BetterPlace's pole position on the grid

The electric car market is still futurespeak, but EV infrastructure provider BetterPlace has been playing the early bird game for a while now.

The Californian company has already embarked on EV technology trials in Israel and Denmark, with BetterPlace establishing dozens of battery-swap stations in the middle eastern country and on-selling 70,000 of the 100,000 Fluence ZEs purchased from joint-venture partner, Renault.

The company anticipates the establishment, before year's end, of a US $200 million network in Denmark, through a joint venture with Dong Energy. Denmark, a country at the forefront of renewable-energy power generation, relies on wind for 20 per cent of its power. Dong will acquire batteries from BetterPlace to store the energy of the wind, for consumption later. This overcomes one of the principal arguments against wind power — that it's not available all the time, as is power from coal-fired generators.

In Australia, the company has gained a toehold with the announcements that its first charge network will go live in Canberra later this year, and with the pending arrival of Renault’s BetterPlace technology-ready Fluence ZE in 2012.

True, BetterPlace has a long way to go to realise its complex concept of a nationwide network of charging posts and battery-switching stations but it’s almost evangelical in its fervor and it now boasts an impressive line-up of business talent and substantial venture capital to match. The reason? BetterPlace has some smart ideas about how to make electric cars both affordable and usable over long distances.

If we’re in line with global research, Australians are still resistant to the idea of electric cars. The first mainstream branded EV on the nation’s roads, Mitsubishi’s i-MiEV, now sneaks in just under $50K and private buyers aren’t queuing to be the first on their block to own one. That’s not the car’s fault -- our experience with i-MiEV shows it to be quite an enjoyable way to get around. The issue lies with the infrastructure to support such vehicles, which can be described locally as embryonic at best.

But this week heralded a rise in action with Renault’s announcement that its Fluence ZE, an all-electric version of its compact sedan, will be here in 2012. The French giant is investing heavily in elevating itself out of the also-ran ranks of the Aussie car market. And alongside it is the infrastructure company it’s placed its bet on: BetterPlace

The Renault deal helps gain BetterPlace an important toehold in the local market – one it’s already gained overseas, particularly in Israel and Denmark, as noted already.

Here’s the BetterPlace model in a nutshell: the company says it will take on any technology as it assumes viability and relevance, but its commercial keystone is battery swapping. On the surface of it, it’s a simple way to get around the limitations of current battery technology. But its ramifications extend deep into the way cars are designed, built and sold – with a potential important impact on the second hand car market.

This starts with the separation of the purchase of car and battery. It’s a system by which you walk into the showroom and buy your car without its power pack. For that, you subscribe to BetterPlace, which, for one cover-all monthly or annual subscription cost, provides you with an individually tailored package covering use of the battery and, effectively, all the charge power you need.

“So up front, it reduces the cost of the car by taking out its costliest single component,” explains Ben Keneally, BetterPlace’s local strategy chief.

“Under the current system, no one asks you to buy ten years’ petrol up front. Logically, separating those two cost centres [battery and charge] helps get EVs down to an attractive price point faster.”

The battery swap system, while proprietary, doesn’t exclude other means of getting power into your battery. You can top it up at home overnight from a domestic outlet, or at public rapid-charge stations when it’s viable.

But charging – even the high-voltage rapid variety – takes time. When you don’t have time with a vehicle designed for battery swap-outs (Fluence ZE is the first production vehicle of this type) you can pull into one of BetterPlace’s swap stations for a new battery – a ‘transaction’ the company says will take around the time it takes to fill a petrol tank.

The stations are fully automated – you swipe a card at an entry post, drive into a booth like a carwash, stay in the car and entertain yourself for a couple of minutes while it whips out and replaces the battery, and drive out the other end. You can do that as often as you need.

By BetterPlace’s reckoning, a network of these swap-stops through metro areas and along major highways will go a long way to assuage that range anxiety that’s generated so much concern it’s become a term in its own right. That said, images of the wide brown land belie the way Australians really drive, says Keneally.

“Our driving patterns are at least as conducive to EV use as European ones, maybe more so. Europeans spend more time taking interurban trips on freeways. Most of our driving here is intra-urban – we actually spend more time in congested traffic. That means EVs have at least as much to offer here as anywhere,” he says.

