The plan is particularly suited for small countries such as Israel and Denmark. All of the infrastructure needed in Israel can easily be paid for with the money that Project Better Place has already raised, Agassi says. The economics are attractive in other ways. Both countries have very high gas prices–more than $7 a gallon. The countries also have tax policies that heavily favor electric vehicles. In Israel, conventional cars have a sales tax of 72 percent, while electric cars are only taxed at 10 percent. In Denmark, the difference is even bigger. The government collects a tax of 150 percent on conventional cars, while electric cars are tax-free. As a result, Agassi says, a typical sedan in Denmark costs $60,000, while an electric car will cost just $20,000.
To work in the United States, Agassi says, the approach would need to be implemented at the city or state level, since the country is so much larger. It would be fairly easy, he says, to install recharging grids in cities and, particularly on the East Coast, to connect the cities with swapping stations. He says that higher gas prices will also make the economics more favorable.
Not everyone agrees that the company’s approach can work in the United States. Menahem Anderman, a highly regarded automotive-battery consultant and the founder of Advanced Automotive Batteries, says that the approach will be expensive, and that battery swapping can damage the batteries, reducing their life and reliability.
Regardless of the future of the technology in larger countries, Project Better Place is now getting its first project under way in Israel, working with utilities on a plan to build its recharging grid. Agassi predicts that results will be fast. He projects that in Israel, within 10 years, electric cars will outsell conventional vehicles.