Why is Better Place's Shai Agassi not being more straightforward with WaPo?
Shai Agassi wants to address the infrastructure side of the electric car problem. While electric cars can nominally be "fueled" by any electrical outlet, the fact is accessible outlets don't necessarily exist where most electric cars will be used in the near to mid-term. Batteries as they exist today are also very expensive, heavy and have comparatively poor energy density, limiting the range of cars that use them. To address those issues, Agassi and his company (Better Place) are cutting deals with governments around the world to install networks of public charging stations and battery exchange facilities.
In a conversation with the Washington Post, Agassi discusses what he describes as a broken business model for the auto industry. While he agrees that the United States needs an auto manufacturing infrastructure, also thinks it should be making a whole new kind of car, namely battery-powered models.
While Agassi's goal is worthy, some of his analysis seems flawed. For example he says that Detroit only made money on financing while losing money on selling vehicles. This is not accurate. When larger cars and trucks were still selling wel, Detroit made huge profits directly on the sales of those vehicles. It was small cars that they didn't make a profit on. In discussing his plan for exchangeable batteries he mentions hydrogen and says, "This is not the hydrogen freeway where you need to build an entire infrastructure" This implies that electric vehicles need no infrastructure which is patently false. His entire business is predicated on that infrastructure. A network of battery exchange stations is an infrastructure. Those stations will have to be built, the equipment to do exchanges installed and batteries and chargers purchased. If Agassi wants to make the Better Place plan a reality, he needs to be less disingenuous.
Gallery: Better Place Around The World
[Source: Washington Post]
Reader Comments (Page 1 of 2)
nads 4:11PM (12/08/2008)
"This is not the hydrogen freeway where you need to build an entire infrastructure" This implies that electric vehicles need no infrastructure which is patently false.
If the entire focus of Shai's article was infrastructure development for electrics, and that is the sole purpose of Better Place...how is he somehow implying that "electric vehicles need no infrastructure"? Oh, you just had to make something up keep up your post count?
No surprise that oil-slicked Sam Abuelsamid is now attacking proponents of electrics. I guess because Agassi's strategy doesn't consist on huge new taxes on gas (federally mandating a higher profit margin for oil companies), his words must be minced and distorted.
As far as electrics go, the GRID is the infrastructure. Anyone right now can buy or convert an electric and charge it, or with a call to the electric company, install a faster charging outlet for greater convenience, or develop a partnership with an electric company for even faster-charging outlet stations, as Better Place is working to do with great results. An easy solution to the battery-swap stations would be partnerships with auto-shops chains. Batteries could be warranted or leased, easing the swapping process. Heavy government subsidies to develop super-charging centers (as part of the massive infrastructure program already being planned) is even a possibility.
With hydrogen, you literally do have to build an entire new infrastructure to hold the highly explosive hydrogen, and thats after you figure out how to make a car run on it that isn't more expensive than a Bugatti Veyron. With hydrogen, SIGNIFICANT technological challenges must be overcome, followed by hugely expensive infrastructure costs. The oil idiots would love us to wait around till this becomes a possibility, but the fact is we'll probably have someone walk on Mars before the average consumer can go out and buy their first hydrogen car. Again, what did Shai Agassi say that was "patently false"?
Sitting on EVs to wait for the mythical hydrogen car is borderline insanity. Low interest loans to automakers, high-dollar rebates to consumers (along with SUBSIDIZED, MANDATED, EV production) could get us EV fleets in a couple years. Only fools and oil profiteers could be against this.
Reply
Noah 3:22PM (12/09/2008)
Well said! Exactly, the Grid is the infrastructure, our homes are the primary charging spots. Hooking up charging posts at major parking areas (along streets where you pay to park, at work, etc.) isn't too difficult.
I see hydrogen as complimenting electric cars in the future (20 years from now), but we are ready for electric cars now, and if we pursue the battery charging/swapping part of the infrastructure, we will be sitting pretty in 5-10 years time.
Chris hollomon 4:18PM (12/08/2008)
I refer anyone wishing to know a little more about what they are trying to do to see the article in WIRED. I think they his statements aren't great but he trying to solve an issue that this site blatantly supports, yet, this article axes on. Not to say you should hug all things green, but a little more digging would turn up more good than bad with his company and what they are trying to do.
Reply
don 4:26PM (12/08/2008)
ok sam, where do you see personal transport 10-15-20 years from now, and how do we get from here to there ? We do have distributed electricity (yes, we need to upgrade the national grid, make plugs commonplace, maybe have battery swap available...) but we don't have easy hydrogen availability and the physics of H generation and storage looks to be way less efficient than battery storage and use of electricity...... For a list of reasons we all know, not the least of which is keeping this planet viable for more than invertebrates, we do need to be burning MUCH less oil very,very soon.
