways and around cities, that enable consumers to exchange depleted batteries for full ones in just a couple of minutes, Better Place can also offer unlimited driving range in an affordable car with no oil or emissions. Consumers pay a monthly subscription for the miles they drive, and they can get their energy through a charge spot in their home, another one where they work, many more in public places all around the region, or via the battery switch station.

So, with the price of oil now over $100 per barrel, three years after that day in Jerusalem, how is the project coming?

The happy answer is that it remains on track to "go live" in the hands of consumers before the end of this year in both Israel and Denmark. Today in Israel, a Network Operating Center and call center are operating around the clock, a handful of Renault luxury sedans, the first cars that will be mass-produced to work with the network, are already in operation. Battery Switch Stations are popping up along the landscape of Israel’s byways. And a Visitor Center near Tel Aviv, that gives visitors a chance to learn the dangers of oil dependence, the Better Place solution, and to drive Better Place cars on a test track, has seen more than 60,000 people come through it, including many American government officials.

We at Better Place believe that we are absolutely on track to achieve the goal laid out by the government of Israel three years ago – to end the country’s reliance on oil for cars by 2020.

And what about the US? Well, despite the incredible burden the consumer is now facing as a result of rising gas prices, there still has not been the same leadership that we have seen in Israel and elsewhere. For example, the Governor of New Jersey recently ridiculed President Obama’s arguably modest goals on electric cars, calling them the "candy of American politics."

It is my conviction that future generations will look back at the decision taken by the government of Israel in 2008 and liken it to that taken by President Kennedy in 1962. Ridding Israel’s roads of gasoline cars in a decade is no less daunting a task than putting a man on the moon. But the inspiration of the vision of the Apollo Program led to a coalescing of will, resources, talent, energy and leadership that let Neil Armstrong take those small steps in 1969.

In 2011 Israel is taking small steps that may one day be looked back on as the beginning of the end of oil’s century-long global dominance in transportation.

Michael Granoff founded Maniv Energy Capital in 2005 and is a board member of Project Better Place,  created to promote the use electric vehicles by building and operating electric charge networks.