Posted on 06/15/2013 5:25:49 AM PDT by Kaslin
By all accounts, Shai Agassi, the founder and CEO of Better Place, Israel's bankrupt electric car company, is an extremely charismatic man. His charm had politicians, venture capitalists, celebrities and non-automotive industry reporters slobbering over him. Everyone wanted to get their picture taken with the man who would transform Israel's auto industry into the first electric powered industry in the world and transform the start-up nation into the transportation hothouse for the world.
Agassi's vision was simple and easy to understand.
By 2020, half of Israel's cars would be battery powered electric cars supplied by his company, Better Place. We would replace our internal combustion engines, powered by oil produced by our worst enemies, with batteries produced by Better Place. Better Place would overcome the technological deficits of batteries that are only capable of powering a car for short distances by building battery changing stations throughout the country. Instead of filling up our tanks with gas, we would replace our battery.
And our enemies would go bankrupt.
The only ones not convinced by Agassi's plans were people who actually understand the car market generally and the Israeli car market in particular.
Automotive industry reporters warned as early as 2008 that Israeli drivers would need incentives to buy into a new technology. Cars in Israel are prohibitively expensive. The government charges 82 percent customs duties on imported cars. If electric cars could be cheap cars, then they had a chance of succeeding.
To help Better Place succeed, the government gave the company a massive discount on import taxes. Better Place, which signed a deal with Renault to produce a battery-charged model of the Fluence family car, paid only 10% import duties for the car.
Instead of passing the savings off on its customers, Better Place cars cost the same amount as regular gasoline powered cars. And that's not including the cost of the battery or the monthly subscription to Better Place battery charging services.
So there was no economic incentive to buy the car.
Many have chalked the failure of Better Place up to its poor management. And no doubt Agassi's management skills didn't hold a candle to his skill as a salesman. The company's business model was an incoherent study in overreach and hubris.
But the fact remains, the car was too expensive.
And that makes some sense. Building a whole national infrastructure for electric cars is expensive.
The only incentives Better Place gave consumers were ideological. And as it worked out, only 900 people were willing to pay full price to own a car whose actual battery life was between 100 and 120 kilometers, just to reduce their carbon footprint or to screw the Arabs.
To summarize, the government gave Better Place a massive tax break. Investors poured $840 million into the company. The media showered the company in fabulous free PR.
And in four years, it only managed to sell 900 cars.
That tells you something about economics. The iron rule of supply and demand is foolproof. If the price is too high, people won't buy your product. And if the ticket price of being a pioneer in a risky market is the same as the price of a normal car, then no one will want to be a pioneer. And no one did.
Indeed, according to Channel 2, more than a hundred of the 900 owners of Better Place cars worked for the company. And the majority of the other owners purchased the electric car as a second or third car.
People warn that Better Place's failure will harm the reputation of Israel's high-tech economy. But these warnings make little sense. Better Place wasn't a high-tech firm. It was an electric car company. And it wasn't selling new technology.
It simply packaged old failed technology in a new way.
Israel needs to fully exploit it oil and gas resources.
Has any "visionary" of electric cars for the masses been as visionary on the disposal of the millions of batteries that the first vision would necessitate? Then too, it seems that this "vision" would result in a transportation infrastructure that would be heavily dependent upon government regulated energy: electricity, which they're already engineering the rationing of. The "vision" is a bad one for everyone except promoters and politicians - Dream Merchants.
Oh, sure, you could probably have a generator of your own to charge the batteries in your little Smart-car, but how will you do that when gasoline and diesel are no longer produced, and "natural gas" has become as expensive as gold? How far will cooking oil and your family's excrement carry you?
What is more "efficient":Mea culpa.aboutconverting fossil fuel to electricity and then converting that to kinetic energy, or converting fossil fuel directly to kinetic energy?
The former. Internal combustion engines are about 18-20% efficient; the vast majority of the chemical energy in the fuel is converted not into kinetic energy, but into waste heat. That number goes down in high-traffic areas; an idling car is 0% efficient.
In power generation, the heat is the whole point. The most efficient natural gas power plants run about 55% efficiency, petroleum plants about 40%, and the grid is better than 90% efficient. The vehicles themselves are about 80% efficient. .55 * .9 * .8 = .396, nearly 40% efficiency, double that of internal combustion engines.
As an energy source, few things distribute as efficiently as liquid fossil fuels.
Those weren't investors. {*snicker*}
Hydrocarbons have an extremely high energy density. So high that they’re still an effective way of powering motor vehicles even with the vast majority of that energy going to waste. Gasoline engines are not efficient, but gasoline is highly portable.
Don’t take my word for it. Do your own research. Electric vehicles are far more efficient. The barriers to wider adoption are range and cost.
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