Deutsche Bank analysts say electric cars viable
Deutsche Bank analysts took a serious look at the proposal of Project Better Place for electric cars in Israel and Denmark and came away impressed with its viability. The researchers returned to Germany believing that the Better Place idea would work not only in small countries with extremely high automobile taxes and gasoline prices, but also in the U.S. As reported at Solveclimate.com, their conclusion states "From checking the Project Better Place business model, we are concluding that a pure electric car should not cost any more than a diesel- or a gasoline-powered car, and in most countries its operating costs should actually be lower."
The proposal, spearheaded by Israeli-American entrepeneur Shai Agassi, envisions a financial separation of the car from its battery, lowering the initial cost of ownership. Following the cell phone model, a monthly charge would pay for the battery and electricity. The electric cars would be manufactured by automakers. Nissan-Renault has already announced it will produce electric cars for the program in Israel and Denmark.
The report not only adds financial establishment credibility to the idea, it contained some news. It suggests that five to ten additional countries will announce similar programs before the end of the year. Perhaps more significantly, it predicts two more manufacturers will announce their intention to produce electric cars to work with the Better Place model. The Israeli new website Globes was given an exclusive copy of the report which appears on the site in Hebrew only. ABG has been following Project Better place closely, most recently posting a video of CEO and Founder Shai Agassi's speech on "The Future of Electric Cars."
[Source: Solveclimate.com]
Reader Comments (Page 1 of 1)
Niralisherni 6:09AM (4/10/2008)
Wonderful to see that financiers are not seeing the viability and potential of electric cars! Great news for investors.
-http://www.zapworld.com
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Dave 8:31AM (4/10/2008)
Niralisherni, do you work for ZAP? Seriously, you plug them at every post. back it up!
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Robin 12:04PM (4/10/2008)
This is great news that that this business plan is not only economcally feasable, but enviremomentally and polictically viable.
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Robin 12:08PM (4/10/2008)
Shai Agassi is a true visionary and if any plan to roll out an EV and EV infrastructure to support it, will work then this one should.
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TheRookie 1:56PM (4/10/2008)
I asked Israeli friend to translate the article for me. Here is what he wrote:
1. No other companies apart from Renault/Nissan are mentioned, but they say that some other unnamed companies might be interested too.
2. The scheme will be similar to mobile phone operators one - All inclusive; or pay for car upfront then pay monthtly rental; or pay-as-you-go.
3. Battery exchange stations are unnecessary if mileage doesn't exceed 100 miles/day, in which case the car could be recharged at home.
4. Each battery is likely to cost 10K USD.
5. The target is to start vehicle mass production in 2011.
As I don't speak Hebrew myself I have to rely on his translation. Maybe someone on this forum can translate the whole article and post it here?
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stephendarori 3:06PM (11/05/2009)
What absolute nonsense- there are already electric cars in Israel and in 2010 14 new models will be imported into Israel manufacturer by the top 7 brand names in Car Manufacturing GM 0 Volt, Nissan -Leaf and if you want the full list then some where in the 140 comment discussion on Better Place is the full list . Per Deutche Ban the cost of a 2006 deployment in Israel a will be at least $1.1 billion but Deutsch Bank fails to factor in the enormous cost of high voltage electricity estimated by The Chief electricity Engineer of the Israel Electric Company at beteen $10 to $25 billion ( and the Israel Electric Company is certainly not going to foot the bill). The Better Place Model calls for deployment of their battery charger in quantities greater than trees in urban areas by a factor of 50. So far 198 of 258 Israeli Municipalities are firmly against any Better Place deployment and 78 of 120 Knesset members are equally so - this is really a bipartisam note as it includes members of the Knesset from both sides of the house and so far 4 Arab MK and this may go all the distance to the 1st full house - 120 members of the Knesset votimg no to a Better Place deployment.A lithium battery will need to be changed every 2000 kms so do your own arithmetic and commercial supplies of lithium will per Frost and Sullivan be exhausted by 2019 and probably a lomg time before that.
"Better Place will spend $1.1b on Israeli electric car project"
Deutsche Bank says profitability depends on global fuel prices.
Dubi Ben-Gedalyahu4 Nov 09 15:04
Better Place will have to invest $1.1 billion over the next six years to buy the batteries and build the battery replacement centers and recharging points for its electric car venture in Israel alone, according to a report by Deutsche Bank on electric cars.
Over the past year, Deutsche Bank conducted an in-depth analysis of Better Place's business plans and economic model, which includes the capital investment (for purchasing the batteries), locking in energy costs with long-term contracts with utilities, and payment by customers through subscriber fees.
Deutsche Bank concludes that most of model's profitability comes from the arbitrage gap between the wholesale purchase price of the electricity and the price of fuel. The bank estimates that as the global price of oil rises, and as governments increase incentives for emissions-free vehicles, the arbitrage gap will widen, rendering Better Place's business model more attractive.
Deutsche Bank believes that Better Place's model could be feasible even without government aid, but mainly in specific areas around the world with high fuel prices and relatively long journeys. The bank figures are partly based on Better Place's own estimates.
The bank estimates that the company could achieve a 5% share of Israel's vehicle fleet by 2016, amounting to 110,000 electric vehicles.
This 110,000 figure is based on a net annual growth rate of 14,000-30,000 subscribers a year in 2012-16. Deutsche Bank believes that if this target is reached, and assuming average annual revenue of $4,250 per subscriber, Better Place could see $500 million revenue a year by the end of 2016.
Deutsche Bank estimates that the majority of Better Place's investment will be capital investment in buying the batteries. Deutsche Bank expects the cost of the batteries to gradually drop from $14,000 each today to $9.500 each in 2015. Assuming 110,000 cars by 2016, the investment could reach $1 billion. In addition, Better Place will have to invest $25 million to set up 50 battery replacement centers, and up to $57 million to set up 77,000 recharging points at $750 per point.
Niralisherni 4:57AM (4/11/2008)
@Dave, I coundn't just be a fan of electric vehicles? Or a shareholder? Or just want more people to get in on the EV movement?
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