Shai Agassi stood in a warehouse on the outskirts of Tel Aviv one afternoon last month and watched his battery-swapping robot go to work. He was conducting a demonstration of the curious machine that is central to his two-year-old clean-energy company, which is called Better Place. Agassi's grand plan is to kick-start the global adoption of electric cars by minimizing one of the biggest frustrations with the technology: the need for slow and frequent recharges. The robot is the key to his solution. Unlike most electric-car technologies, which generally require you to plug your car into a power source and recharge an onboard battery for hours, the Better Place robot is designed to reach under the chassis of an electric car, pluck its battery out and replace it with a new one, much the same way you'd put new batteries in a child's toy.
Agassi told me previously that his goal was five minutes or less for the whole process. "e;If we can't do this in less time than it takes to fill your gasoline tank,"e; he said, "e;we don't have a company."e;
On the day of the presentation, a group of investors and employees milled around, peering down with interest at the mechanism. The robot "e;” a squat platform that moves on four dinner-plate-size white wheels "e;” scuttled back and forth along a 20-foot-long set of metal rails. At one end of the rails, a huge blue battery, the size of a large suitcase, sat suspended in a frame. As we watched, the robot zipped up to the battery, made a nearly inaudible click, and pulled the battery downward. It ferried the battery over to the other end of the rails, dropped it off, picked up a new battery, hissed back over to the frame and, in one deft movement, snapped the new battery in the place of the old one. The total time: 45 seconds.
Agassi "e;” a 41-year-old Israeli-American with a piercing stare "e;” beamed. "e;Check this out,"e; he said, dragging me over and pointing at a set of thick two-inch metal hooks on the frame. The latches use the same technology as those used "e;to hold 500-pound bombs in place on bombers,"e; he explained. Designed to release bombs with millisecond precision, the technology is also perfectly suited to keeping batteries safely inside the cars, yet allowing them to be extracted in a blink. Agassi obviously enjoyed the swords-to-ploughshares imagery too.
Electric cars have long been a fetish object for environmentalists: electricity can be produced from wind, solar or nuclear sources with little or no CO2. But now even the auto industry seems to be taking the idea of the alt-car seriously. When the Big Three filed their restructuring plans earlier this year, all aggressively emphasized their intentions to begin producing electric vehicles and hybrids. General Motors has promised to begin selling its electric-powered Volt sedan next year. Toyota and other manufacturers have their own offerings as well.
Yet all these alternatives suffer from a common problem: refueling. The most advanced electric car currently for sale, the Tesla Roadster, runs for no more than 250 miles on a charge, and others can do only 50 miles or so; then they require two or more hours of plug-in time to recharge. The problem of refueling is so significant that fans of electric cars have a phrase for it: range anxiety, the nagging fear that you'll run out of juice before you can find a charge spot and be stranded at the side of the road. It is the major reason that most Americans, even as they cheer on the development of low- or no-emissions vehicles, are leery of actually buying one. And if people won't buy them, carmakers won't make them.
Agassi aims to solve this problem. Going country by country, his start-up firm has begun to construct what it hopes will ultimately be a worldwide network of millions of small-scale "e;charging spots,"e; parking-meter-like posts scattered around downtown areas and along highways. But crucially, he is also building roadside robotized battery-swap stations that provide fresh, fully charged batteries without having to wait hours for a charge. It's a dual system: on most days, his customers would charge their cars by plugging into a charge spot at home or at work; a long drive would entail pit stops every 100 miles or so for a battery swap. Agassi plans to make his money by buying electricity in bulk from solar arrays and wind farms and then reselling it to his customers.
The idea is a little odd, to say the least: a car with a replaceable battery? It is also extraordinarily bold, requiring carmakers to fundamentally rethink the way they build cars. But Agassi, a charismatic entrepreneur who walked away from one of the world's top software jobs, is "e;amazingly persuasive,"e; Shimon Peres, the president of Israel and an admirer of Agassi's, told me. In barely two years, Agassi has persuaded investors to contribute $400 million, and several countries and states "e;” including Israel, Denmark and Hawaii "e;” have offered him lucrative tax breaks. The French automaker Renault is spending $600 million over three years to develop a car with swappable batteries, to be released in 2011. In Israel, where Better Place has already installed hundreds of its signature blue car-charging stations, Agassi is credited with convincing the nation's jaded political class that they have an opportunity to actually wean their country off oil. But the question is whether he can convince the most important group of all: customers.
