Thinking through the Better Place strategy: is it seriously flawed?
by Sebastian Blanco on May 22nd 2009 at 4:32PM 
Project Better Place battery swap - Click above for a hi-res image gallery
Last week, Better Place previewed for a wide audience, via a new video, their battery swapping system. The video has kicked off a good discussion over on Peak Oil Garage that we wanted to share with you. The biggest question raised, I think, is about the batteries that Better Place will use. As we all know, battery technology - while not so advanced that we're all driving 400-mile range EVs - moves quickly. How does this affect Better Place's financial model? They pretty much have to invest in a lot of Gen 1 batteries, because each station will need a fair share of fully-charged packs for the cars that come in for service. But when does Gen 2 kick in? Will Better Place be able to recycle the packs into the newer types? What will that cost?
Another major question relates to the long-term plan. One way to cut down on the number of packs any individual station needs is to make the stations be able to quick-charge the packs. But, the more you overcome the technological hurdles to quick-charging, the less you need to swap batteries.
The original post on Peak Oil Garage says, "Much like hydrogen, the more you look at Project Better Place, the worse it appears." Whaddya think?
Gallery: Better Place battery swap station
[Source: Peak Oil Garage]
Reader Comments (Page 1 of 4)
augustus 4:58PM (5/22/2009)
IMHO it is flawed. I don't think it could store enough batteries to deal with more than one car, I think it recharges too slowly, I don't think people would want to swap out "their" batteries, I don't think you could build enough of these stations to cover enough area, I heavily doubt know that manufacturers would support a common battery shape/size.
My 2c.
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Snoopy 6:25PM (5/22/2009)
Hey augustus,
For your consideration:
1. Under the Better Place model, you wouldn't own the battery in your car anyway.
2. To think that there would only be one battery per charge station is, simply put, foolish. Sorry. It is, and you know it. There will be far more than one and, likely, more than 50 per station. They haven't said much about how they will store the batteries yet, but there are a number of options available to them.
If they implement the right system, they could probably store 100 or more batteries per station in the same area that fuel tanks at gas stations take up. To me, the best system is the "robotic garage" model. Batteries would be stored underground in the same fashion cars are stored in automated parking garages (http://www.youtube.com/watch?v=twaM9ZnoQEY or http://www.youtube.com/watch?v=EJcWrAcgxc0&feature=related), but on a smaller scale and with automated charging.
3. They're already working with countries, provinces and states around the world to build the charging and battery swapping infrastructure. So yes, they can cover the necessary area (which, by the way, is mainly highways, because people won't need to swap batteries unless they're driving longer than their regular trips).
4. The manufacturer thing is a valid point. With Renault-Nissan on board already, they've made some good progress, but they are also working to get more manufacturers involved.
310a4c14 8:36PM (5/22/2009)
Hey augustus
What is the problem of doing some reading FIRST before posting stuff that doesn't make sense. How about you go back read about Better Place and then come back and say something useful. This doesn't mean that I believe the battery swapping station is the way to go. But as my grand dad always used to say: Read first and then talk!
JH 5:47PM (5/23/2009)
I agree ... and agree with "the more you look at it, the worse it looks" summary.
Electric cars actually have a usability advantage over gasoline because, when your car is low on fuel, you can charge it almost anywhere there's electricity, not have to find a gas station. Of course, there are a lot of gas stations, but not so many as there are electrical outlets.
This will require a change in the way people think, and some very minor changes in infrastructure (i.e., extension cords in the parking lot at work), but really isn't that difficult. In 10 years we've all adapted to carrying our phones around with us instead of having different phone numbers at home and work, phone booths, answering machines, pagers etc. People will quickly and naturally adapt their lifestyle if there's a boost in convenience.
For the rare "long road trip" problem, there are other potential solutions ... i.e. just rent an extra battery pack from Hertz, it goes in the trunk and gives you 8-hour range, and you recharge or swap it out. Or, stop at McDs for a burger, and the 30 minutes you're there charging gets you 2 hours longer range -- you would have spent 10 minutes filling up at a gas station anyway. Or, maybe you can rent a small gas or hydrogen generator that makes your electric car into a temporary self-charging hybrid. That pretty much covers anybody who's not a long-haul trucker. And it's impossible to be stranded, because unless you're crossing Wyoming, there's electricity everywhere.