Reply
jzj 4:38PM (12/08/2008)
Sam, if I did not want to think better of you I would suspect that you are acting to undermine a serious business -- the only one that is presently funded and working -- to provide fully-functional electric cars to the masses. Let me address your faulty assertions in order.
First, you assert that American car makers make money selling cars. Looking at the profit and loss statements of the Big three over the past years, why would you quibble with Agassi's statement that they only made money on financing? It is well demonstrated that they lose money on the average car sale itself, and only make profit on the financing: as recently reported in Harpers, "a finance manager at one of the Big Three automakers told me, 'We used to be a car company that sold financing on the side. Now we are a bank that makes cars.'” Even the UAW no longer argues that making the car in and of itself is a winning proposition. And to what end are you be attacking Agassi on this point?
Second, you equate setting up a hydrogen highway with setting up charging and battery changing stations, because both require infrastructure. Well, I suppose you are right to a point: regardless of whether my son wants to have a catch in the backyard or buy a professional team, in either case a ball is involved. But aside from a degree of commonality, that you seem to think these are tantamount to the same thing either demonstrates a profound lack of knowledge regarding the needs for a hydrogen highway versus the needs for electrical charging stations, or you are really trying to confuse the public.
Your headline accuses Agassi of not being straightforward because in your opinion he "implies" something that is "patently false." This is quite a case of hyperbole on your part, and detracts from your body of work. You appear bent on taking down Agassi personally. I would think your reputation would be better served taking down this post.
Reply
why not the LS2LS7? 4:48PM (12/08/2008)
The only business presently funded and working? What as "A Better Place" done so far?
They haven't done anything but produce a lot of hot air so far.
I also disagree with your statements that somehow I should ask some unnamed mid-level finance manager or the UAW (ha!) about the business of making cars.
don 4:52PM (12/08/2008)
very well articulated ! thank you !!
don
why not the LS2LS7? 4:53PM (12/08/2008)
I agree, the amount of infrastructure needed for electrics is huge. And Agassi knows it. Every proposed system has an infrastructure. We have gas stations all over the place, natural gas needs pipelines, and electricity needs stations and more ability to carry power.
Charging a lot of electric cars is going to require a beefed-up grid and probably a smart grid (so your car and your neighbor's cars don't go into fast charge mode at the same time and blow up neighborhood transformers).
Agassi is off his rocker when he says that electric doesn't require a lot of work.
I do wish Agassi well though. In the end, I think that being able to charge everywhere will mean we can carry a lot less energy in cars, which will make electric cars cheaper and even more efficient.
Reply
roz 6:48PM (12/08/2008)
I don't understand how the battery swap concept is feasible. Even it the swap stations were there, if I need to swap every 50 miles that right there is a huge hassle.
I don't want to pull off every 50 miles. And if this were successful we would need a lot of these stations and there would be a lot of traffic and lines of cars pulling off and trying to exchange the battery.
Reply
DaveD 7:53PM (12/08/2008)
Thank you Roz!
What the hell are they thinking with this battery swapping nonsense? That is the silliest thing I've ever heard of from a serious business. Can you imagine the mess trying to deal with the thousands of batteries that need to be stored, swapped and charged at a gas station...the equipment needed to do it, etc etc. What a stupid idea. The batteries (chemistry, voltage, current, size, shape, capacity, charge rate, where you put them in each car and how you access them in different designs...etc) are so vastly different and will be so for a LONG LONG time that this is a JOKE.
Now, if they want to spend all that money and time deploying rapid charging stations, anticipating the use of battery chemistries that can handle a 5-10 minute charge with nothing more than a standard plug and a software handshake to tell the charger how fast this particular battery can be charged? Ok, now you're talking a practical goal that is well worth pursuing.
Arnold Schneider 10:19PM (12/08/2008)
You got the numbers wrong: It's 100 miles. How many days a month do you make single trips of more than that distance at a time?
roz 12:42AM (12/09/2008)
Ah, well, I had not seen that 100 mile figure. 100 miles is much more workable if that can be practically be achieved. That must be a huge battery pack. If the Telsa being so small and light has a range now under 200 miles and it has what? $40K of batteries in it, that pack must be huge and expensive.
A trip from San Jose to Tahoe is 220 miles. Thats 2 swaps for that journey - each way. Still a lot. A drive to Sacramento is 120 miles - one swap - for a 2 hour trip. SJ to LA of course is 330 miles. 3 swaps? it just not seem like a real thing to me.
I really think the proposed model could make sense as a local vehicle. I can't see it as something useful for interregional travel, if multiple swaps are needed continually. Maybe swaps can happen very fast, it just not seem to me to be an efficient way to function.