“In Australia we have comparatively modest petrol prices, but very high petrol bills. Australian Bureau of Statistics figures show the average Australian car gets 11.1L/100km – and that’s something that hasn’t changed in ten years. All the measured improvements in engine efficiency over that time are frittered away by the way people drive, rising urban congestion, the ubiquity of air conditioning and so on.”

Keneally says fleets are the key sector to look to in hastening wider uptake of EVs.

“They’re important in two ways. Firstly they do the most kilometres, which means in their current form they’re the biggest polluters – they [therefore] have the biggest impact on emissions. So on that front alone they’re the ones who’ll most clearly benefit from it up front -- just for the nature of much of their driving: short-haul urban trips.

Fleets are also all about business value – purchasing decisions are more rational than emotional, making it easier for EV makers and affiliates like BetterPlace to spell out their value proposition.

With the average fleet car putting in about 30,000km a year, Keneally says the company is confident it can deliver fleet managers a zero-emissions solution at no extra cost.

“We’ve interviewed 115 fleet managers over the last six months, and 70 per cent of them have emissions reduction targets among their KPIs. That’s not just government fleets – it’s listed Australian and multinational companies, not-for-profits, universities, charity groups, pretty much every sector,” Keneally explains.

“We’re confident about fleet uptake because, factoring in those imperatives, we’re convinced we can come up with something competitive on TCO [total cost of ownership], and deliver zero emissions. Yes, we can see they might need a couple of years to familiarise themselves and build confidence in something this new, but I suspect we’ll see something start to tip worldwide as early as the mid-teens.

“There will come a point when consumers, fleet owners and especially car finance companies will be asking if they really want to be left holding a petrol car in five years’ time.”

What would BetterPlace like to see happen legislatively to push things along a bit?

“Possibly some residual support would be helpful in encouraging fleets to buy them. To allay their anxieties about losses on sale...”

Not that there’s any practical reason why EV buyers should take a bath at resale time. If anything, in time the opposite could prove the case — although the onward march of technology may counter that too. This brings us to the second factor making fleets important: their role in putting affordable vehicles into the secondhand market after two or three years.

“They [fleets] will be crucial in putting EVs within the reach of private buyers who like the idea but balk at the new price,” the BetterPlace exec opines.

Keneally agrees that the mechanical simplicity of EVs stands, in time, to close the gap between new and second-hand vehicle prices.

“It stands to reason, doesn’t it: the drivetrains are simpler, they suffer less NVH [noise, vibration and harshness], less heat, no lubrication required. In other words, they fare better in all the areas we now look at as major wear-and-tear points. So a used EV will likely be looked upon as much closer to a new car than a used petrol or diesel engine.”

Especially, he stresses, when the purchase equation is divided into two.

“Glass’s Guide in the UK put out a paper projecting comparative residuals between electric and petrol cars. They concluded the best option was an EV with the battery separated from the rest of the car – where the battery is separately owned,” he says.

“I mean, it makes sense – the residual risk lies in the battery, not the car. That helps keep the value up by separating what consumers perceive as the low- and high-risk elements of the total package. You know – how long it’ll last, how it will perform in years six, seven, eight, replacement cost, etc… It’s the stuff with which Toyota grappled with the Prius.

“Separating out the battery removes that residual risk.”

BetterPlace will break ground in Canberra. This isn’t just to put it under the noses of the nation’s rulers, although that’s useful. It’s also because it’s the only Australian city – and one of not many in the Western world – designed after the advent of the horseless carriage.

Walter Burley-Griffin’s infusion of modernist principles into urban planning resulted in a city built in deference to the machine, says Keneally.

“So it’s built for drivers. While it’s not a huge city, Canberrans rack up a lot of kays each year. It’s highly car-dependent.”

The company recently signed a much-publicised deal with Canberra utility ActewAGL, which Keneally says is sufficient to ensure every amp of power going into BetterPlace cars will come from renewable sources.

On the matter of the company’s progress across the remaining states and territories, he’s quiet.

“We’re talking with a number of other providers and it’s logical to expect we’ll make similar announcements in due course.”

When?

“In due course.”

Pricing is another matter on which Better Place remains cagey.

“We’ll release our pricing in due course,” Keneally says.

“We do firmly believe that it’s important for the TCO of electric cars to be the same as, or less than, the TCO for equivalent sized petrol cars.”

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