Great, well, those who read this right now probably have no idea what I’m talking about, since this project is mostly mentioned in business magazines, and the truth is that my generation prefers to read magazines that are focused on a younger audience, dealing with simpler issues.

The reason I decided to write this article is that I believe wholeheartedly in the project that I’ll describe in more depth soon, and I really do think that a significant part of its ultimate success will be dependent on our generation – the younger generation that will define at the end of the day how the world will look tomorrow and the coming years. In short, if you care, keep reading. And if you don’t care, read it and you’ll start caring.

Bar Refaeli at the Better Place Center. This article originally written for Maarive Newspaper, and first published in Rating Magazine in Israel on August 11, 2010.

Running on empty

One Tel Aviv evening in July, I met up at the neighborhood bar with a few friends that came from the United States to Israel for a month. Young guys, assertive, entrepreneurial and caring, that started together a group that is called “Smart Series,” which connects young brains and encourages the younger generations to succeed in life in general, and in business in particular. At first, they struck me like a typical bunch of guys who came to Tel Aviv to party and enjoy themselves. When I asked them what impressed them most during their visit to the Holy Land, their answer was “Shai Agassi” (not before they admitted they’d like to live here, since “there’s no place in the world like Tel Aviv”). The answer surprised me. I didn’t understand how they would have known the name, and even more so I couldn’t understand how they ended up getting to meet him in the first place.

For myself, I first learned of Shai Agassi completely accidentally. One day I was hanging out at a girlfriend’s place, bored, and after I read all the newspaper I had nothing left but the business section. I ran across an article about Agassi, and when I read it I was surprised to read that it speaks of an Israeli success story of a young man with an ambition to change the world. The article described Agassi as being part of a tiny minority of people who can actually turn dreams into reality. He founded Better Place out of a goal to turn Israel into a country that is independent of oil (and along the way lead to similar efforts elsewhere, of course), by building the network infrastructure that enables electric vehicles.

I did a bit of research with my friends and found out most of my friends weren’t aware of the problems oil poses to the world. First of all, oil is one of the greatest pollutants in the world. The oil we find today (or, more accurately, drill deep into the Earth to find) has been there for millions of years, but the truth is that we may use up all we have very soon – and that will be a very big problem. Why? Because today we use oil (and its derivatives) to make almost everything – let alone the masses of oil required by the drilling machines we run to find more oil. Oil today is responsible for 35% of air pollution; of that, 25% comes from cars that are perpetually polluting the air we all breathe—leading to sickness and death.

As the world population grows (and it’s growing at the rhythm of the samba), it uses more and more energy that originates in oil and is warming up the Earth faster and faster. Some of the results include melting glaciers, hurricanes, floods, and damage to agriculture, flora, and fauna. Remember Hurricane Katrina? Then you’re starting to get it.

Another anticipated effect of global warming is rising sea levels—pay attention all of you who are dreaming of one day living on the sea. Yet another problem: most of the oil originates in the Middle East, and no, not in Israel. That means that Israel is dependent mostly on historically unfriendly countries for our own oil. And we’re not just dependent on them – we’re funding them. That means that if we aren’t so dependent on oil, we won’t be so dependent on them and we could, perhaps, open a new door for peace. And that is just the tip of the iceberg.

Heal the world

Ok, let’s get back to our story. Those friends of mine at the bar made the introduction to Shai, who was kind enough to host me at his center. I got there, curious, little-knowing, and left full of knowledge and ambition. Shai started the visit with the phrase, “You just came to the last gas station.” There’s a reason why the center was built at Pi Glilot, one of the round storage tanks that we all have seen used to store gasoline for Israel. Today it is used to explain how the electric car is going to work, running on electric batteries that need zero oil. Yes, zero.

After a short conversation with Shai I got in the car to check it out. At first, I thought that the car didn’t work, since nothing seemed to happen when I I turned it on. And then Shai explained to me, smiling, that electric cars make no noise. And beyond that – I can program it so it sounds like a Lamborghini. We started driving. Shai told me to press the acceleration all the way, but since my mom was in the backseat (although my mom is one of the smartest women I know, I felt she too needs a bit of education on the environment) it was a bit of a problem. I decided to just trust him when he says the car goes 0-100km/h in 8 seconds.

