SeekerBlog

The idea, said Shai Agassi, 39, the software entrepreneur behind the new company, is to sell electric car transportation on the model of the cellphone. Purchasers get subsidized hardware — the car — and pay a monthly fee for expected mileage, like minutes on a cellphone plan, eliminating concerns about the fluctuating price of gasoline.

Early days, but an interesting approach — it’s much easier to switch consumers into an electric at half the price of a gasoline-powered alternative [Renault to offer the subsidized cars]. If they make the 124 mile range target that will be a breakthrough:

On Monday, the Israeli government will announce its support for a broad effort to promote the use of electric cars, embracing a joint venture between an American-Israeli entrepreneur and Renault and its partner, Nissan Motor Company.

Prime Minister Ehud Olmert, with the active support of President Shimon Peres, intends to make Israel a laboratory to test the practicality of an environmentally clean electric car. The state will offer tax incentives to purchasers, and the new company, with a $200 million investment to start, will begin construction of facilities to recharge the cars and replace empty batteries quickly.

…

Mr. Agassi and his investors are convinced that the cost of running such a car will be significantly cheaper than a model using gasoline (currently $6.28 a gallon here.)

“With $100 a barrel oil, we’ve crossed a historic threshold where electricity and batteries provide a cheaper alternative for consumers,” Mr. Agassi said. “You buy a car to go an infinite distance, and we need to create the same feeling for an electric car — that you can fill it up when you stop or sleep and go an infinite distance.”

Mr. Agassi’s company, Project Better Place of Palo Alto, Calif., will provide the lithium-ion batteries, which will be able to go 124 miles per charge, and the infrastructure necessary to keep the cars going — whether parking meter-like plugs on city streets or service stations along highways, where, in a structure like a car wash, exhausted batteries will be removed and fresh ones inserted.

…Renault will offer a small number of electric models of existing vehicles, like the Megane sedan, at prices roughly comparable to gasoline models. The batteries will come from Mr. Agassi. The tax breaks for “clean” electric vehicles, which Israel promises to keep until at least 2015, will make the cars cheaper to consumers than gasoline-engine cars. “You’ll be able to get a nice, high-end car at a price roughly half that of the gasoline model today,” Mr. Agassi said.

…“Because the price of gasoline fluctuates so much during the life of a car, it’s hard to predict the cost basis for driving,” Mr. Agassi said. “But electricity fluctuates less, and you can buy it in advance, so I can give you a guaranteed price per mile, cheaper than the price of gas today.”

Mr. Agassi predicts that a few thousand electric cars will be on Israeli roads in 2009 and 100,000 by the end of 2010; Israel has two million cars on the road, and about 10 percent are replaced each year.

Mr. Agassi suggested this model for the electric car — concentrating on infrastructure rather than on car production — at a 2006 meeting of the Saban Forum of the Brookings Institution, which Mr. Peres attended. He was enthralled by the idea.

I wonder what the total cost to the Israeli taxpayer will be — for the subsidies and tax credits?

<more>