A Better Place for the Electric Car

Jan. 1, 2009— -- My guess is that most readers of this column would prefer to be in a better place.

It's been a tough year in so many ways that one can't help but hope for some small improvements in something, presumably economic, in the new year ahead.

And in the spirit of finishing one year and starting another, regardless of the challenges we face, it seems appropriate to write about an audacious Silicon Valley start-up with some very big, very hopeful plans.

Odds are not in their favor -- actually, odds aren't really ever in any start-up's favor -- but if it works, and clearly some do, the rewards could be tremendous.

The company is called Better Place.

Better Place has a couple of notable long-term goals: an oil-free world, a healthy planet and an environment and economy that work in balance to boost, rather than conflict with, each other.

Well, why not dream big? Admittedly, reading the plan at first made me wonder why they left curing the common cold and ending bad hair days off the list of projects.

However, on further examination, Better Place is a lot less crazy than it sounds.

Beyond the Electric Car

The core of the business -- the design and production of highly energy-efficient cars -- has already been proven viable by competitors like Tesla. The alternative auto manufacturer already has cars in the showroom and on the road.

The debate about the best approach -- hybrids, hydrogen or lithium ion batteries (the choice of both Better Place and Tesla) -- will likely rage on for some time.

But as in all things, competition will likely serve to make all of the options better, cheaper and faster.

Better Place's plan goes way beyond building an electric car to address the obvious concerns associated with them: How far does it go on a charge? And what happens when the batteries run low?

The business plan calls for the development of an infrastructure of charging spots and battery switching stations.

Charging Cars Like Charging Cell Phones

Charging spots, sized like parking meters and available in public garages and shopping mall parking lots, will be used to keep the batteries charged at their theoretical distance capacity of 100 miles.

At night, owners will simply plug into the garage outlet (much as many of us habitually plug in our cell phones), alleviating the need for "refilling" stops for most around-the-town or to-the-office trips.

However, should an owner choose to use a Better Place vehicle for a longer trip, battery changing stations, fully automated as currently envisioned, will be the better option.

As the plan goes, drivers will pull in, sit in their cars and watch the swap happen, much the way that an automatic car wash works today.

Test Phases in the U.S. and Abroad

Now, before you guffaw at this admittedly grandiose dream, note that in late December, the city of San Jose, Calif., launched a test of the concept by installing electric vehicle charging stations in front of City Hall.

The plan will give both manufacturers and municipalities an opportunity to see how the stations actually work in the field. And San Jose isn't alone. According to Coulomb Technologies Inc., the manufacturer of the charging stations, another customer has ordered 40 stations to be tested along major California highways in 2009.

Better Place isn't attempting to go it alone. The plan is to foster an ecosystem of contributors, including component manufacturers, showrooms and service stations.

The key will be building a critical mass of owners to give the infrastructure partners incentive to swing into action.

Challenging? Absolutely.

But then again, the cell phone industry certainly pulled it off. And just like that business, Better Place's business plan calls for owners to pay for their power use on a subscription plan, either on a monthly and/or by-use basis.

In addition to those already mentioned, Better Place has announced agreements with behemoths Nisson and NEC, as well as groups in Israel, Australia and Denmark.

Most of the conversations are at a very early stage but are still evidence that this wild idea has inspired many.

It's easy to be skeptical of such an immense plan; there are myriad reasons why and how Better Place might never be more than a venture capital sinkhole.

Then again, it's also possible that the grand plan, in some form, could come to fruition.

Invoking the old cliché: nothing ventured, nothing gained, Better Place and its backers are swinging for the fences. What a grand slam for all of us if it works. Happy New Year.

Lise Buyer, a longtime Silicon Valley investor, is a principal at the Class V Group, www.classvgroup.com.