SHAI AGASSI DESCRIBES THE FUTURE OF PERSONALTRANSPORTATION (IF HE GETS HIS WAY)

While introducing Shai Agassi, the visionary founder and CEO of the most audacious battery electric vehicle (BEV) concept ever devised, moderator Brian Dumaine, global editor of Fortune Magazine, gave a quick overview of Better Place, Agassi’s enterprise.

The event was Fortune Magazine’s Fortune Brainstorm Green and the occasion was Agassi’s return to offer an update on Better Place since he talked about the project at the 2008 event.

A few years ago, Agassi saw that the future of personal transportation was battery electric. Seeing to the core of the matter, he realized it would be difficult if not impossible to sell such a vehicle if there were anxieties about the car’s driving range and battery endurance. Agassi decided that to sell a BEV he had to also build a system of charging stations on curbsides, in parking lots and garages in populous city settings.

The range of the current state-of-the-art lithium-ion battery technology is inadequate to satisfy drivers conditioned to the convenient, if costly, option of stopping every 200-to-250 miles and gassing up the tank. So Agassi decided to completely redesign his BEV to allow for switching out the battery pack as quickly and easily as a gas-powered car gets its tank filled. That made it necessary for Agassi to invent automated switching stations, where the 400-pound batteries could be rapidly exchanged.

When Agassi took the stage at the Fortune event, he summarized Dumaine’s introductory description of himself and his undertaking. “In other words, he’s nuts,” Agassi smiled.

From Already1have via YouTube.

Agassi began by talking about what Better Place has done since the 2008 appearance. They have added agreements with Denmark, Australia, the municipalities of the San Francisco Bay area, the state of Hawaii, the Canadian province of Ontario and Japan to their initial agreement with Israel. They have installed charging stations in Israel and Denmark, and begun construction on a prototype battery-switching station in Japan.

The question remains: Will this work? Nobody is a more fervent believer than Agassi.

His vision begins with his understanding of a BEV, or any vehicle, as part of a complete system, a piece in a supply chain. BEVs consume electrons for fuel. Internal combustion engine (ICE)-powered cars dependent on liquid fuels complete the chain with something unfortunate from the tailpipe.

To move the marketplace away from the supply chain that culminates with tailpipe spew, Agassi decided he had to (1) have the charging infrastructure in place before he could sell his car, he had to (2) separate worries about the battery from concerns about being able to resell the car and he had to (3) be able to sell the car in large enough volumes to make it as affordable as the cars with which consumers are familiar.

Emblematic Better Place charging stations. (click to enlarge)

Charging stations are not hard. Agassi’s passion makes him a great salesman. It should come as no surprise to anybody who has ever heard him talk that he already has 2 small countries installing the small stations and leaders in states and cities across the U.S. and around the world anxious to get started. Given the state of charging technology, these undertakings should qualify as shovel-ready projects.

More impressive is Agassi’s report of a prototype battery-switching unit now being built in Japan. Slides with the presentation show the 120-mile range battery-pack has been redesigned. It is nothing like the lithium-ion battery-pack in GM’s Chevy Volt. It is a wide flat “pancake” structure that will ride on the underside of the car between the axles. Switching it will be a simple matter of rolling the car over a bay, dropping the used pack down and bolting a fully-charged on in place.

Agassi says he has crews now performing 100-to-200 switches a day and they are doing them in under 5 minutes.

click to enlarge

Agassi quickly moved into some very concrete numbers about his undertaking. Component testing will be done this year. System-wide tests are scheduled for 2010. The mass market assault will be in 2011.

Talking about costs, he said it would cost $25 million to build a chain of battery-pack switching stations on Interstate 5 between Los Angeles and San Francisco and a billion dollars to build such a system from the Mexican border to the Canadian border. Accepting his calculation of 25 million drivers on that stretch of highway, the cost per driver comes to $40.

The dates and numbers are crucial to Agassi because Better Place is in a race against time and scale. The project, he readily acknowledges, will only work at large volumes. Volumes in the hundreds mean an added cost of $40,000 to each vehicle. Volumes in the tens of thousands bring the added cost down to $5,000 per car. When volumes reach the millions, the premium is $1,000 and the cost is competitive with ICEs. While some fancy, upscale BEV-makers might be thinking in terms of thousands or tens of thousands, Agassi is only interested in making millions of cars.

To Agassi, its e-miles versus g-miles. The many necessary parts of his BEV, described by Agassi as "consumer electronics," have been shown to be road-ready in experimental settings and are ready for mass marketing. Agassi expects the price of driving electric to be 8 cents/mile in 2011, 4 cents/mile in 2015 and 2 cents/mile, the quivalent of a 70-cents/gallon gas price, in 2020. At those prices, Agassi can reach his affordability goal. “If you’re willing to give me what you pay for gasoline, I’ll give you a free car.”

Ultimately, Agassi believes, the cars will be so affordable that he and others will focus on selling the electricity to charge them in monthly plans. This would evolve into something like cell phone plans, with drivers choosing variable subscriptions according to their travel needs.

From CNN Money.

The way to get there, Agassi says, is to follow China’s lead, create incentives big enough to bring the cost of electric vehicles and plug-in hybrid electric vehicles down to what they will be in 2020, to a level so low that the car buyer can only think, “Who would want to buy any other car?”

What Agassi is doing is not audacious to him. He says he is merely making the car he believes everybody is going to want in 2015.