Savings Will Lure Americans To Electric Cars

The company Better Place is developing recharging stations for electric cars in Israel, Denmark and Australia. The head of the company Shai Agassi tells Steve Inskeep says the savings for drivers will convert them to electric cars.

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STEVE INSKEEP, host:

So that's how works in Israel. We called up the founder of Better Place, Shai Agassi, to ask about his dreams of expansion.

What are the challenges as you try to expand from Israel, which is a small country where anybody's drive would be a relatively short drive, and it's not a very large population - you can cover that? Switch from that to trying to spread across the United States, where you've got experiments on the way, in limited places, but the wide distances of the U.S. would seem to be a great challenge here.

Mr. SHAI AGASSI (Founder, Better Place): Yeah, that was the one item that everybody threw at us from the beginning. Israel's small. We did - Israel and Denmark were the first two countries. And then we picked - on purpose we picked a third country which was a bigger island, you could call that, which was Australia.

(Soundbite of laughter)

And when you actually look at Melbourne all the way Brisbane - Melbourne, Sydney and Brisbane with Cambria in the middle - you realize that's as long as the entire West Coast of the United States. And once you can do the southeast coast of Australia, you can do the West Coast. You can do the East Coast of the United States. You can cover the entire country.

The cost of infrastructure to cover the entire United States with enough coverage for everybody to drive from anywhere-to-anywhere, would be in the range of about $8 billion, which is the equivalence of seven days of gasoline used by the drivers today in the country.

INSKEEP: You're saying $8 billion, that's the investment you would need if your charging stations and other infrastructures were to be all across the United States - available across the United States.

Mr. AGASSI: That's right. We use $1.2 billion to drive today. We buy $1.2 billion worth of miles, if you want, in the form of gallons and gas stations. Take seven days of that, you get $8 billion. And we can put a switch station to cover the entire country. Everywhere you would go, you would have corridors where you'll be able to drive an electric car from one corner to another corner of the country.

INSKEEP: Im glad you mentioned Australia, because you've got a vast desert, vast deserts in the middle of Australia. I think that if somebody handed me one of your cars and Im not familiar with it, I'd be happy to drive it around Sydney. But I'd get nervous when I was going to point that car out over the desert and wonder whats going to happen.

Mr. AGASSI: You have to remember, we, most of us will still have a range extension mechanism called the other car.

(Soundbite of laughter)

Mr. AGASSI: The households in America have, today, almost two cars per household. So even if you put 150 million electric cars on the road, you'd still have the older cars still there if you want to do a road trip into the middle of New Mexico, and just see how it feels in the American desert.

INSKEEP: What do you need from the government to make this work?

Mr. AGASSI: We think that in the context of the U.S., there is already a subsidy, $7,500.00 subsidy on electric cars. If that subsidy is extended beyond the first 200,000 cars, which is what the law stipulates today, I think most of the work has already been done.

I think that if the government has looked at this project as a massive infrastructure and energy project, the like of a Hoover dam, this could be our project - an $8 billion stimulus package, if you want, to get off of oil.

INSKEEP: Your hope is not that that $8 billion gets handed directly to your company, but that people get subsities to buy the cars, to install the charging stations and that sort of thing.

Mr. AGASSI: I think if we looked at the three components, the ABC automobiles' batteries and charging networks, we have two allocate funds to all three in order to get away from oil. We've put a big fund, $25 billion of greening the car industry. We put big funds, about two and a half billion dollars in to batteries. We haven't put the fine yet into that charging network. And without the charging network - it's the missing link - you won't be able to connect the grid to the car. It doesn't matter if you have batteries and cars.

INSKEEP: Let me ask one other thing and it has to do with the economy of scale. I assume if you sell five of these cars in the United States, you're not going to make a profit. If you sell 5000, you're not going to make a profit. How many cars and how many charging stations do you have to have up and running, before this is a profitable business model that can stand on its own?

Mr. AGASSI: So Ill give you the answer for Israel 'cause I know it by heart. And then you can think of Israel as the cell and multiply it by about 70 to a hundred. The network in Israel will cost between $150 million and $200 million. It has capacity to take about 150,000 cars. We break even on the 25,000th car.

INSKEEP: Im trying to do some math in my head. I may get this a little wrong. But if we multiply that out for the United States, if the numbers are about the same for the United States, it sounds like you need to get 1.5 to 2 million cars on the road in the United States.

Mr. AGASSI: Which is sub one percent, so it's under one percent of the population and you already break even. If you get to 10 percent, which we will get to 10 percent of new sales in Israel by year-two. If you get to 10 percent in the year-two, or three, or four in the U.S., it's one of the most profitable companies in the country.

INSKEEP: Shia Agassi is the head of the company Better Place.

Thanks very much.

Mr. AGASSI: Thank you very much.

INSKEEP: This is NPR News.

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