I won’t try to sell you the car and say that driving it is smooth, stable, and extremely high quality, because I don’t sell cars (at least, not yet). What I will say is that afterwards I did watch the short movie that poses the problem, offers the solution, and explains the infrastructure built by the company that will make it…you guessed it, a better place.

The movie was simple, clear, and more than anything got me anxious and worried. It seems that’s the feeling you get when you know something big is approaching.

The electric vehicle already exists in the world. This invention is not the car itself. The innovation is the holistic solution that the infrastructure offers. I would call it the “recycling bin effect.”

I remember since I was little I always asked my mom why she doesn’t recycle. When I started spending a lot of time outside Israel and I learned more, it started bothering me more – and her answer wasn’t logical: she didn’t recycle because she didn’t know where. After all, she won’t drive around with plastic bottles in her trunk for months until she spots a recycling bin.

Today she recycles everything, from paper and aluminum cans to all sorts of plastic. I would be happy to take credit and say that it’s because I was such a pest, but no. The reason is simple: there are recycling bins on every corner, period.

Agassi’s project is similar in some respects. Electric cars will charge using a short cable, from outlet to car, just like you charge your phone. The same charge points will be underneath or outside your home, at your work, and also – just like recycling bins – in cities, parking lots, shopping malls, etc. The moment charge points are widely accessible, driving all the way to the gas station to fill up won’t seem so easy.

If I was clear enough so far, and I got you interested for real, I’m sure you’ll start asking questions like, “How much time is the battery good for?” “What would happen when you have to go far?” or “How long does it take to fill up from empty?” For all those there are answers, and they’re all easily accessible, smart, interesting, and efficient. But I won’t tell it here, because what I want to do here at the end of the day is to get you to go see it yourself, since there’s nothing like seeing it with your own eyes. I suggest all of you take the initiative and go check out the short tour of the Center. Before the revolution can happen more widely, it must first happen with us, in our minds and in our souls. It’s important to learn more about the topic, to understand and to advance toward a significant change, and it is our responsibility to take part in it.

Now it’s your turn

Like I said, I’m full of energy to help this project since it will help all of us – me, you, and all coming generations. The idea is not mine, the realization definitely not mine, but since I have the opportunity to have this voice, I am working hard to get the message to the right places. That’s why I wrote this special report. I want to use my voice and invite you to pass it on. We all have influence here or there, small or big, and any influence is welcome. Someone very smart (my mother, Tzipi Refaeli) told me once, “If you give, you get back double.”

When I was little I thought if I gave away one bag of Bamba, she’d buy me two more. When I grew up, I realized she meant a different type of giving. From the love I give to my friends I feel that I get back the whole world and more. From giving to those who have less I feel even better, because I get back so much more. From giving back to the environment, and from the very fact that I share this story with everyone I meet… well, just go there yourselves and you’ll understand how I feel.

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This article originally written for Maarive Newspaper, and first published in Rating Magazine in Israel on August 11, 2010.

During his visit, Senator Lieberman marveled at the impact that Better Place’s success could have on the two issues that many would say have defined his long public service – security and environment. While his emphasis on the former has historically landed him in trouble with Democrats, his passion to combat climate change dates back to long before it was in vogue, often irking Republicans. What everyone can agree on is that ending oil dependence resolves a broad swath of problems that cut across traditional partisan ideologies.

Most of the 20,000 people who have come to the Better Place Center in the six months since it opened, just outside of Tel Aviv, are ordinary Israeli car-owners, gaining an understanding of how choosing their next car can also enlist them in a powerful global mission. After being welcomed to the visually-striking facility, visitors are given a brief but powerful multimedia presentation recapping the problems wrought by dependence on oil, and demonstrating how making the switch to electric could save them both time and money – and save the planet for their grandchildren. Next, all licensed visitors have a chance to drive a prototype electric vehicle on a test track – long enough for them to test its power and acceleration. Finally, visitors get an up-close demonstration of how Better Place makes electric vehicles unlimited in range – by switching depleted batteries for fully charged ones in just minutes.

It’s a powerful message for people thinking about their next car. But it’s also powerful for decision-makers setting plans and policies for governments and industries. So it’s small wonder that the Center has also become a magnet for government and industry leaders from countries the world over.

