Well, you’ve got to hand it to the PR firm that did Better Place’s publicity. Not only did they get their client on the Today Show, the story went global in the New York Times. And, on the face of it, their project sounds great. There are four big problems with the electric car: even the best batteries give a relatively short maximum range, they take a long time to recharge, there’s no infrastructure for recharging on the go, and the batteries are expensive. Better Place hopes to overcome these problems with a three-pronged (if you’ll pardon the pun) approach; a network of “recharge points” where you can plug your electric car in and recharge while parked, battery swapover stations that allow you to physically swap batteries in a couple of minutes if you’re on a trip and don’t have time for a recharge, and the financial machinery so that you pay for the service, rather than buying batteries outright.
The plan is plausible enough at the technical level. The Nissan-Renault alliance is planning to have full-electric vehicles available by around 2011 or so; reports vary on the range of the vehicles, but something around 160 kilometres is plausible. A number of battery manufacturers are building factories to churn the requisite lithium-ion cells out, and the projected battery durability is good enough to make the things practical. And recharge stations and battery swapover points are pretty simple exercises. So, in the longer term, I reckon this company is on to something along the lines of the right concept. Battery tech is already good enough to provide plausible city cars, and it improves every year. We already know of a number of ways to generate zero-emission electricity. And the battery leasing model takes a lot of the risk out of an electric car for the purchaser.
In the short term, however, there are very good reasons to be skeptical of large-scale electric vehicle rollout schemes; and lots of reasons to expect the companies involved to have their hand out to government.
The first thing to keep in mind is that, even if the first Nissan-Renault EVs start appearing on Australian roads in 2012, they will be in extremely limited numbers; it will take several years after that to gear up production. Given the limited numbers, it’s hard to see a large rollout of charging infrastructure any time soon, unless the corporate backers are happy to have squads of recharging stations seeing bugger-all use for several years. Achieving useful coverage outside the inner suburbs of the east coast cities is going to take a while; outside the metro areas, I doubt you’d be do a cross-country trip unless you took either the Hume or Pacific highways.
Furthermore, in the short term the batteries are going to be very, very expensive. Battery costs for EV’s is a fairly closely guarded secret right now, but informed specuation puts the price of the Chevrolet Volt’s battery at over 5000 USD. That’s to push a car roughly 60 kilometres. A full EV, with a 160 kilometre range, will have a battery pack worth at least 10,000 USD – or (at least as of writing, who knows where the currency will be in an hour or two), something like 16,000 Australian dollars. Even ignoring wear and tear on the battery, and assuming $2/liter petrol, that’s 8,000 liters, easily enough to drive 100,000 urban kilometres in something like a Toyota Yaris. Even assuming that the electricity to charge the battery is free, it’s not something you’d do for financial reasons just yet! Yes, the financial engineering means you won’t pay for the battery upfront, but it ultimately has to be paid for, and the cost eventually makes its way back to the vehicle user. No amount of financial wizardary can avoid that!
The cost, and life, of these battery packs also calls substantially into question another touted benefit of electric vehicles – using them to smooth out the balance between demand and supply in a renewable energy-powered electricity grid. While I can’t find the link, somebody from AGL – one of the partners in this project – gave a radio interview claiming that they could feed energy from the batteries back into the grid if needed. Not with 10,000 USD batteries you won’t; the wear and tear on the batteries will cost them more than the power’s worth. They could presumably charge at off-peak times when there’s an excess of power, but feeding back into the grid is, from everything I’ve read so far, only going to work as a substitute for Spinning reserve in the short-to-medium term.
Given all that, you’d have to think that in the short term that the market for pure electric vehicles will be small; too small to justify billion-dollar outlays for charging infrastructure. Macquarie Bank, AGL, and Renault-Nissan (these days, a cross-held corporate alliance) aren’t known as charities, so if they intend to make a buck out of the process money will have to come from somewhere else. In Israel, Better Place’s first target country, that somewhere else is government support, direct and indirect. Israel charges a 72 percent tax on conventional vehicles, but only 10 percent on electrics. If people are going to buy electric cars in Australia for financial reasons, similarly drastic differences in government treatment will be required, far beyond what emissions trading will offer.
If I were a government minister receiving a visit from Better Place and its partners for some kind of government incentive, I’d look very long and hard at the environmental benefits we’ll get for the dough they’re asking for. Just like solar panels, I’d expect the answer to come back – lots of money for bugger-all environmental gains. And that should be the bottom line, not slick PR campaigns that suck in a gullible mainstream media.