Next month, Better Place, a startup based in California, will begin selling electric cars in Israel that come with subscription packages that include a leased battery and the cost of recharging it. Gasoline is expensive and taxes on gas-powered cars are high in Israel, and the company says the packages could make owning an electric car 20 percent cheaper than owning a gasoline-powered car.
Better Place is trying to solve the biggest challenge to the widespread adoption of electric cars: the limitations imposed by battery chemistry. A battery big enough to give an electric car the same range as the average gas car would be far too large and expensive; and recharging battery packs takes hours at standard outlets, compared to the minutes it takes to refuel a conventional car.
Better Place will sell a new electric sedan made by Renault that has a range of just over 100 miles on a charge—enough for most daily commutes. For longer trips, Better Place provides battery swap stations, where an automated system switches out a depleted battery for a fully-charged one in less than five minutes. Instead of owning the batteries, the car owners buy subscriptions for a certain number of kilometers of driving per year. They can choose from several plans, much the same way mobile phone owners subscribe to minutes.
The size of Israel limits the number of swap stations needed. What’s more, high taxes on gas-powered cars, as well as high prices for gasoline (about $8 a gallon), should help make electric cars more attractive.
Better Place offers one package that includes the cost of the car and three years of driving 25,000 kilometers per year for $46,000. The company says this price amounts to a 35 percent savings over buying and fueling a gas car in Israel over three years. Other packages include a cost of about $36,000 for the car, with monthly subscription fees ranging from $320 to $470 a month for 20,000 to 30,000 kilometers of driving per year, respectively. For both packages, the price includes the installation of a charging station at home.
Michael Granoff, head of oil dependence policies at Better Place, says the company has 20,000 individual customers on a waiting list to buy the cars, and 70,000 tentative orders from fleet customers. “That’s nearly half the car market for Israel,” he says.