Electric cars have a problem: current battery technology is too expensive to allow for widespread adoption. Better Placehas a solution. The California-based company, founded in 2007, is proposing a radically different transportation model. Better Place essentially leases batteries. Customers pay for the cost of the electric vehicle minus the battery, which should then be priced more in line with gasoline-powered vehicles. Customers then subscribe to Better Place and purchase electricity as needed from the companys charging stations. The company likes to describe the service model as akin to buying minutes for a cell phone. In addition, Better Place will build charging spots, battery exchange stations, and provide software to tell drivers the location of said stations. ( More detail here.)
The company plans to roll out over the next few years in Israel, Denmark, Hawaii and California. Canada is on that list, too. Better Place and the government of Ontario announcedin January the two will partner to build electric car infrastructure in Toronto, although by when and at what scale is not clear. Not much was actually agreed upon in January, aside from a commitment to explore the opportunity.
A lot more needs to be done. A manufacturer needs to sign on, for one. (In Israel, Better Place recruited Renault-Nissan to produce EVs.) Government also needs to make some kind of financial commitment. EVs are less attractive here than in places like Israel and Denmark where drivers already pay around twice as much for fuel, which means incentives are needed to encourage faster adoption.
The province will release a report in May outlining how it can do just that. I sat down with Sean Harrington, head of global development for Better Place, when he was in Toronto recently to find out what kind of policy measures the company is looking for. Some excerpts:
What have other governments done to encourage adoption?
Governments around the world are using different policy tools. For some, its about buying electric cars for its fleets, and certainly thats a great way for government to show leadership. For others, its giving electric vehicles access to HOV lanes, even if theres no more than one person in the car. Providing incentives to consumers, clearly thats one of the biggest ones. You see the U.S. with their tax credit, up to $7,500 on the first 200,000 battery electric vehicles per manufacturer.
What about in Israel, where youre launching first?
In Israel, theres a 72% tax on gas cars and a 10% tax on electric vehicles. So theres a 62% difference. The moment you walk into the dealership, youve got a significant incentive. In addition, youve got high taxation on gasoline. Its generally one-and-a-half to two times the price of gasoline here in Canada.
So isn’t it a tougher sell here than elsewhere because of that?
Absolutely. And were not saying the government of Ontario has to use those tools, but if you look at other jurisdictions, thats what theyve done. In Denmark, its more significant. Theres a tax on gas cars of 140% to 180%, depending on the size of the engine, and zero percent on EVs.
Is there anything specific youd like to see from the Ontario government?
The idea is that Ontario has to decide whats best for Ontario. What were talking to government about is not Better Place-specific. Its about creating an attractive market place for electric vehicles. We just encourage any government partner to act boldly, and the bolder they act, the more quickly theyre going to be able to make that transition.
How much depends on the government’s report to be released in May?
What the release in May does is it determines how fast things will roll out. It affects the pace of consumer adoption. If it’s significant, and you provide a bigger rebate on electric vehicles, or on batteries, or provide bigger tax exemptions, the faster things are going to happen here in Ontario. And well plan accordingly based on that.
It’s difficult to see the Ontario government acting as aggressively as those in other jurisdictions. The motivation is just not as strong. Israel is an oil importer surrounded by hostile neighbours. Denmark has long been a leader in clean energy and its zero percent tax on EVs was established before Better Place came along. Hawaii is an isolated oil importer as well, and California’s reputation as a kind of clean tech Shangri-La is well known.
What about Ontario? Certainly the desire to reinvigorate the manufacturing sector and provide jobs is strong, and EVs can also serve as energy storage for renewable power, but beyond that there is really only the environmental incentive. Ontario is making a big show of its commitment to the environment with its proposed Green Energy Act, which indicates it could act equally boldy when it comes to EVs. But we’ll have to wait until next month to find out just how far the government will go.