In 2007, Israel-based firm Better Place burst onto the automotive scene with a radically customer-friendly idea that threatened to upend the business model for selling emissions-free cars.
Last month, the innovative but troubled company made a not-so-surprising announcement – it was filing for bankruptcy. The disappointing news served as a stark reminder that the road to electric vehicle ubiquity will be filled with casualties.
It also got many in the business press wondering aloud: was Better Place’s revolutionary, battery-swapping business model flawed from the start?
Before we weigh in with some thoughts, let’s review how Better Place was supposed to work.
Instead of making electric vehicle customers pay for the expensive battery packs that drive up the cost of electric cars, Better Place proposed making the batteries easy and fast to swap at special quick-change battery stations. Ownership and maintenance of the batteries would be somebody else’s problem, not the car buyer’s. Instead of going to a gasoline station or plug-in electric charging station, Better Place-compatible cars would drive to a swapping facility whenever the car’s power meter read low, and in five minutes, plug in a fresh battery pack.
If you’re having trouble picturing it, here’s a video from Better Place’s YouTube account, which was still working at the time of this writing. An electric car has very few moving parts, hence there’s not much to wear out. Like the engine on an internal combustion car, an electric’s battery pack is the highest-ticket item to replace when it no longer performs. With battery swap-out technology, car buyers could keep their cars running for far many more years before having to replace them. Sounds like a great deal for car owners, huh?
So where did the company veer off-course? Various post-mortems have pinned blame on a perceived dearth of management with experience in the car business; unhelpful regulators even in the firm’s home country of Israel; and lack of interest from car makers, Renault being the notable exception.
Any or all of the above would have exacerbated the dreaded “chicken or egg” dilemma facing any new technology, including electric cars: which needs to come first to encourage widespread uptake, the neat new gadget or the infrastructure that supports it?
It could simply be that Better Place was a visionary idea just a bit too far ahead of its time. It did require a big infrastructure investment (as much as half a million dollars per swapping station), making it plausible in small countries or on islands, but a capital outlay and marketing nightmare in geographically dispersed markets like the United States. Still, swappable batteries might not yet be down for the count. In its quarterly report filed May 10, Tesla Motors hinted at its own ambitions to use battery swapping technology. The company said its future success may depend in part upon:
“[O]ur capability to rapidly swap out the Model S battery pack and the development of specialized public facilities to perform such swapping, which do not currently exist but which we plan to introduce in the near future.”
Looking further out, like into the next decade, battery strength, range, and charging speed could become non-issues. Don’t laugh – many years ago, large amounts of computer memory, disk storage, and bandwidth were prohibitively expensive for ordinary people. Today companies quite literally give those resources away. Researchers are working now on super batteries that can recharge in seconds or minutes and take up far less space than what we have today.
The bottom line is this: even in the most robust of industries, some companies will fail. That doesn’t mean the technology has no merit or can’t improve society (imagine if people stopped creating and investing in internet companies after 2002 – few, if any of today’s social media sites would be around). Even though Better Place won’t turn out to be the behemoth of battery swapping, it wouldn’t be surprising to see someone else exploit the concept successfully, a few years down the road.