Better Place (formerly Project Better Place), a company that plans to develop electric-car infrastructures for Israel and Denmark, has now announced plans to do the same in a much bigger country: Australia. The plan is to eventually make it unnecessary for Australia to import any oil.

If it succeeds there, the company's model could work in parts of the United States, too, such as the West Coast or the cities from Boston to Washington on the East Coast.

Better Place has proposed ways to overcome the limitations of today's technology for electric vehicles--namely, the cost and recharge times of batteries. To keep down initial costs for customers, the company plans to sell cars in much the way that mobile-phone companies sell phones: with a subsidized low cost and a monthly plan. For the cars, the plan will pay for miles of driving, not minutes of talk time. The company also plans to install networks of charging stations, so that drivers can keep their cars topped off during the day, and battery swap stations along highways, where drivers can exchange a depleted battery for a charged one on long trips.

The plan seemed to make sense for Israel and Denmark, relatively small countries where such networks could be easily installed and where government policies heavily favor electric cars. But Better Place's CEO, Shai Agassi, has said that it could work in the United States as well. (See this video.) Rather than connect the whole country, however, the plan would be to connect certain urban centers, such as those from Boston to Washington, DC, or from Los Angeles to Seattle. Government policies would still be needed to make the plan economical.

In the announcement of the Australia deal, Agassi emphasized that if the system can work in Australia, which has more car ownership per capita than the United States, it could work in the United States.

Not everyone is so optimistic.

Speedy electric: Tesla's Roadster, an electric car that reaches 60 miles per hour in less than four seconds. Credit: Tesla Motors

Tesla Motors, a Silicon Valley startup that sells a high-performance electric sports car, is feeling pressure from the ongoing financial crisis. It announced on Wednesday that it is closing an engineering facility in Michigan, laying off an unspecified number of workers, and delaying its next vehicle, a long-anticipated luxury sedan, while it waits on government loans to provide new funding. In addition, Tesla's CEO is being replaced by Elon Musk, Tesla's chairman and a leading investor, whose money nearly single-handedly got the company off the ground. Now the company, instead of pushing full speed ahead on developing new cars, will focus on making itself profitable by selling its sports car and motor and battery technology.

That's bad news for people who had hoped that the company would eventually produce an electric car they could afford. Tesla got attention because of its sports car, a powerful car that is fun to drive and helped change the image of electric vehicles. But the $109,000 vehicle is beyond the reach of most people. Much of the appeal of the company has been its long-term goal of making electric vehicles affordable. The proposed luxury sedan, with a price tag of $60,000, would be a significant step in that direction, but the cutbacks at the company raise questions about whether it will be able to meet its long-term goal. Tesla's sedan was originally to have gone into production in 2009. But that's been pushed back to mid-2011 at the soonest. That's after GM is to come out with an electric sedan of its own, the Volt, which is supposed to cost about $40,000. And several other automakers will be launching electric vehicles in roughly the same time frame. With a late start on a production sedan, will Tesla be able to go toe-to-toe with the big carmakers? Will it become "one of the great car companies of the 21st century," as Musk hopes? Or will it, as now seems likely, remain a boutique car company, selling specialty vehicles to the relative few?

To be sure, this isn't the first time that Tesla has seen sharp cutbacks. The company, founded in 2003, is already on its fourth CEO. At the beginning of this year, it reportedly laid off about 10 percent of its workforce in what former CEO Martin Eberhard is said to have called a "bloodbath." It's also faced delays before, particularly when it had problems with the transmission on its sports car. And yet the company continues to plug along. The late-coming sports car has nevertheless sold out and has a long waiting list. And Musk, who has considerable personal financial resources, has said he will do whatever it takes to ensure that the company will have enough capital. It's certainly far too early to write the company off.

Credit: Tesla Motors

The severe credit crisis rippling through the markets didn't stop GridPoint--an Arlington, VA, startup that makes software for smart management of the power grid--from securing $120 million in equity financing, announced yesterday. "Really high quality deals will continue to get funded, despite the current turmoil," Peter Corsell, the company's president and CEO (and a member of this year's TR35), told me at a smart-grid conference in Washington, D.C. He said the money will be used to acquire other startups, starting with V2Green, a company that makes smart-grid software for recharging plug-in hybrids and other electric vehicles. GridPoint is a key player in an effort to upgrade the power grid in Boulder, CO, working with utilities including Duke Energy and Xcel Energy. GridPoint's software provides utilities and consumers a Web-based portal to manage and control electrical demand; it can do things like shut off electric water heaters and pool pumps temporarily in times of high demand. To date, GridPoint has raised more than $220 million.