"e;Some people say I'm missing the fear gene,"e; Agassi mused when we first met in Tel Aviv in February, and I couldn't entirely tell if he was joking. Agassi has darkly brooding eyebrows and a square jaw, and carries himself with a granite self-confidence that is striking, even unsettling. When he came down from the hotel penthouse he was staying in "e;” he lives in California with his wife but travels to Israel often for business "e;” he greeted me in the lobby dressed in a sleek black suit with no tie. "e;He has very high self-esteem,"e; Idan Ofer, head of the Israel Corporation and Better Place's first big investor, told me. "e;He sees himself as a world-recognized figure."e;
At age 14, Agassi persuaded his father to buy him an Apple IIe by promising him 10 percent of his "e;lifetime profits"e; from writing software. It turned out to be an excellent deal: at age 21, the younger Agassi founded TopTier Software "e;” which made portals to help companies organize their internal information "e;” and sold it nine years later to the German software giant SAP for $400 million. SAP put him in charge of developing new software for Fortune 500 businesses.
"e;I've learned every industry in the world,"e; Agassi told me as we drank coffee in the hotel's business lounge. "e;One day, it would be Apple and Sony. The other day it would be BPand Chevron."e; By 2007, Agassi had built his division at SAP from zero sales to $2 billion annually, and he was being groomed to replace the C.E.O.
Agassi never regarded himself as a particularly ardent environmentalist. But in 2005, he attended a meeting of young global leaders at the World Economic Forum at Davos where they discussed the question "e;How would you make the world a better place?"e; After giving it some thought himself, he ultimately decided the answer was: By ending the world's addiction to oil, which would mean finally getting people to drive electric cars. Hybrids, he argued, were a half-measure. Alternative fuels like hydrogen or natural gas or bio fuels weren't going to be readily available anytime soon. Only electricity fit the bill. It is plentiful, already widely distributed and can be generated from extremely low- or zero-emissions sources like solar or wind farms.
The only way to get consumers to use electric cars, Agassi realized, was to solve the problem of refueling. That meant, to begin with, that some entrepreneur would have to build networks of recharging spots, going country by country. As he crunched the numbers, what really struck Agassi was how lucrative a business like this could be. Powering a car by electricity "e;” even relatively expensive "e;clean"e; energy like wind or solar "e;” costs far less than powering it by gasoline. The Tesla all-electric sedan, for example, uses about 1 cent of electricity per mile. A comparable gasoline car uses 16 cents of gasoline per mile. And with the United States market for automobile gas at roughly $275 billion, Agassi figured that a company controlling a world network of charging stations would become so profitable so quickly that it could subsidize its customers' electric cars, much the way mobile companies give out free phones to people who sign two-year contracts. The electric-car business, in fact, could function like the mobile-phone industry: you could pay, say, $10 for 1,000 miles, $20 for 3,000 miles, or perhaps a few hundred a month for unlimited driving.
"e;If I can give you miles in a more convenient, cheaper way than gasoline, you will take them,"e; Agassi says. "e;If your neighbor is driving an electric car and paying me only $30 a week for the electricity, you're going to buy an electric car, too. If I do it without killing your kids and the planet, then it won't even matter if it's cheaper or not; you will just do it."e;
In 2006 Agassi delivered a speech about his idea at the Saban Center for Middle East Policy, and then went back to his job at SAP. A week later, the phone rang; it was the gravelly voice of Shimon Peres. The Israeli president had been in the audience, and he practically commanded Agassi to quit SAP. "e;You have to do this thing,"e; Agassi remembers Peres telling him. "e;If you don't do this, why would anybody else do it?"e; Agassi also had another motive: SAP's existing C.E.O. had announced he was staying on for another two years, pushing back Agassi's possible ascension. He announced his resignation.
Within months, he had acquired crucial political and financial backing for Better Place. Peres's support helped; the president wanted Israel to be the company's first test market, and Peres began working as an icebreaker inside the government, getting skeptical politicians to begin designing tax incentives and cheap debt to finance the firm. "e;I convinced the ministers,"e; Peres said. "e;I helped him to break through."e; Peres also brokered an introduction to Carlos Ghosn, the C.E.O. of Renault-Nissan, who agreed to make the first cars with compatible batteries.
