Shai Agassi has been pondering what it will take for electric vehicles to beat cheap gasoline-powered competitors. And he got some advice from former president Bill Clinton in 2006: giving away the car is a sure way to succeed.
Clinton offered this advice a year before Agassi launched Better Place, a company dedicated to powering EVs with swappable batteries and a subscription-based charging model. The company ousted Agassi in October and has pulled the plug on US and Australia operations, and is now focused solely on Israel and Denmark.
Writing over on LinkedIn, Agassi says he heard Clinton and current Israel president Shimon Peres speaking at a conference seven years ago. He approached Clinton and pitched his thoughts on converting Israel to electric mobility. At that time, Agassi was doing the numbers and figured he could sell an EV with a battery for about $32,000. He tried to convince Clinton that EV drivers would be saving enough money on what would have been spent on gasoline over eight-to-12 years to make purchasing a more expensive electric car economically sensible.
Clinton thought it was a waste of time. "By the time you will convince the rich folks in Israel to try it, then get the average folks in Israel to try it, then bring it to the US for our rich folks... the world will run out of time," Clinton reportedly said to Agassi.
Once that gasoline-engine car gets to about eight years old, it's going to be selling for less than $3,000, Clinton said. The EV has to be beat that price: "As a matter of fact, if you can give away your car for free, that's a sure way to succeed." Okay, that sounds good, but how do you give the EV away for free and still make money? "I don't know...you're the smart man around here," Clinton shot back before turning around and walking away.
It may sound strange, but Agassi sees Clinton's comment as the best business advice he's ever received. For Agassi, the comment wasn't really about selling the EV for free, but about finding a way to reduce the cost of the battery to, essentially, zero. It remains a compelling dream.