Maybe that doesn't sound too different to you from what Better Place is suggesting, but it really is. Swappable primary battery packs is a solution looking for a problem, and the amount of standardization and ubiquitous battery-swapping locations it would require is unworkable and unnecessary.
Dude 5:03PM (5/22/2009)
For BP to work it requires a standard battery be addopted throughout the automotive market. Either that or everyone buying their car.
All and all the automotive manufacturers would give design control over to BP. Conveniently enough BP will corner the market and become the only game in town. Let's be serious, it will never happen.
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Chris H. 5:04PM (5/22/2009)
I was under the impression that BP would not own the batteries, that they would just provide the charging infrastructure & administrate the customer contracts. Is that wrong?
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Chris M 10:49PM (5/22/2009)
Yes. Project Better Place has 3 parts:
1. Leasing the battery packs to customers, so the initial purchase cost of the car would be less. PBP is even considering a leasing model that covered the purchase cost of the car itself, sort of like getting a free cell phone for signing up for cellular service.
2. Battery swap stations, to swap the batteries leased to customers. In most cases, it would be customers willing to pay a bit extra for quick (under 2 minute!) swaps for long distance travel. It would also cover the rare case of swapping out a defective battery.
3. Charging stations to recharge batteries. For local driving, batteries would be recharged rather than swapped, it is far more convenient to recharge at home and at "park and charge" lots at stores and other businesses.
Chris H. 5:13PM (5/22/2009)
One misconception that many people have about the BP model is that EV owners would need to swap battery packs as often as ICE vehicles need to get gas. Keep in mind that for most people with BP cars, swapping the battery might only happen a few times per year, not every week. Most of the time the cars would charge up at home, or at BP parking spaces. Battery swapping would only need to occur on continuous long distance trips.
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augustus 5:18PM (5/22/2009)
This only works if batteries do not degrade over time. Otherwise casual EV users would not want to swap their batteries for fear of getting a more used battery. Heavy EV users would want to swap to get a newer battery.
And the batteries are going to degrade over time. All batteries do this. The worse the batteries degrade, the less usable they are (i'd love to see some stats on how much of an issue this is for the Volt/Tesla vehicles).
paulwesterberg 5:26PM (5/22/2009)
That is still a lot of swapping stations... if you figure that the car range will be somewhat limited by a small battery to keep costs low - approx 100 miles, then they need swap stations at least every 50 miles.
46,876 miles of interstate / 50 miles between stations = 937.52 stations.
This could probably be reduced by 30% by strategically locating swapping stations near interstate intersections.
That leaves rural areas out of luck, but only 20% of the US population is rural so they will probably ignore those harder to reach portions of the country.
paulwesterberg 5:41PM (5/22/2009)
@augustus
This is less of an issue for tesla because they have a huge battery and their management system spreads the charge/discharge loads.
The volt also has this problem, but they solve it by starting with a slightly oversized battery pack and kicking in the range extender well before the battery is fully depleted.
My guess is that the tesla pack lasts much longer, but the volt pack is cheaper to replace.
Over time the cost for replacement will come down, the small 1.3kWh pack in the prius used to cost 5k to replace, now it costs less than 2.5k. This is due to many units being produced over a long product cycle since 2004.
polo 11:18PM (5/22/2009)
"augustus: This only works if batteries do not degrade over time. Otherwise casual EV users would not want to swap their batteries for fear of getting a more used battery. Heavy EV users would want to swap to get a newer battery."
Why would they care? They don't own the battery, and any swapped battery would be tested to ensure quality. Its not like if someone swaps for another battery their car suddenly won't go as far on a charge. Many people would like this precisely because it guarantees their battery.
paulwesterberg 5:14PM (5/22/2009)
The Good:
standardized battery pack form factor and volages
electric cars with reduced up front costs make them cost compeditive with gas cars
reduced pollution
Problems:
Good luck getting all car manufacturers to agree to or follow battery pack standards.
So far only renault has agreed to make compatible vehicles.