For example, the same week Senator Lieberman visited, Governor Bill Ritter of Colorado, who has distinguished his term with an emphasis on economic growth through a cleaner economy, came to the Center. Other American officials who have come include the Deputy Secretary of State, Jacob Lew, who was recently appointed the White House Director of the Office of Management and Budget, and Dr. Eric Lander, co-chair of the White House Council of Advisors on Science and Technology.

In recent weeks, visitors from other countries have included Parliamentary delegations from Canada and El Salvador, 25 members of the Automotive Component Manufacturers Association of India, and an international group of professors representing 30 universities in 18 countries. The Center has received heads of state from Panama and Estonia, diplomats from Korea, mayors from France, venture capitalists from China, ministers from Australia, Belize, Colombia, Lithuania and Luxemburg. Staff from many of the Embassies located nearby have come, and later encouraged their visiting colleagues to take a tour as well. Additionally, dozens of student and organizational groups from the US and many other countries around the world come regularly to the Center.

Invariably, visitors from abroad have also visited Israel’s most important historic sites dating back many thousands of years, provoking a near-universal appreciation for encountering on the same trip the very distant past, and the very dramatic future.

Better Place opened the Center primarily to educate local future consumers. But, passionate as everyone at Better Place is about the mission of ending oil, we are delighted that so many of the influential women and men drawn to visit Israel for such a wide variety of reasons, have also found the glimpse into the future of energy that the Center offers to be inspiring in its own right.

And we encourage you to come to Israel and see the Center for yourself!

Unlike most of the IT-related companies that can achieve instant propagation through internet and software tools (and often with smaller required investment), many cleantech startups operate in a more capital-intensive environment often characterized by long time horizons and capital outlays for hardware development, testing and deployment. Given these differences, cleantech companies require investors with a different profile: the ability to deploy large amounts of capital, often over multiple rounds, and to look beyond a 5-10 year timeframe.

In exchange for heavy investment of money and time, investors expect significant return. To achieve returns commensurate with cleantech investors’ expectations, it is critical to develop a “winning formula” that can be scaled up to achieve return multiples.

For Better Place, scalability is about combining economies of scale with replicability (simultaneously going to market in multiple regions while addressing the characteristics unique for each). In addition, given the nature of deploying the infrastructure, mistakes are very costly, hence optimization and best practices transfer are the third part of our scalability approach.

To achieve economies of scale, we have established a global company that is in charge of the global aspects of our business such as relationships with automotive manufacturers, battery manufacturers, our global brand, R&D, etc. These are functions in which we can favorably leverage purchasing power and expertise to the benefit of the entire organization.

In turn, for replicability, we establish a subsidiary (Operating Company or OpCo) in each of our markets. The OpCo is in charge of the local go-to-market strategy and execution, as their local expertise, connections and market knowledge make them best equipped to understand and address the local market dynamics. These teams take our most updated approach and implement it given the specific market conditions. And all of this while leveraging the global organization’s economies of scale.

The abovementioned approach might seem similar to other models already being practiced in other places. This is true, however from the deep research we have conducted, we know that what really differentiates Better Place is how we go about implementing this model. What is unique about our implementation is the combination of our organizational approach and expertise-sharing mechanisms.

Organizational approach: to ensure that all of the OpCos aim along the same overarching vector and to maintain a common culture, we established a dedicated team called “OpCo Enablement,” entrusted with the relationship between the global company and OpCos around the world. In this team, we serve OpCos as a conduit to the global organization and provide the global office with a portfolio view of our OpCos. This team’s account managers lead cross-functional groups from within the global organization to engage with the local OpCos on aspects ranging from go-to-market design to detailed project implementation. At the same time, these cross-functional teams are the carriers of our collective expertise to the OpCos, which leads me to the next aspect: expertise-sharing mechanisms.

While developing expertise in rolling out infrastructure and services, OpCos are equipped with our expertise sharing mechanism, internally coined as Better-in-a-Box, to relate emerging best practices across the global organization quickly and efficiently. This mechanism ensures that all regions around the world have real-time access to the latest and greatest internal company thought processes, methodologies and tools, regardless of where they originated, and that newly formed OpCos have instant access to the cumulative knowledge of all others that have come before them.