And given our collective experience with batteries I think we all know that batteries have a lifespan and real world range of these batteries will diminish with age. People are unlikely to be indifferent as to the battery they receive after a swap, even if they don't personally own it. If customers depend on it, and they have no control over it, it owns them.
Chris M 1:04AM (12/09/2008)
The only EVs with 50 mile or less range would be low speed "neighborhood electric vehicles" that aren't meant to go very far and wouldn't have battery swapping.
Now, many plug-in hybrids would go less than 50 miles on electricity only, but with their "range extender" the total range is over 300 miles, and can be quickly refilled with fuel for another 300 miles. They won't be using battery swaps, either.
Where battery swapping makes sense is with much longer range EVs of 150 to 250 mile range. No, DavidD, they wouldn't be using gas stations, or stocking hundreds of varieties of batteries. Swap stations will be built specifically for that purpose. They would be using one type (or at most 2 or 3 types) of batteries, in standard modular sizes. Small vehicles might use just one battery module, larger vehicles might use 2, 3, 4, or even 6 modules. Only EVs designed for battery swapping would be eligible, they will NOT try to "battery swap" every type of EV on the road.
Also, the batteries would be leased from the same company doing the battery swaps, so no more concern about swapping a brand new battery that cost you a fortune for an old clunker.
Part of the lease agreement would be would cover the replacement of any battery that fell below a certain performance standard.
Finally, Project Better Place is also working on charging stations, and plan to install a lot more charging stations than battery swap stations!
roz 3:54AM (12/09/2008)
thats nice that there is an agreement that says they have to replace the battery but how does that help me when the battery 60 miles into my second leg on my way to Tahoe and my family is stuck on the side of the road?
I really think that there will be a tenancy for people, if they have a good battery to want to keep it and not have to swap it away.
People fight and jockey for position on things they don't own all the time, consider plane seats. Passengers don't own them, they all arrive at the same time, yet people fight to have a better seat.
anon 8:38PM (12/08/2008)
Friends, I have THE business plan to save us all.
I don't have any experience in power generation, power grid infrastructure, batteries, cars, or making cars. I'm outside the box, running in circles, and pitching this plan to you right now!
What is it? PROJECT BETTER PEOPLE.
I will partner with global car makers and local governments to market the next generation of plug-in hybrids to the people that really deserve them.
By partnering with local governments PROJECT BETTER PEOPLE will identify motivated individuals in communities who want next gen plug-ins and help car makers sell these cars to them.
Then, these individuals with righteous fury will become Plug-in Evangelicals, spreading the word with bold action, and helping usher in a new age by converting SUV consumers into BETTER PEOPLE driving plug-in hybrid cars.
PROJECT BETTER PEOPLE gets a cut from the government for every person we identify and from the car company for every car we help sell.
What's that you say? This makes no sense?
My company's not adding value? I'm getting paid for doing nothing and governments and corporations can do all this on their own?
Why I bet you'd say similar things about PROJECT BETTER PLACE and Shai Agassi!
Well, then you, my friend, are part of the West-Coast- East-Coast- Joe-the-Plumber- Soccer-Mom- Right-Wing- Liberal-Elite cabal that has thwarted our efforts so far.
A pox upon you and Sam Abuelsamid.
Reply
anon 9:45PM (12/08/2008)
All kidding aside... From the article, all quotes by Shai Agassi.
"They've got a car that's running on only two wheels, and they're going to throw away some of the baggage."
Huh?
"A third of a century later, during the oil crisis, the industry had to change. But we squandered the opportunity. We let the Japanese carmakers come into the U.S. and do whatever they wanted."
I'm pretty sure that Japanese cars had to meet the same reg's as American cars. Plus, we passed import quotas to force what Lee Iacocca said "Make them [Japanese] build them [cars] here". The Japanese did and thousands of Americans have jobs now because of it. How is that letting them do whatever they wanted?
"You've got an industry designed almost entirely on a product that doesn't make money when it sells but only makes money when it comes back for service or resale. So they made money on financing the car. All that you needed was one pull on the oil-price lever to destroy that model."
How is the business model broken? Gas prices aren't keeping people from buying cars, the fact that people can't get loans is. Plus, Toyota and Nissan both make - in the U.S.A - pickups and SUVs with big honking V-8s. Neither of them are asking for a bailout. Again, how is the model broken?
"So what you need is a model where you're getting some revenue from the miles driven. If Ford got one cent per mile for every Ford car on the road, Ford would get $10 billion a year straight to the bottom line."
Please note that he isn't talking about saving you money. He's talking about taking more of your hard earned cash.
"The limit to the range of our cars today is not the gas tank; it's the gas station. It's the same thing here. We don't extend the range; we exchange the batteries. This is not the hydrogen freeway where you need to build an entire infrastructure."