Good luck getting a fully charged battery swapped in during heavy travel times like 4th of july, thanksgiving, christmas, labor day, memorial day.
The Bad:
Replaced oil companies monopoly with "cell phone" like monopoly
Money saved by not buying gas is still spent funding bp - no savings for using electric.
You need to have a battery swapping station everywhere there is currently a gas station - huge up front capital costs.
As batteries get better you need less of those expensive swapping stations you just spent a lot of money on.
A monthly fee for "miles" means there is no incentive to travel less - especially if your "miles" will expire. Overage costs may mean that people have to sign up for a long range plan even though they rarely drive long distances.
BP will let you charge in your home, and wants to include green electricity in your monthly fee but who cares? You dont need BP to charge in your home or to buy green power.
BP is best suited to small geographical regions like islands where oil dependence costs are high and only a limited number of swapping stations would be needed. But small geographical regions are more likely to be well served by traditional BEVs, swapping not necessary.
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augustus 5:20PM (5/22/2009)
I agree, I just don't see it happening. As for the good point, I don't think you can standardize on a battery until you standardize on an EV range. Some people want to go 10 miles in EV mode, some 40, some 200. EVs should have different sizes and capacities so that consumers can choose.
paulwesterberg 5:50PM (5/22/2009)
@augustus
They could standardize the modules in the pack so each module would have 10-25 miles of range. Make them so they can be stacked or connected to form larger pack configurations. As long as the voltage form factor were the same you could more easily supply a range of vehicles.
Chris M 11:16PM (5/22/2009)
It is too soon to say exactly what the costs will be, but PBP has already stated that their goal is to undercut the cost of driving a gasoline car by a substantial margin. Admittedly, the "monopoly" problem is worrisome, but we dealt with the natural monopolies in electrical and phone utilities by regulating rates, and that works fairly well. It might be a good idea to bring the "swappable battery lease" monopoly under regulation as well.
PBP would only need battery swap stations along major inter-city highways plus a few to serve major cities, most of the time batteries would be recharged, not swapped. We could get away with far fewer gas stations if everyone could top off their gas tanks at home and only visited the gas stations when on long trips!
If it was a flat monthly fee regardless of miles, then there would indeed be no incentive to conserve. However, it is likely that PBP is planning a fee structure with a mileage cost, just as most cell phones have a "per minute" cost. Alternatively, they might base the fee on how much electricity was used, that would more accurately reflect both the cost of providing electricity and the actual wear and tear on the battery.
paulwesterberg 12:16PM (5/23/2009)
BP doesn't want to directly charge on a usage basis because then people will look at what they usually pay for electricity and compare it to BP and feel like they are getting ripped off.
Vytautas 5:16PM (5/22/2009)
As BP states they will own battery.
1. Car will be cheaper at the moment you bay it.
2. You will cover all battery price later, when you will buy miles from them.
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Nick P. 5:58PM (5/22/2009)
Better Place's business model is based on getting governments and car companies to cooperate to reduce oil dependency. This is not a plan for America, but for the rest of the world where people actually buy small cars and use public transportation to help preserve the environment.
They prefer to focus on the infrastructure needed to support electric cars instead of building them and are starting with small countries like Israel and Denmark, where the impact will be greater. Other companies will follow this model if there is money to be made. In fact, nothing would stop a company like Avis to operate their own charging stations alongside an electric car rental operation.
Business-wise, they have so far raised more than 400 millions, which is more than Tesla and Fisker together, so don't count them as failures yet. The Renault-Nissan group is quite strong in Europe, Japan and the middle east, so they are ideal partners. Even if their business plan doesn't work exactly as planned, they can adapt it to fit each country. If oil companies can partner with Hugo Chavez and African dictators, Better Places can do the same with most western countries.
Don't look at this from an American-centric view (where "renting" is a bad word and distances are huge between major cities) but rather an a "for profit" social enterprise for more socialized countries.
Can't wait for them to come to Canada...
- Nick -
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Snoopy 2:47PM (5/25/2009)
Hey Nick,
Don't forget. The government of Ontario has already signed on with Better Place (http://www.betterplace.com/global-progress/canada/).