All-Electric Cars Require New Business Model
Thursday, January 15, 2009 3:23 PM
When the price of gas soared to $4 a gallon, you probably started noticing more hybrids on the road.
But what about all-electric vehicles? Do they have much of a future?
Back in 1900, 25 percent of all cars made in the United States ran exclusively on electricity. But Henry Ford's Model T quickly muscled its way out front - and gas-powered cars became the norm.
Entrepreneur Shai Agassi, the 40-year-old former president of software company SAP, says electric cars have a future. He's started a company called Better Place, and his plans are grand: to ignite the electric-auto industry by developing the infrastructure from ground zero - cars, recharging stations and more.
"We looked at it from the perspective of how to run an entire country without oil. You've got to put the infrastructure ahead of the cars. In our case, the infrastructure is a combination of a massive amount of charge spots and the ability to switch batteries in less time than it takes to fill up with gasoline," he told Newsweek recently.
Agassi says a new business model is needed to make the all-electric car work. Drivers would buy a commute by miles, signing a contract that rewards discounts based on the length of the contract.
"The car and the battery - ownership-wise, have to be separated...We say, you never buy the battery. What you buy is the car. You buy the commute by miles, and commute miles include the battery, the electricity, access to the network and battery-switching," he explains.
He hopes to have mass-market access in Israel and Denmark by 2011. But even in widespread areas in this country - such as the Midwest or California or Texas - Agassi isn't daunted.
He says to imagine a 100-mile circle around San Francisco, Sacramento, Los Angeles and San Diego. Three freeways connect those northern and southern cities.
"On those cities, if you put switch stations at a distance of about 30 miles from one another, you would have full coverage across the entire state, which is effectively the most prolific car state in the nation," says Agassi.
As far as mass transit, there are two types of electric buses: the trolley bus powered by two overhead electric wires; and the on-board, stored-electricity bus. 
China is developing a new form of electric bus, using power stored in large on-board electric double-layer capacitors. These are rapidly recharged when the electric bus stops at a bus stop and fully charged in the terminus. In 2006, two commercial bus routes using electric double-layer capacitor buses were launched, one of them in Shanghai, pictured on the right.
Electric Fuel Corporation is working on a 40-foot, totally electric bus, using pre-commercial battery technology.
Adelaide, Australia, boosts the Tindo, an all-electric bus whose electricity comes from a solar PV system on Adelaide's central bus station.