But Project Better Place will have to build charging stations in parking lots. Everyone says that EVs should charge at night when their load on the grid is manageable. Agassi wants to put in charging stations in parking lots so EVs can charge during the day. We barely make enough power during the day as it is. How is our grid going to handle that?
And, the money to pay for grid upgrades necessary to support EVs charging during the day is going to come from.... where?
"It is a beautiful project, only made in America."
That's funny I seem to remember PBP signing deals in places like Denmark, Israel, and Australia.
Look, I'm excited about EVs but not this guy.
Reply
Arnold Schneider 10:21PM (12/08/2008)
Shai is right on. Thumbs up.
Reply
reeco 3:56AM (12/09/2008)
Geez it obvious sam has a thing against agassi. .. Might not say it blatantly but its very obvious. Sams post is structured mostly on this pivitol word. "this IMPLIES....blah blah blah"
Gotta love it when people assume. You should know sam...Assumptions are the mother of all F*&% ups.
Why dont you just ask him what he meant instead of inventing things. Also everyone knows media will never ever take words in context. which allows them into invent the angle of the story that THEY choose.
im guessing when he said " detriot only made money on financing while losing money on selling vehicles" that he meant for a certain period of time. Even a school kid can figure out that GM made money on vehicles. So it had to be in context.. basically piece on agassi is right(without context)...but obviously wrong(with context)
Reply
anon 12:41PM (12/09/2008)
'im guessing when he said " detriot only made money on financing while losing money on selling vehicles" that he meant for a certain period of time.'
Why guess when you can read the article, dude. That's not what he said.
From the article,
POST: What would your plan for all-electric vehicles mean for the countries that adopt it and for the U.S. auto industry?
AGASSI: The United States cannot afford not to have a car industry. If it goes away, the economy is going to tank at speeds we haven't seen before. . . . Just as we can't have one bank bring down the entire financial industry, we can't have one car company bring down the entire car industry.
But you have to have a fundamental change in the business model of cars. You've got an industry designed almost entirely on a product that doesn't make money when it sells but only makes money when it comes back for service or resale. So they made money on financing the car. All that you needed was one pull on the oil-price lever to destroy that model.
Analysis by ME -
Again what did Agassi say: "You've got an industry designed almost entirely on a product that doesn't make money when it sells but only makes money when it comes back for service or resale. So they made money on financing the car."
NO. The industry is not in trouble. Honda is OK, VW is OK. Toyota and Nissan are also OK in spite of building big SUVs with big honkin' V-8s.
You will also notice he said "...made money on financing the car." He did not say "are only currently making" or "only making right now".
CanaDoc 5:54PM (12/16/2008)
This is mostly in response to roz’s posts 11 & 14:
As a flipside to your “If customers depend on it, and they have no control over it, it owns them” statement: if you hold onto the notion of “I need access to an ICE-powered car because something, someday MIGHT happen where I need more than 100 miles of range without stopping” who’s being ruled by something they have no control over now?
There’s so much fear mongering about range anxiety – you can bet that just over 100 yrs ago the horse and buggy camp were crying “you’re a fool if you go on a long range trip in a motor car! The only fuel our vehicle needs is oats and water, plentiful and available. Don’t take the chance, you’ll get stranded and die if you ever replace a horse with a motorcar!” and, at one point that may have been true, but look where we are today.
This “EV’s are useless/dangerous/impractical until they meet every one of mine and everybody else’s demands right now” is shortsighted. It’s just a modern a day version of the horse and buggy crowd’s cry and it fails to admit that, just like ICE vehicles once were, EV’s and their supporting infrastructures are at a starting point and will only get more robust over time.
The truth is, there isn’t an EV for everyone… yet, but based on studies upon studies, a 60, 80 or 100 mile EV with a proper infrastructure (charging stations, swap stations, Mr. Fusion, etc.) is going to satisfy A LOT of drivers’ needs.
As for those ‘iffy’ batteries of today, if people keep regarding them as “magical beasts we don’t understand and therefore cannot trust”, we’ll never get anywhere. Batteries are just another technology, a very advanced one but manageable in the right hands, which is why I’d rather lease one than own it. With regards to PBP, batteries are one of the pillars of their business, be damn sure they’re going to have quality control.
If you run out of fuel and get stranded nowadays, what happens? A town truck finds you and brings you more. It’s not inconceivable that there’d be an EV equivalent model, some sort of “emergency mobile swap/charge station”.
Lastly, People jockey for seats on a plane because their location affects their experience, not because one seat is inherently “better”. It’s always possible some people will be possessive of their ‘good’ battery, but really if they’re all tested and certified, what’s the big deal?
Reply