Agassi received his first investment "e;” $200 million from Israel Corporation, a firm that owns many oil refineries "e;” after a single conversation with the C.E.O., Idan Ofer. "e;He didn't have to sell the CO2 story,"e; Ofer told me. "e;Climate change is real. The CO2 equation has gone haywire. And coming from the oil business, I know that oil is becoming more and more difficult to find "e;” I mean, this planet, how much oil can you have?"e;
But Agassi realized he needed one more breakthrough: some way to rapidly charge a vehicle. No drivers, he knew, will tolerate a two-hour wait to recharge when they're on a 500-mile haul. Then one day, he and an automotive engineer were chewing over an impractical method for quickly replenishing batteries. The engineer wondered aloud: Wouldn't the fastest way to charge an electric car be to simply replace the battery?
It was, Agassi says, his "e;aha"e; moment. The auto industry's conceptual error, he says, is in regarding the battery as a built-in component of the car, like a gas tank. Instead, you could think of the battery as more analogous to gas itself "e;” an entity that goes in and out of a car as needed, owned not by the driver but by the company that sells you the fuel. Think of the problem that way, Agassi realized, and the recharging company could refill its customers' cars using battery technology and the existing electric grid without making any radical new technological innovations. The solution to electric cars lay not in re-engineering the battery but in re-engineering the car.
To get a sense of what it would be like to actually use the Better Place system, Tal Agassi "e;” Shai's 33-year-old brother, who works as his global manager for infrastructure "e;” took me for a drive around Tel Aviv in a Renault Megone, a luxury sedan that had been converted to run on electricity.
The car pulled into a parking lot that had been outfitted with Better Place's electric charging posts "e;” triangular columns that look a little like parking meters. Tal took a charging cord from the car's trunk; it was an inch thick and one end was topped by a nozzle that had several round, nubbly electric-socket prongs. One end plugged into the charging post; I took the other end, went to the car, flipped open a little flap and inserted the nozzle with a satisfying click. A blue Better Place logo began gently glowing on the meter, indicating that electricity was now flowing.
"e;We want to make the cord smaller and thinner, so it's more like a USB cord or a cord you use on your computer,"e; Tal said. "e;It's all about making people comfortable with the idea of using electricity in your car."e; Most customers, Agassi and Tal predict, will do the majority of their charging at home "e;” Better Place will include a charging cord free for any customer who signs a contract "e;” or while parked at work. They anticipate that their battery-swapping stations will be used for longer drives "e;” or in an "e;emergency,"e; like when someone forgot to charge up at home or needed to leave suddenly but hadn't finished charging. According to studies by the Bureau of Transportation Statistics, almost 80 percent of American commuters travel less than 40 miles a day to work and back. Range anxiety is, in a sense, more about psychology than practical reality. Even today's average electric cars, with a 50-mile range, can cover most daily driving easily.
Still, the anxiety can be hard to shake, as I discovered when we drove the Megone across Tel Aviv. When we started our journey, the battery stood at 90 percent; barely 15 minutes later, it was down to 75 percent. I found myself staring at the battery meter, realizing that if we kept up at this rate, we'd be risking a dead battery in another hour or so. That's another problem with electric cars: even if there are tons of charging spots, you still have to plan ahead.
In an attempt to quell this anxiety, Better Place has designed software that effectively does the thinking on behalf of the customer "e;” providing directions to the nearest recharge location whenever the need arises. I headed back to the Better Place offices, where I met Barak Hershkovitz, a former doctor who is designing the in-car software. Turning on a modified G.P.S. device, Hershkovitz picked a route that a driver might select "e;” from, say, Tel Aviv to a town nearby. The device displayed the location of every charge spot and battery-swapping station along the way. With the G.P.S. mounted in your car, the computer would determine whether you could make your drive without charging; if you needed a swap, it would guide you to the most convenient swap station. When you parked to plug in, the system would tell you how full your battery will be depending on how long you charge. Hershkovitz showed me a virtual example. His on-screen car drove up a charging spot with a battery 49 percent full. The system told him that if he plugged in for one hour while shopping, it would rise to 66 percent. Another half-hour would get him to 79 percent.
"e;Now let's go to Sderot,"e; he said, picking as his next destination the embattled Israeli city on the border of Gaza. "e;It's a town which is under rocket attacks. Let's say that I'm afraid to park there, so I'm not going to charge."e; The system quickly identified two places where he could swap batteries along the highway leading to and from Sderot, so he could drive the entire 100-mile journey there and back without needing to park and charge.
