There is a growing consensus in the financial industry that electric vehicles (EVs) are poised to transform the car market over the next 5 to 20 years. We see four main factors:

1. Technical developments in electric cars and batteries now make it feasible to have a “quality” electric sedan with a 100 mile range. These cars exist today (e.g. Nissan Leaf, Mitsubishi iMiEV, and Renault Fluence).

2. The US government is providing billions in incentives to create a US electric motor industry and market.

3. The Chinese government has committed to develop its car market as an EV market.

4. Governments and most vehicle OEMs recognise that achieving CO2 reduction targets will require at least some of the car fleet to be EV.

Differences in opinion arise as to how quickly EV adoption will then occur. One view is that consumer adoption will take off first among “low range” urban users buying (or leasing) EVs who can charge at home overnight. One potential factor in the pace of adoption from the perspective of the financial industry is that EVs (including battery) like any new technology, are initially more expensive than their internal combustion engine (ICE) equivalents. The low mileage urban users, who would otherwise be the most likely adopters, do not get sufficient total cost of ownership benefit from their petrol saving to make the purchase of a quality EV economically advantageous. Unless there is a government subsidy or tax incentive, the purchase decision must be based on another factor like a superior driving experience or social responsibility.

Better Place changes the equation. Its great innovation is to recognise that the key weakness of EVs – range – can be overcome today through battery switching such that:

• EVs can become a pragmatic reality in most markets for most drivers today without any need for further technical advancements, as battery switching extends range equivalent to petrol stations.

• Battery switch allows EVs to be sold to high mileage drivers for whom EVs have the greatest economic cost advantage over ICE cars (since these drivers spend most on petrol and electricity is relatively very cheap).

• Consequently, purchasing an EV can be a sound cost/price decision as well as a decision to go green, get a better driving experience, or enhance our energy security.

• By capturing high mileage drivers, Better Place can generate material profits sufficient both to justify the necessary infrastructure investment and provide attractive offerings to lower mileage buyers.

Better Place has developed a subscription business model (analogous to mobile phones) that we believe will be highly attractive as a consumer and commercial proposition. Consumers need not own their battery to have access to Better Place’s battery switching network, making an EV potentially cheaper than an equivalent ICE car. Batteries use in-car software to talk to the switch station (e.g. “release battery now” or “charge battery now”), which in turn can talk to the electricity grid. This allows highly cost effective recharging of batteries and management of grid capacities, overcoming concerns about the potential impact of rapid proliferation of EVs that might recharge unpredictably and impact the electric grid.

Given this ingenious model, the transition to EVs may be faster than initially estimated. In those markets where switchable-battery EVs are introduced and the necessary infrastructure is built, there may, in fact, be a rapid shift. Better Place is well positioned to take advantage of this shift since it leads the market in terms of software development, switching technology development and partnering arrangements (e.g. Renault).

We believe that success in Israel and Denmark will prove the model’s validity and that other countries will follow suit, replicating the approach for both commercial and political reasons. Better Place’s success will provide manifold economic, customer experience and environmental benefits to all stakeholders, including customers, industry, and governments.

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