Electric cars to overtake petrol Down Under by 2016

The fast-talking founder and global boss of the Better Place battery swap scheme, Shai Agassi, believes sales of electric cars will overtake sales of new petrol-powered cars in Australia as soon as 2016.

The ambitious claim was made during an interview with the Carsales Network at the Frankfurt motor show overnight, where Renault had just unveiled a medium-sized family car with a switchable battery pack (see seperate story).

Agassi's claim is grossly at odds with automotive industry experts who consistently predict electric cars will account for about 5 to 10 per cent of new-car sales in Australia by 2020.

The enthusiastic Agassi, who made his fortune and reputation in computer electronics and is now turning his passion and expertise to the automotive industry, was not misquoted. During our one-on-one interview we checked several times that he wasn't mistaken.

Agassi began by using Israel, the pilot market for Better Place, as an example of a region that would adopt electric cars at rapid pace. But then, unprompted, he said Australia would quickly follow suit.

In the unedited transcript Agassi said: "In Israel by 2015 there will be more electric cars – my projection, maybe I'm crazy – but more electric cars will come onto the market that year than gasoline cars. I may be off by a year. Maybe it's 2014 or 2016 but roughly around that point in time there will be more electric cars and switchable battery cars coming onto the market than gasoline cars. And by the way Australia will be roughly the same time."

When asked if he meant the arrival of electric cars in Australia would be at the same time, or the fact EVs might outsell petrol cars in Australia at that time, he stated: "Oh definitely. You know why? If you see the uptake in Israel and Denmark [the first two Better Place EV infrastructure markets] you will write the headline that says 'Beware the tailpipe'.

"You buy a car with a tailpipe today, you can't sell it in three years' time, you'll get stuck with it Mr Consumer. I've seen the future and it's called Israel."

When asked why, if EVs are the future, local carmakers Holden and Ford haven't committed to an Australian-made electric car, he said: "I think if Holden and Ford were left to their own senses right now, they would go electric. But their decisions are being made at head office, in Detroit Michigan.

"Employees of those companies in Australia should contact their headquarters and ask to be their [company's] first experiment."

When it was pointed out that Australian motorists have vast distances to cover and drive a broad range of vehicles, Agassi stuck by his forecast. Indeed, he said Australia's capital cities were likely to be more successful than Israel because of their population size and potential for growth.

"If Melbourne was an island, but it could expand beyond the fringes, would it not get better return on infrastructure than Israel? If greater Sydney was an island that could expand, would it not get better return on infrastructure than Israel? If Brisbane was an island that could expand, would it not get better return on infrastructure than Israel?

"The only extra cost of connecting those three cities is the [battery swap stations along the] highway. The cost is $50 million. In broad terms that's nothing. Australia is a much better business than Israel and Denmark."

Agassi cast doubt on the bona fides of the automotive industry's projections that EVs would account for only 10 per cent of new-car sales in 2020.

"Who's estimate is that? When were the car makers right about anything in the last decade? You're talking about a collective group that lost $US100 billion in the last 12 months. You want to take their estimates? How can it be 10 per cent? That's the thing I don't get.

"It's either zero or 100 per cent. What, there's only 10 per cent smart people and 90 per cent idiots?

"When there's a reducing cost per kilometre of the new petrol, my petrol (electric power), why would someone pay more for the old petrol?

"My petrol is about 6 Australian cents a kilometre, or 72 Australian cents per virtual litre. Will you ever be able to buy petrol for 72 cents in Australia again?

"Go to a petrol station and see if they can guarantee the price for four years. We can do that with Better Place."

Agassi says battery technology may improve so greatly that the cost to run electric cars could come down over the time of ownership.

"In five years time it's probably going to be half price. Let's say the battery that lasted 2000 cycles now lasts 4000 cycles, through production improvements in consumer electronics. It happens.

"It may even cost less than that. I may get a battery that will cost $300 per kilowatt hour instead of $500 per kilowatt hour simply because production will create an abundance. And then I give you some money back. How good would that be?"

He rejected the suggestion that Better Place would become a monopoly or have such a stranglehold on the market that it would increase the cost of its services once it had a captive market.

"We want competition. In fact I'm surprised there's not more already," he said.

"I believe there will be Another Place, there'll be an Almost Better Place, and there will probably be a Really Terrible Place. But I guarantee you that what we will never be is Evil Place. I'm not motivated by greed, I'm motivated by speed.

"We're trying to tip the market as fast as possible. It's not in my interest to get more margin, it's in my interest to get more market."

A trial Better Place battery swap and fast charge EV infrastructure scheme is due to commence construction on battery exchange terminal in Canberra in 2011 ready for customer use in 2012.

Better Place is involved with joint carmakers Nissan and Renault, which have developed electrics car whose battery packs can be replaced in less than five minutes, about the same time it takes to refuel a petrol car.

In the Better Place example, cars are driven over a ramp and the battery is automatically removed and replaced by robotic movement at the press of a button in as little as 73 seconds.

To date, experimental electric cars have a driving range of between 90km and 160km, but the Better Place system is designed to overcome this hurdle for those who need to commute beyond city fringes. Figures show most daily commuters travel less than 70km to and from work.

Agassi admitted Canberra was used as a test market because of its infrastructure but also because it was under the noses of Federal politicians.

"It's a mini Arizona. It's kind of in the middle of nowhere but it has good infrastructure. It's a fantastic place to put a test because of the distances people have to travel when they venture outside the city. Plus it'll hopefully get Kevin Rudd's attention."

Check out the Carsales Network’s Frankfurt show preview and brand-by-brand summaries. And stay tuned for more Frankfurt show news and first drives in the days to come.

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