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.

An exciting battery company called A123 Systems, a startup based in Watertown, MA, that has commercialized materials developed at MIT, has filed documents announcing an initial stock offering. The company, which has received considerable favorable attention in the press, including in the pages of Technology Review, has developed a battery that it claims is safer, lasts longer, and delivers more power than other lithium-ion batteries. What's particularly remarkable about the company is that, although it's a small startup, it has garnered the attention of major companies, including General Motors, which is testing A123's batteries for potential use in an upcoming electric car. In cooperation with these companies, A123 is currently designing and developing batteries for 19 different vehicles.

The company's prospectus, filed with the Security and Exchange Commission (SEC) last Friday, contains some tantalizing glimpses at less public details of the company. The 19-models figure mentioned above, for example, comes from the prospectus. But what's perhaps more noteworthy, given the company's favorable attention, is the detailed list of the risks that it faces--things that company execs downplay during interviews. The list underscores just how difficult it is for newcomers to break into the lithium-ion industry--even with the sort of promising tech that A123 has developed. Established battery makers have more resources and already have close connections with and commitments from automakers. From the prospectus: "Our principal competitors have, and any future competitors may have, greater financial and marketing resources than we do, and they may therefore develop batteries or other technologies similar or superior to ours or otherwise compete more successfully than we do."

A123's success so far is due to its ability to develop ways to manufacture its nanostructured materials. The company's competitors might solve similar problems themselves and produce batteries that could outperform A123's. A123 has responded by investing heavily in research and development.

The prospectus also gives a glimpse into the challenges of working in China, where A123 manufactures most of its batteries. In addition to worrying about trade relations between China and the United States, the company has to deal with a patchwork legal system, poor protection of patents, and business practices that put more value on personal relationships with senior management than on contracts. If A123 Systems continues to be successful, its ability to navigate these and other challenges will make it a good case study in what it takes to move tech out of the lab and into a highly competitive, international industry.

According to the Wall Street Journal, Honda, Nissan, and Renault are making the same arguments against hybrid vehicles that General Motors made several years ago to predict that hybrids would fail. (See "Hybrid or Electric: Car Makers Take Sides" and "Honda Won't Pursue Plug-in Hybrids.") The difference now is that the arguments are right this time--at least for some markets.

In the 1990s, U.S. automakers such as GM led the development of hybrid-vehicle technology. But GM elected to drop hybrids in favor of a much longer-term technology--hydrogen fuel-cell vehicles--arguing that hybrids were too expensive and didn't provide enough environmental benefit to be successful. Then Toyota's Prius proved GM wrong. And recently, GM has become a big promoter of hybrid technology, especially next-generation plug-in hybrids.

Not so Honda, Nissan, and Renault. According to the Journal report, Carlos Ghosn, the CEO of Renault and Nissan, complains that hybrids don't really do much to reduce petroleum consumption and pollution, arguing that it's better to build all-electric vehicles that have zero emissions. U.S. automakers such as GM made the same arguments, although they pushed for fuel-cell vehicles, not battery-powered vehicles. (GM, of course, already had a battery-electric vehicle, the EV1, which it scrapped.)

Honda currently sells hybrid vehicles, but the company's president and CEO, Takeo Fukui, is skeptical of next-generation plug-in hybrids. Such cars would still have both electric motors and a gasoline engine, but they could go much farther on electricity alone than today's hybrids can. GM has been touting its Volt concept, which would go 40 miles on electricity stored in lithium-ion batteries. For longer trips, a gas generator would kick on to recharge the battery, providing an additional 600 miles of range. Fukui's argument is that the gas engine in the Volt is unnecessary. Presumably, he is suggesting that it would be better, and cheaper, to use batteries alone, or to stick with gasoline.

His argument doesn't make sense in the United States, where there's probably not much of a market for a car that can only go 40 miles on a charge. But a couple of trends suggest that there may indeed be a growing market for relatively short-range electric cars. London has a congestion tax on vehicles driving in the city--and other cities are considering imposing similar fees--from which zero-emission vehicles are exempt. It's not unlikely that such regulations could evolve to keep non-zero-emission vehicles out of city centers entirely, Ghosn suggests. Meanwhile, the taxes make it more expensive to drive gas-powered cars. Climate-change legislation could also make it more expensive to drive conventional vehicles. As these costs rise, the people who will feel the pressure most are those who are likely unable to afford a car with both an engine and an electric motor. For them, a 40-mile, zero-emission, all-electric commuter could be appealing, especially considering the fact that (in the United States) most people drive less than 40 miles a day.