An example of how this mechanism works is the deployment methodology that we have developed to roll out our solution infrastructure. As lessons are learned in one region about key deployment elements and nuances, the company gains valuable insights, expertise and competitive advantages that are captured as best practices and quickly leveraged in other regions. This deployment methodology was created in place during our initial deployments in Denmark and Israel and has since paid significant dividends in terms of increasing operational efficiencies and reducing cost in our deployments in other regions. Better-in-a Box has now been implemented across a full spectrum of functional areas that will similarly benefit from sharing best practices

For me, Better Place, with its inspiring mission and ambitious goals, is an example of the new era corporation, one that requires scale and agility more than ever. Driving the right balance between the two requires the right strategy but, more than that, ruthless execution. This is what we are focusing on every day.

Exciting times are ahead, we’ll learn more as we go, and we’ll be happy to share our philosophies and practices with the world as they develop.

I’m thoroughly heartened when I read statements from Big Oil about the “many barriers” that must be overcome before electrons can make a significant dent in a mobility sector dominated by petroleum. Heartened because as recently as two years ago I would have been hard pressed to find any commentary at all from the oil majors about transport electrification. Back then, the tune was all about the prospects for second generation biofuels and the supposed holy grail that is hydrogen. But today, barely an eyebrow is raised when senior executives from the likes of ExxonMobil or Shell claim that electric cars hold genuine future promise, but not before we decarbonise the power supply. In other words: “You EV guys are very well meaning – and we wish you well – but until the world stops burning coal, allow motor manufacturers to continue tinkering with incremental efficiency gains while we drill, baby, spill!”.

The decarbonised grid storyline is becoming the new conventional wisdom. And like much conventional wisdom, when examined closely it turns out to be patent nonsense, though on the surface it appears reasonable. We begin to understand why it is flawed when we examine what I call the Four Truths that we can hold to be self-evident. They hold whenever we elect to set fire to carbon-based fuels in order to benefit from motorised kilometres:

(1) Large is better than small

- Megawatt (MW) scale plants are able to run hotter, therefore more efficiently, than the kilowatt (kW) scale engines that power motor cars. This truth has its roots firmly in the basic laws of thermodynamics, which are not subject to revision.

(2) Constant load is better than variable load

- Combustion facilities have an optimal operating efficiency that is achievable more or less continuously in a power plant. In vehicles, the engine speed is seldom constant, as it is dictated by the variable driving conditions.

(3) Stationary is better than mobile

- In practical terms it is far easier to manage, collect, and process combustion emissions from stationary plants than from mobile vehicle tailpipes.

(4) Few is better than many

- The greater the number of emissions sources, the harder it becomes to do anything about them.

Notice that truths (1) and (2) relate to energy efficiency, while (3) and (4) are all about emissions control – this is why (1) and (4) are not merely different ways of expressing the same point. And what should we conclude from these truths? It is better to burn fuel – be it coal, crude oil, natural gas, or biomass – in hundreds of large, stationary power plants running at constant speed rather than millions of small, mobile internal combustion engines running variably. Put differently, all else being equal electricity beats liquid fuels on energy efficiency and emissions control.

The real killer for Big Oil is that for years we’ve been led to believe that petroleum was too valuable to turn into electricity. It’s true only if your core business is shackled to the liquid transport fuel paradigm. From an energy efficiency, energy security and environmental perspective, crude oil is far too valuable to waste in automobiles. The same goes for coal, natural gas, and biomass. Biofuels – the tenuous lifeline of the liquid fuel company – break against the rocks here. Far better to convert the biomass into heat and electricity to displace dirty coal.

So back to the conventional wisdom. Let’s imagine a world in which 100% of our primary energy comes from fossil fuels. Electric mobility wins, hands down. But of course, we don’t live in such a world. The world we live in has a steadily decarbonising electricity supply, while oil majors are forced to exploit ever-more exotic and energy-intensive forms of black gold. They’ll have a helluva job making diesel or gasoline from wind turbines and solar panels.

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Dr. Gary Kendall is Executive Director at SustainAbility, a hybrid consultancy and think tank with offices in the US, UK and India. He is also author of Plugged In: The End of the Oil Age.

Today, there is hope that this is about to change.

Democratic and Republican members of the House and the Senate just introduced the Electric Vehicle Deployment Act (EVDA), a plan to speed mass adoption of zero-oil, zero-emission electric vehicles, and to put the U.S. into the global race for sustainable transportation.

