There is no Better Place

MARSHALL Towe talks fast and talks big, which is not surprising when you consider what he is trying to achieve and how little time he has to achieve it.

After all, Mr Towe is responsible for global development for Better Place, the company that aims to start rolling out electric vehicle recharging networks around the world within the next few years (including Australia), with all of the technical, infrastructure and government challenges that such a project entails.

He believes that Better Place, which less than a year ago had fewer than 10 employees, could become as big as Microsoft within only a few years by being first to provide the necessary infrastructure to recharge EVs away from home.

“We have investors, we’re going to be profitable, we’re going to make a lot of money,” California-based Mr Towe told GoAuto in an exclusive interview.

“But we’re not going to make a lot of money by charging somebody more to be green – it shouldn’t cost more to do the right thing, it should cost less, so we want the total cost of ownership of an EV to be less than the full cost of ownership of an internal combustion engine car.

“And we want the driving experience of an EV to be as good if not better.

“It’s a $2.5 trillion market (so) no company’s going to dominate it, no company’s building-out all of America. If you look at the cell phone model, when it started in the US there were 50 cell phone companies, now there’s four. So we think that will happen (and) we’ll embrace the competition.” Better Place will charge about $1000 a month over three years for a vehicle doing 100,000km a year – about the same as the cost of petrol – and will provide the electric car for free at that mileage.

Last month, Better Place revealed that Australia will become the third country to get its electric network – after Israel and Denmark – and only last week it cracked the huge US market, announcing a US$1 billion network for the San Francisco Bay area.

Better Place Australia plans to install one million charge stations – plug-in posts similar to parking meters – in Sydney, Melbourne, Brisbane and Canberra, as well as automated battery exchange stations on the highways linking the capitals.

Mr Towe also revealed that Better Place is pushing governments to introduce legislation requiring all car parks to allocate a certain percentage of bays for electric cars, just like disabled parking.

Left, from top: Better Place's Marshall Towe and Shai Agassi with Gavin Jennings, minister for environment, climate change and innovation for the Victorian government.

Although worldwide deployment is set for 2012, when many of the world’s car-makers will start selling electric cars in volume, there still seem to be more questions than answers when it comes to EVs, but Mr Towe remains confident that the discussions taking place around the world will resolve issues such as standardisation and duplication of infrastructure.

In the meantime, he is talking to all levels of government in Australia – from city councils to state premiers, federal ministers and even the Prime Minister’s office – to ensure that Australia will soon have hundreds of thousands of EVs running around the country.

But he said the strongest support came from the Victorian government and Premier John Brumby in particular for the plan, which will provide 250,000 charge stations around Melbourne by 2012.

“Brumby had a vision – there’s a car industry here – and they were extremely aggressive and supportive,” said Mr Towe. “They took the time to understand what we wanted to do, and we had the same response from the City of Melbourne.

“There’s a lot of policy discussions that we’ve got to have,” he said, noting that Better Place is currently working with governments in 25 countries.

“For the next six to eight months, the most important thing to do is government relations policy.” To that end, the company is urgently searching for “a high-end CEO with vision, who knows government and business, and can champion the cause” before assembling the rest of the Australian team required to achieve the $1 billion roll-out.

Since January this year, Better Place has gone from 10 employees to almost 400 globally and is growing exponentially. Mr Towe acknowledges this is a challenge given the timescale – after all, the concept did not even exist less than two years ago – and that he cannot afford to slip-up.

“If we fail early, we fail,” he concedes. “I can have something go wrong in two years’ time, but I can’t fail now.

“I have to do everything right now because there’s too many people who don’t want EVs – oil companies would rather not have EVs, and Chrysler and GM and Toyota would much rather keep making the cars that they’ve been making for 100 years – so we need to be successful every day. We need to roll quickly, but not out of control.” Macquarie Capital Group has undertaken to provide the $1 billion investment required and, although Mr Towe concedes that the global credit crisis will make this “harder than it was a year ago” to find, he believes investors will appreciate the long-term nature of the project.

He also said that Better Place would not use the entire $1 billion by the 2012 launch, despite the cost of building strategically-placed battery exchange stations down the east coast at a cost of about $500,000 each.

These exchange stations, which will have to be large multi-lane facilities in the capital cities, will be equipped with expensive automation and have adjoining warehouses where the batteries will be stored and fast-charged from high-voltage sub-stations.

The one million charge spots it will install in our cities will cost less than $100 each, said Mr Towe, and will be far simpler than the $2000 units employed currently in the UK and France, which incorporate complex control and credit card functions.