"e;Electric vehicles are software-driven vehicles,"e; Alan Salzman, Agassi's main American investor, told me. In his view, this makes Agassi "e;” who spent years designing precisely this type of complex software for mobile-phone and courier firms "e;” well suited for the job. "e;You need a software-industry guy,"e; Salzman added. "e;He's the Steve Jobs of clean energy."e;
It is an apt comparison, perhaps even more so than Salzman intended. The automobile is going through a transition quite similar to the computer industry of the early 1980s, when nobody knew which company was going to dominate "e;” Microsoft or Apple? I.B.M. or Wang? "e;” and a company needed a talented pitchman like Jobs to make a compelling case for its own model.
The race to produce alternative-fuel cars is certainly confusing to consumers, because automakers are pursuing five or six different options. Many are planning to produce hybrids like the Toyota Prius, which includes a regular gasoline engine and an electric motor. In hybrids, an electric motor starts the car moving from a standing stop, saving precious gasoline, and the batteries charge whenever the car brakes. But a hybrid typically can drive only a short distance on electric power alone, so it improves the gasoline fuel economy by perhaps only 30 percent. A more ambitious alternative is the plug-in hybrid, which contains an additional battery and can be plugged in to get the charge as high as possible. These cars can drive for longer on pure electricity "e;” Toyota's plug-in Prius, due out next winter, runs for at least 10 miles at highway speed, but eventually the gas engine needs to take over.
Electric cars, meanwhile, are coming in a variety of formats. Some are all-electric, like the Tesla Roadster. But other vehicles are not. The Chevrolet Volt, due out next year, runs for 40 miles on its batteries, and after the batteries die, a small gasoline engine under the hood turns on, powering a turbine that generates more electricity to drive the car. This "e;range extender,"e; as it is called, may become a common feature in the coming wave of electric cars, because it solves range anxiety in a way that is elegant, if not emission-free: if you can't find a place to plug in, you can just gas up.
Perhaps the most ambitious cars are those that are powered by alternative-energy fuel-cells that take hydrogen and convert it to electricity to drive the car's motor, producing only a trickle of water as a byproduct. But hydrogen is not widely available. Last summer, Honda began releasing its fuel-cell Clarity "e;” but will do so only in small numbers (150 cars). And the only U.S. market for it is in California, where hydrogen can be bought in a handful of stations.
So where does Agassi's Better Place fit into this electric universe? Because Agassi plans to buy only "e;clean"e; electricity, from wind and solar farms, Better Place customers will be, in theory, producing nearly zero emissions. But Agassi requires the cooperation of automakers. To use the charging spots, the electric ports on any car must be designed to work with the Better Place nozzle (or include an adapter); to reap the benefits of Agassi's battery-swapping stations, the entire car must be built so the battery can be removed from beneath. This is a serious engineering challenge: the batteries in electric cars can weigh hundreds of pounds.
No carmakers other than Renault have announced plans to design cars to suit Agassi's grid. Sue Cischke, Ford's group vice president for Sustainability, Environment and Safety Engineering, told me that she found Better Place's battery-swapping "e;an interesting concept."e; She continued: "e;It solves this range-anxiety problem, and it's also a way to solve this problem of battery cost."e; But it requires carmakers to all agree to design cars around one standard-size battery bay. Cischke says she thinks it's too early to settle upon a single battery standard, because battery technology is still advancing, producing new potential styles of battery each year. "e;It's, in my mind, going to be a long time before we ever standardize the batteries,"e; she said. "e;The chemistry is still changing, and it's still a developing technology rather than a mature technology."e; Designing a car takes at least one year and often several; making the wrong call on a standardized battery could be economically fatal for a carmaker.
When I talked to John Hanson, Toyota's manager of environmental communications, he was candid about the problems that automakers have shifting to new models and new fuel structures. That's why his company is beginning with such a tiny run of plug-in hybrids.
