Better Place, a startup with plans to install widespread charging infrastructure to make electric vehicles more practical, announced today that it had pulled in a massive $350 million in second-round financing.
“The deal marks one of the largest clean tech investments in history and values Better Place at $1.25 billion,” the Palo Alto, CA-based company said in a statement.
The financing is a major endorsement of the company’s approach to overcoming the limited range of electric vehicles. Another approach, taken by GM for example, is to include a gasoline powered engine for longer trips. But Better Place intends to install a network of charging stations paired with a network of battery swap stations.
Ubiquitous charging stations will keep batteries topped off, since most of the time cars are parked. For longer trips, battery swap stations will allow drivers to exchange a depleted battery for a charged one in less time than it would take to fill a gas tank. Better Place also has a financing model for electric cars that’s similar to cell phone plans. Drivers pay a monthly fee according to how many miles they’d like to drive, much as cell phone users pay for minutes. This system would be used to distribute the cost of batteries over the life of the car.
But critics have pointed out that such swapping stations could be unmanageable if manufacturers use many different types of batteries (they’d have to keep too many different types of batteries on hand). What’s more, they’d still require drivers to stop every hundred miles or so, far more often than with gasoline cars. The solution, then, might be well-suited for small countries, where trips are short (such as Israel or Japan) but not the United States.
Meanwhile, others are developing similar models without Better Place, such as Nissan, which is cutting out the middle man by working directly with cities and utilities to develop charging infrastructure for its planned electric vehicles. It is also developing novel financing plans to distribute the cost of the battery.