Better Place will use the on-board computer in each car and its own specially-developed software to control the recharging and billing, as well as monitor the power level while you are driving, alerting you as it gets low (via on-board warnings, a text message or even a phone call) and showing you the nearest recharge or exchange stations on the SatNav.

Although Better Place is developing a plug that it hopes will become an international standard, Mr Towe concedes that Australian-market EVs may use a normal domestic three-pin plug because our cars will not be driven in another country.

Further down the track, Mr Towe said that China not only has a huge commitment to electric vehicles, but wants to become the dominant force in the auto industry.

“They’re putting billions of dollars into making that happen,” said Mr Towe of China’s global ambitions, adding that it understands the need to produce a wide range of models and to control battery manufacturing to achieve Detroit-like domination in the future.

“The Chinese have a priority to be ‘Car 2.0’. We’ve been in Car 1.0 for 100 years, and Car 2.0 is EV,” he said.

“If Australia doesn’t step up and start developing and manufacturing its own batteries, then you’ve just traded (dependency on) Saudi Arabia for China, because China will have all the battery manufacturing. And that’s not in Australia’s best interests.

“If you get away from fossil fuel and go to battery technology, you need to own that battery technology, you need to be able to manufacture and you need sources of lithium. All that needs to be thought out now – don’t get to 2020 and have that problem.” Mr Towe admits that it is a huge task getting industry, car companies, battery manufacturers and governments working together for an electric future, but says there is a positive momentum driving it forward.

“If it wasn’t for the meltdown in the car industry, there would not be a care in the world because everything exists – electricity has been around for 130 years, cars have been around for 100 years – so we’re not reinventing the wheel.

“The secret is in making the software do something that gives the user the comfort that you’re not going to run out of battery on the highway, because there’s no way you can walk down the road and get a gallon of electrons.” To begin with, Better Place will target the taxi industry in Australia because of the high mileages covered by cabs and because they tend to congregate in a limited number of locations that are easy to determine.

“We want to break the oil cycle and create a better environment, but you can’t help the environment with the guy who only drives 4000km (a year) because he’s not really polluting and he probably has a small car already.

“We want the taxi driver who does as much as 1000km a day – that’s the guy you have to take out.

“In the studies we’ve done in Australia specifically, if you take out that top 25 per cent of drivers, you’re moving the CO2 level by 60-65 per cent, so that makes a difference.

“Those taxis that drive 1000km a day are driving in a very known path … in Sydney’s case, 80-90 per cent of the taxis go to one of six places once a day – there’s my six battery exchange spots, so I have to figure out how to get them there.

“That’s why our connections with the government are so important. We need to carve some areas around the airports and train stations.” Mr Towe said that, as battery technology improves, the range will go from the 160-180km to 200-250km, which will not only appeal more to taxi drivers but also reduce the problem of driving between the capital cities.

Nevertheless, to make its automated battery exchange viable, Better Place realises that other manufacturers – not just Renault-Nissan, with which it has an alliance – need to produce cars that conform with certain parameters such as battery size, location and attachment method.

And this could be difficult in a competitive industry where designers and engineers are seeking any performance or packaging edge, not to mention consumers who want model and brand differentiation. Cars, after all, are not white goods.

“This is a very collaborative effort with the car companies,” Mr Towe assured us. “Dialogue is open with everybody.

“Up until October last year, this wasn’t even on anyone’s radar, and car companies work in sundial-like cycles, they’re not quick-reacting, so what we’re doing now is getting into that process, getting into the strategy groups and the product development groups.

“We’ve got the Better Place exchange mechanism, which is not all that complex, it’s some hooks and some strings, we share that design with the car companies, then they look at the models they’ve got coming out in 2011 to 2013 and they see what models that works with – rear-wheel drive, front-wheel drive, how the suspension works, how the boot space is configured, all that impacts our ability to do the exchange.

“Right now, we’re the only battery exchange game in town. Nobody else is thinking about it. So, if a car company wants to build (our) battery exchange into their design, their cars will work with it.” One can only hope that we do not fall into a VHS/Beta situation that will divide the industry and simply frustrate consumers. And, given that EVs are close to mass-production, there is not much time to bring a lot of slow-moving organisations into step.

And, with 200 million new cars coming onto the roads in China alone by 2020, bringing the world total to one billion, Mr Towe suggests that we must move to renewable power and electric cars without delay.

“Something has to happen quickly. We can’t just stop at a (certain) level – we have to get some climate recovery going.”

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