Automobile companies around the world are calling electrification of the light-duty vehicle fleet “inevitable.” Countries like China and France are aggressively directing policy to take advantage of what they see as an opportunity to do more than reduce their emissions and dependence on oil, but to capture an enormous economic prize. Now, U.S. policymakers have showed up late to the party – but not yet too late for them to lead.

The bill, introduced by Senators Dorgan (D-ND), Alexander (R-TN), Merkley (D-OR), and Representatives Markey (D-MA) and Biggert (R-IL), seeks to accelerate EV adoption by allowing regions to compete for federal funding to build out model EV ecosystems, including infrastructure deployment and consumer incentives to switch to EVs.

One of the most laudable elements of the bill is its recognition of the multidisciplinary approach required to lead the EV revolution. The “ABCs” of electrification are Automobiles, Batteries and Charging networks – but with relatively low gas prices making dirty driving cheaper in the U.S. than most places in the world, these must also be accompanied by “D” – driving consumer Demand.

Policy has an important role to play in the development of the “EV ecosystem,” the combination of automakers, electric utilities, third-party operators, and consumers that produce, service and drive EVs. The right mix of policy prescriptions can create the necessary conditions for the inception, growth and eventual incumbency of this ecosystem. The wrong mix could result in a temporary surge of EV connectivity, followed by a long period of EV inactivity.

Conceiving the right policy mix starts with considering the binding constraints that inhibit both the inception and growth of the EV ecosystem. In our view, these are (1) cost of EV batteries, (2) technological risk of owning EV batteries, and (3) EV range limitation.

The right approach to relaxing these constraints is simple, but it is not simplistic. The constraints have to be viewed as an interrelated package to be solved by a system, not a list of problems to be solved independently.

For example, consumer incentives (e.g., tax credits, cash rebates, etc.) will be key to driving adoption by relaxing the EV battery cost constraint, but it is unknown how long political support will be there to keep the incentives in place. Supporting deployment of EV charging infrastructure will be key to adoption as well, but it is not sufficient to relax perhaps the most critical constraint to EV adoption: range limitation. All the charging stations in the world cannot solve the problem of how to drive an EV from San Francisco to Los Angeles without spending an inordinate amount of time on “refueling.”

The system that solves this package of problems involves separating the battery from the vehicle (relaxing constraints 1 and 2) and enabling instant range extension through automated battery switch (relaxing constraint 3). This system makes EVs both affordable and convenient, and is possible only through a 3rd party operator that manages an inventory of batteries, manages a charging network, and coordinates with utilities to optimize energy use.

We’ve seen the global automakers make a strong commitment to electric cars, and as a country we’ve made big bets on battery innovation. But infrastructure has been the missing piece of the puzzle. One laudable element of the EVDA is that it represents a technology-neutral approach focused on deployment, recognizing that we have the technologies today to go electric. The bill also recognizes the role of third party operators in enabling a systemic approach to overcoming barriers to EV adoption, such as range, price and convenience – ultimately creating the best conditions for broad EV adoption.

By making policy advancements around a national electrification strategy, Congress is helping to strengthen the U.S. position in the global shift to electric cars. If adopted, this legislation will help send a clear signal to the world that the U.S. is taking the lead in the electrification of transport.

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See related: Better Place Applauds Bipartisan Effort to put US into the Global EV Race

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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After all the visitors had gone home one day, the venue closed its doors, lights went down, and the 2 million square foot venue was full of display cars blanketed with their protective covers. Amid this serene backdrop, Chery’s booth including the Better Place corner was in full swing for a special event.

As we recently announced, Better Place and Chery signed a memorandum of understanding to collaborate on technology for switchable-battery electric cars. Chery’s Vice President for New Energy Vehicles, Dr. Yuan, has been following Better Place for the past couple of years, and concluded that developing electric cars to operate on a battery switch platform would ultimately deliver the greatest value to consumers.

Chery is a fascinating company – aside from being one of the fastest growing automakers in the world, it is China’s largest independent automaker. Chery is proudly indigenous, relying on its continuously developing in-house engineering expertise to build the next generation of automobiles that are both world-class and environmentally sustainable.

