A bolder investment

It is not everyday that a multi-millionaire soon to be government minister quits and moves on to head up an untried new innovation in the automotive sector. That happened in Victoria at the beginning of the year when Evan Thornley (of the LookSmart Thornleys) gave up being Minister for Industry and went to a Better Place.

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David Pogue just reported on the Better Place venture (see the video above or the interview link here). The idea is to get us cheap electric cars but duplicating the concept of the retail petrol network in the form of charging stations and battery swapping outlets. So instead of trying to ensure that the car itself can operate independently of having to recharge anywhere but the home, Better Place wants to make the electrons readily available just like petrol already is.

And then all this has to happen at a scale that is scary, to a certain degree. We need to be at 100,000 cars in 2011. About 100 million cars by 2016 to 2020. A thousand-times growth in production capacity and in installation capacity. There’s never been a project of this magnitude in history.

Economically, that makes sense but commercially that means you have to bet it all on the infrastructure investment. That is a bold move.

But apparently it is working out. Governments are helping out in a big way and by next year several contained systems will be available. They even have pricing plans that recognise that car purchase, financing and usage are all complements and so the payments for all of them can be spread around (e.g., commit to driving enough and you can have a free car).

The long-term danger is the traditional one: success followed by monopoly. The battery standards that make them removable will have to be adopted by car manufacturers and then their owners. But Better Place has realised this. They want government help in return for openness.

One of the things that we’ve done that is very interesting, unique for a first mover, is, every government we go in to, we ask for one thing: "Make sure that you build an open, standards-based network." So that we can’t lock any competitor out, and competitors can’t lock us out when they show up. We want to make it so that the networks are so open, that I can roam from my network to their network and back.

It is hard to see this as anything but a good way to go. You know if I am going to lose money on my savings, this seems a better place to do that.

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4 thoughts on “A bolder investment”

  1. The whole idea is nice, but the video doesn’t address the power generation.  Will these things ultimately be powered on brown coal? Solar? Wind? Nuclear?  How much power will they need?

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