History offers an imperfect window onto present and future developments. However, in the case of the history of the electric vehicle, there are some important historical parallels that can help us understand the current situation.

First, battery exchange – the idea of decoupling the operation of an electric vehicle from a single, dedicated storage battery – works. Battery exchange is the essential feature that distinguishes the Better Place business model from those of other firms seeking to commercialize alternatives to internal combustion, and it has been successfully tried before, both in the U.S. and abroad. As late as the 1920s in Hartford, Connecticut, the Hartford Electric Light Company offered so-called “Battery System Service” for commercial vehicles. Under this plan, customers purchased a battery-less glider and then paid for electricity on a per-mile basis. Batteries could be exchanged as needed at the company’s central station, and customers were billed each month depending upon the number of vehicle-miles traveled. My research suggests that customers were very satisfied with this service and that average battery exchanges never exceeded one exchange per service day. For most users most of the time, the standard battery of the day (lead-acid) was adequate for most daily service needs. When customers required additional range, battery exchange allowed them to expand daily operating range as needed within the Hartford service region. Battery System Service was eventually discontinued because of the geographical limitations imposed by the utility company’s limited service area and the growing popularity of longer-range internal combustion trucks following World War I. Readers can surely think of many other successful applications of battery exchange (personal electronics, power tools, etc.), but the overarching point is that even in the demanding transportation service setting, history shows that the principle of battery exchange is sound and does not depend upon any specific battery technology.

Second, history suggests that the system is the solution. Commercial success of the electric vehicle relies not upon technological superiority in any one specific domain (e.g. battery chemistry, specific density, or rolling resistance), but on the design of a broad, system-based solution that can meet or exceed customer expectations. Head-to-head against internal combustion, electric vehicles failed in 1900 and failed again and again ever since. Despite all that has happened in the intervening decades, changes in the external market landscape have not altered this fundamental reality. The success of electric-based transportation solutions will therefore result from system-level, business model innovation of the sort embodied by Better Place (and a small number of similarly focused firms), not from magic bullets of new technology. Again, the early electric vehicle companies that succeeded – in New York, Hartford, or Amsterdam – succeeded because they developed innovative and cost-effective systems for delivering transportation service. Better Place stands apart for me in its pursuit of this system-level vision for transportation service. A part of me wishes I were wrong and hopes that a pure technology solution will arrive, thereby altering the cost-performance characteristics of the pure battery electric vehicle to allow such offerings to successfully compete against internal combustion in the vehicle marketplace. Unfortunately, history tells us not to hold our breath.

Third, standards matter. Part of the explanation for the failure of the early electric vehicle can be laid at the feet of the first producers who were unable to agree upon appropriate standards (e.g. battery voltage, size of battery compartment, charging plug design). Such conflicts arose for a number of reasons, some of which will be very familiar to those who have followed the history of the electric vehicle for the past few decades. From a strategic perspective, standards are not neutral. For the electric vehicle to succeed, all participants will need to cooperate in the development of meaningful standards. These include physical standards related to battery compartments, voltages and plug designs, but also extend to social and institutional norms: “The electric vehicle is a thing of beauty,” editorialized Electrical Review in 1909, “and the only thing that appears to be in the way of a remarkable taking up of the electric automobile idea is the lack of intelligent coordination of the various industries represented.” Hopefully, some of these lessons have finally been learned. Entrants in the renascent electric vehicle industry are wise to support each other in furtherance of the larger goals of the industry as a whole.

Looking ahead, I conclude with an encouragement that I often offer to my entrepreneurship students: May you at least make some new mistakes.

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David Kirsch is a historian of technology who has written a book about the early history of the electric vehicle (The Electric Vehicle and the Burden of History (Rutgers University Press)) and a professor of entrepreneurship who has studied efforts to stimulate industry transformation. He has followed Better Place since 2007 when Shai Agassi unveiled the initial plan. With several colleagues, he has written a teaching case that looks at the Better Place business model in the context of the current (i.e., 2009) automobile market.

He has received no compensation from Better Place nor has he been given any information beyond that available to the general public.