Chery is based in Anhui Province, home to 61 million people. Hefei, its capital, has approximately 5 million people and is one of China’s 13 pilot cities subject to a mandate for integration of alternative fuel vehicles into their fleets. Attached to the mandate is a USD $8,800 rebate for fully electric cars used as taxis or other commercial fleets. And this is just a precursor of a much broader suite of pro-EV policies in the pipeline.

Better Place is now working with Chery to meet the emerging demand for affordable electric cars in the world’s largest auto market. The model for switchable-battery electric cars was displayed in China for the first time at the Chery booth, and it was received favorably by the private and public sectors alike.

The handful of VIPs visiting the booth for the after hours showing included China’s Vice Premier, Zhang Deijang, and the Mayor of Beijing, Guo Jinlong. The Mayor, who had previously served three major posts in Chery’s home province of Anhui, was delighted to see the company introduce Better Place to China at the auto show in Beijing. He said to us, “I think this is the most sensible model for an EV. I highly appreciate you guys bringing it here.”

With the rapid emergence of China’s automotive market – and the expectation that it will grow exponentially in the next few years – we predict that many standards for the automotive industry will be set in China. For Better Place, China is not only a strategic market vis-à-vis its size, but it is both a leading indicator and a trendsetter in the global race to sustainable transportation, and will have significant impact around the world. For all of these reasons, we’re happy to be here, and we see plenty more big developments on the horizon.

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Around the world, there is a growing tide of governments getting serious about going electric. Two examples are our recent progress in China and Japan. Other examples include France, China and Germany (among others), which have all made public-private partnership commitments to lead in mass-scale production and deployment of electric vehicles (EVs). The shift to electrification in these countries will happen in a disruptive way, and will reshuffle the deck on leadership in cars and energy. Whoever wins may win the century.

The primary motivation for each country may differ – from oil independence, to building globally dominant automotive industries, to integrating large amounts of renewable energy resources into the grid. But the conclusion is the same: electrification enables all of these benefits if it is done at scale; to do it at scale, government must adequately engage.

For the U.S., that means making a national commitment to electrification and the policy to support it on a mass scale. This starts with setting an explicit goal for the U.S. to become the global leader in the EV market, and backing it up with meaningful investment in regional EV ecosystems to enable consumer adoption. If this is done, the U.S. would create 2 million new and permanent jobs by 2030. (1)

While the U.S. is falling behind in the race, it can still turn around and lead this transition. In fact, it must do so to justify the $2B investment that the U.S. has already made in batteries alone through the stimulus package. According to Johnson Controls, if the U.S. doesn’t create a robust domestic market for EVs over the next five years, it will see excess battery manufacturing capacity of 62%.

In a world in which the global car park is forecast to double over the next 20 years, there is no reason the U.S. auto industry should fall behind or downsize. In fact, countries that lead this transition will be positioned for a lion’s share of the benefit.

For example, China has made electrification a national priority, setting an industrial policy to be the world’s #1 producer of EVs, starting with a 13-city demonstration. By using incentives to accelerate the domestic market for EV uptake, China has the potential not only to leapfrog the combustion engine at home, but also to position its automotive industry for global leadership.

If there are any doubts about China’s potential for winning this race, consider what is happening in other cleantech segments: China has grown its global market share in solar from 2% to 40%, while in the same timeframe the U.S. has moved from over 40% down to 16%. And in the last year, China’s investment in clean energy was nearly double that of the U.S., according to the Pew Charitable Trust, totaling $34.6B vs. $18.6B respectively.

So, while the U.S. stimulus package made an initial investment in battery technology and automotive retooling, during the same time much of the rest of the world began to move in a faster and more comprehensive way to lead in vehicle electrification.

We all know why it is imperative that the U.S. addresses its dependence on oil. The only question is – will the U.S. lead this transition or will it lag behind other countries in capitalizing on this opportunity?

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(1) Economic Impact of the Electrification Roadmap, Electrification Coalition

How clean is the taxi? What kind of music is playing? Does the driver speak English? Is the driver honest about the route? Does the driver put on a hard sell for a tip? Is the driver talking on a cell phone the whole time, or engaging me in conversation? We are all impacted by these stimuli whether we realize it or not, and our experience in the taxi sets the stage for our broader experience for the trip.