"e;There is no market,"e; he said, for electric cars, hydrogen fuel cells or even plug-in hybrids. "e;People say, "e;˜If you build it they will buy it,' but we don't know. Can we sell these in significant volume? Significant volume is important so that the manufacturer can make a profit, and you need significant volume if you're going to have a positive effect on the environment. What good does it do if we only sell 500 a year? We sell 175,000 Priuses alone in North America. Those are the kind of volumes you need to have to make an impact on the environment. You cannot expect manufacturers to do this at a loss; there has to be a response by the market. So not only are we being asked to invest in a technology and bring it to market; we're being asked to create a market that doesn't exist yet."e;
Agassi regards the various gasoline-based "e;range extenders"e; in electric cars with undisguised contempt. Indeed, he regards cars that rely on any oil at all with a certain amount of derision "e;” not merely because they cause greenhouse gases, but because from his perspective, oil simply isn't a very efficient way to store energy. To Agassi, it is enormously wasteful both in terms of physics and of economics. Far better to simply trap the sun's energy with solar arrays "e;” or wind, which is generated by the uneven heating of the earth by the sun "e;” and put it directly into a car's batteries.
"e;You always have to start with the science,"e; Agassi says, riding shotgun in his sister's hybrid. "e;There's nothing better than taking a photon, converting it to an electron and converting that to motion. Physicswise, you can't beat that. The rules of energy conservation say that the minute you turn energy into a molecule"e; "e;” into oil "e;” "e;you've lost.
"e;Everybody says we have an energy-dependency problem,"e; he continues. "e;It's not true. We have an oil-dependency problem. We can't make oil. But all the rest of the energy we know how to make. Seriously. We know how to make it."e; He was working himself up into a intense, nerdy lecture. Agassi is an extremely charming guy; he has the born salesman's ability read people and connect with them. But he also has the obdurate quality I've seen in so many people who are drawn to computer programming and logical thinking. Once Agassi has convinced himself of the optimal solution to a problem, he develops a nearly pathological monomania about it, disgorging encyclopedic data to buttress his points. As we drove, he delivered a passionate disquisition on the superior physics of solar energy.
How much total solar energy, I idly wondered, hits the earth every day?
To my amazement, he fired back instantly with a figure precise to the terawatt. "e;By the way,"e; he added, "e;that's just the land surface."e;
Agassi does not appear to be worried that the automakers aren't lining up behind him. He argues that he doesn't need them: Renault's commitment alone, he expects, can produce enough cars for the 25 million potential customers of the grids he is laying out in Israel, Denmark and Hawaii, his first test markets. Renault has not announced how many cars it will produce, though Olivier Floc'hic, a spokesman, told me that the company "e;intends to arrive on the market massively in 2011. It's going to be about global volumes. We're not talking about niche."e; By 2015, he added, the company plans for between 10 and 15 percent of its annual production to be electric.
The small size of Agassi's test markets is also an advantage. Anders Eldrup, the C.E.O. of Dong Energy "e;” the Danish firm that will sell its wind-farmed electricity to Better Place "e;” suspects the country would need no more than 150 swapping stations nationwide. If all goes well, Agassi figures he and Renault will make enough money that competitor automakers will quickly follow. And there's the potential of moving into China, where electric cars are expected to sell briskly to an emerging middle class that has never owned a car and thus is presumably less conditioned to feel range anxiety.
But the United States's market will be much harder to crack. "e;Covering the United States with battery-swap is hard,"e; says Richard Lowenthal, the founder of Coulomb Technologies, a rival firm that is creating its own network of electric-car-charging stations, beginning with San Francisco and San Jose. In densely populated regions, Better Place's model "e;could work really well,"e; he says. "e;But in the United States, we've got a lot of places where people don't go very often. I'm thinking of Montana."e;
The problem is ultimately political. Everyone agrees that the government will have to spend a lot to create enough demand for alternative-fuel cars. Automakers want subsidies to offset the cost of developing them; consumers want subsidies to buy them; and people who are building electric charging networks "e;” like Lowenthal and Agassi "e;” are straightforward about the fact that they, too, need government money. "e;I don't need a government handout forever,"e; Agassi says. "e;But we do need something for, say, two years, until there are enough electric cars on the road to make a viable market."e;
Agassi was pleased to learn that Obama's stimulus package included $2.4 billion in development grants for electric cars and plug-in electric hybrids, as well as tax credits for customers and $300 million for state and local governments to buy electric vehicles. But even all that money would put only an estimated 600,000 electric vehicles on the road "e;” close to 2 percent of the U.S.'s 251-million-vehicle fleet. A recent report by the Boston Consulting Group argued that for 1.5 million electric cars to be on the road in the U.S., Europe and Japan by 2020, it would require $49 billion to develop the cars and batteries and $21 billion to build charging networks. It is possible that some of this money will come from Better Place's profits. But Agassi cannot do it alone. He has figured out a way to get the electric car rolling. It just needs a little push.