Having ridden in taxis all over the world, I can say unequivocally that Japanese taxis are the cleanest and most modern, and the drivers are the most polite and service-oriented. The taxi experience here is very consistent with the rest of the experience a visitor would have in Japan.

Now imagine if the taxis had zero emissions. It’s a very effective message to send to a new visitor to our country, and it dovetails perfectly with the culture of cleanliness and excellent service that already characterizes our taxis.

There have already been attempts to electrify taxis in Japan via fixed-battery EVs. These efforts have not taken off because of the fundamental limitations of EV range: after driving for half a day, the taxis have to be retired for their batteries to either cool or recharge. Given this limitation, you simply can’t make a business model around a fixed-battery taxi.

This is why we are introducing switchable-battery electric taxis into the marketplace today. The taxis developed for this demonstration are able to drive through our battery switch station, exchanging a depleted battery for a fully charged one in less time than it takes to fill a tank with fuel. This allows the EVs to run continuously, which is an absolute necessity for taxis.

As of today, we have switchable-battery electric taxis transporting passengers in Tokyo. This is a major accomplishment in terms of promoting environmental sustainability, but it also demonstrates how electric taxis can be made economical (and, therefore, sustainable) in the long run.

Just three days ago, I had a chance to meet with a dozen drivers from Nihon Kotsu, the largest taxi operator in Japan and our partner in this project that is operating the electric taxis. The drivers are very professional, young and energetic, and they are so excited to be the very first switchable-battery EV taxi drivers. They know that visitors from around the world are going to get into their taxis and inevitably ask, “So, what is it like to drive one of these?” Their response is going to determine how people perceive EVs, and they are psyched to know that they’re in the spotlight!

I predict that major cities around the world will embrace switchable-battery electric taxis, creating a groundswell of interest and support that will influence automakers to produce world-class vehicles to meet this market need. Seeing the electric taxis operate perfectly here in Tokyo today, I must say that the future looks bright from where we stand.

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The article questioned whether the electric vehicle (EV) hype had outrun reality, as range limitations continued to haunt potential buyers, purchase prices seemed too high, almost no charging infrastructure had been built, and a highly anticipated EV was received by the market with diminutive sales.

Despite these challenges, some pundits forged ahead predicting success of EV adoption in China. Already anxious about the environmental implications of China’s rapidly-growing economy, many voiced new concerns about the specter of a gasoline-powered transport system and its attendant emissions, concluding that China would have no choice but to embrace the EV. The graph below shows a projection of passenger vehicle growth in China based on the 1997 to 2007 28.3% CAGR carried out to 2017 at constant growth. This rapid increase of vehicles in China indeed raises big questions about how they will be powered in the future.

Projected Passenger Vehicle Growth in China (source: The Oil Drum, 2010)

Now, as we navigate through this unfolding history, China’s EV future is starting to come into focus. The Chinese government has enacted a suite of pro-EV policies related to both EV production and consumption. These policies include purchase and technology development incentives, as well as vehicle pilot requirements. These incentives will help drive the central government’s national goal of achieving production capacity of 500,000 “new energy vehicles” by 2011, including EVs, hybrids and fuel cell vehicles. This policy package is considered one of the strongest in the world.

Furthermore, there is now emerging recognition from the Chinese energy sector and government that battery switch is the most viable solution for accelerating EV adoption by reducing cost of EV ownership and minimizing the impact of increased electricity demand on the grid. And right now at Auto China 2010, we are seeing an even greater focus on EVs relative to the last show. It’s exciting to see Chinese automakers unveiling switchable battery technology in their EV offerings, especially since Better Place is working with multiple Chinese automakers on this front.

As the domestic demand for autos continues to grow, China faces the significant challenge of overcoming the barriers to adoption of EVs. Furthermore, China is striving to increase its renewable energy penetration to support this inevitable EV increase. Better Place’s coordinated system management of EVs can provide significant opportunities for China to optimize its energy generation assets while integrating renewable energy, reducing emissions, increasing system efficiency and enhancing revenue. Please see our new Chinese website for more information.

Just as it leapfrogged landlines, going directly from no phones to cell phones, China has the opportunity to leapfrog the gasoline car, going straight to EVs. With its emerging focus on the switchable battery, we know they’ll get there fast.

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(1) China Association of Automobile Manufacturers