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Shai Agassi's Plan to Get the World Off Oil

Posted Jun 08, 2009 02:00pm EDT by Sarah Lacy in Venture Capital, M and A, IPOs, Clean Tech

Back in 2006 Shai Agassi was at the top of his game. A programmer since the age of seven, he’d worked his way up the high-tech food chain, and at just 39-years-old he was next in-line to be software giant SAP’s co-CEO. Then, he shocked everyone by quitting to start a cleantech company from scratch. 

And it’s not just any cleantech company. Better Place —as it’s called—is aiming to get the entire world off gasoline. As ambitious as Elon Musk’s plan to build a luxury electric car is, in some ways Agassi is aiming for even more. He’s working to create an entire ecosystem that's not about getting 100 or even 1,000 electric cars on the road—but millions. Last week, we brought you an interview with venture capitalist Vinod Khosla who argued electric cars couldn’t scale. Agassi begs to differ.

Since most of the limitations and costs surrounding electric cars have to do with the batteries, Agassi’s plan is simply to detach the car from the battery. You own the car. You borrow the battery and pay by the mile. It’s like a cell phone.

He’s testing this ecosystem in his home country Israel, in Denmark and soon in Hawaii. Renault is building the cars, the countries are giving tax breaks to those who buy them, and Better Place is building a network of thousands of charging and battery replacement stations. So far he's raised hundreds of millions to accomplish all this.

We sat down with Agassi at Better Place’s Palo Alto headquarters, just before he hopped on one of his never-ending international flights, selling his mission around the world and monitoring its rollout. In this first segment, Agassi explains his grand vision and the bite-sized chunks he’s been taking to start making it a reality.

123 Comments

Yahoo! Finance User
Yahoo! Finance User - Monday June 08, 2009 02:15PM EDT

Fierce.

todd
todd - Monday June 08, 2009 02:24PM EDT

I hope he's succesfull. Like the space race of the 60-70's it could open up a new generation of development and industry. We need a new goal to chase to keep our focus off the debt to come.

CBW
CBW - Monday June 08, 2009 02:25PM EDT

How exactly does "borrowing" a battery make more sense than owning one? Seems to me that it would be more expensive! But that's OK because you'll get a tax break if you jump on the "green" bandwagon! No worries. Let's just keep forcing this crap down everyone's throat.

Thrift Maven
Thrift Maven - Monday June 08, 2009 02:26PM EDT

This sounds wonderful. A cell car. This guy needs to hook up with Cysco or Microsoft to make it happen here.

R
R - Monday June 08, 2009 02:29PM EDT

Sarah, you've got to stop going "uh huh" throughout your interviews. It's okay in conversation but not in an interview.

Yahoo! Finance User
Yahoo! Finance User - Monday June 08, 2009 02:30PM EDT

Paul L: If you don't understand the discussion, the least you can do is not resort to a personal attack, especially one involving comparison to a part of anatomy.

shags1_23
shags1_23 - Monday June 08, 2009 02:33PM EDT

Interesting idea, but that would mean a standardized battery form function. And that won't happen soon; look at VHS vs Betamax, HDDVD vs BluRay, hell even phonograph vs gramophone if you want to go back that far. So which battery is best? That's a huge argument unto itself: LiPo, NiMH, NiCad, Lead Acid (and even that has liquid, AGM, and Gel formats), Aluminum Oxide, and so forth. They all have their merits and drawbacks.

Chandra
Chandra - Monday June 08, 2009 02:36PM EDT

This is a great idea. We can get the cars cheap and pay for the battery as we use. Hope this will work.

Theodor G
Theodor G - Monday June 08, 2009 02:37PM EDT

An absolutely brilliant idea and I wish Agassi success. Now if we can just get the American mind turned around to see the present system of automobiles and personal transportation as the cause of so many of our financial, ecological and foreign relations problems it really is.

Ray
Ray - Monday June 08, 2009 02:43PM EDT

GM has this program right now. You lease the car and drive until it stops. Call On Star and roadside service will bring you a new battery.

Robert T
Robert T - Monday June 08, 2009 02:53PM EDT

Great idea. Addresses the real problems with electric vehicles.

t
t - Monday June 08, 2009 02:59PM EDT

she liked it when he talked about spending the money...made her feel sexy. Good luck to him. Oil mega price madness is coming back with a vengance as soon as a) any one part of the world comes out of recession or b) the dollar re-continues its long slide or c) both! In the last year sine $150 a barrel oil they haven't found any more. And 1.2bill Chinese and 0.8 bill Indians has not lost their lust for a western lifestyle....yer baby its a comming!

__A_YAHOO_USER__
__A_YAHOO_USER__ - Monday June 08, 2009 03:05PM EDT

Waste 'o time: MAKE GRASS ILLEGAL! The fuel wasted on cutting ALL of it is INSANE! Replace it with vegetables, problem solved! At the same time, you destroy the junkfood industry and Walmart. It might also help if kids were taught how to grow plants in school, instead of why "Heather has 2 mommies" and other nonsense.

Yahoo! Finance User
Yahoo! Finance User - Monday June 08, 2009 03:06PM EDT

Renting a battery would be more expensive, but it's much more expensive to have your oil changed at a service station than to change your own oil filters then cart it around finding a place to recycle it at.

__A_YAHOO_USER__
__A_YAHOO_USER__ - Monday June 08, 2009 03:06PM EDT

By GRASS, I mean "LAWNS". The most pointless waste of energy on the planet has to be the maintenance and "beautification" of your friggin' lawn!

- Monday June 08, 2009 03:10PM EDT

CBW, you DO own the battery. You own whatever battery is in your car at that time. This idea is actually beautiful in its simplicity. Agassi hasn't done anything here technology-wise, he simply envisions a different delivery system. Electric cars are only good for 50-150 miles per charge and then you have to plug it in again for 8 hours before you can resume your trip - obviously, that's not going to work if you're leaving Buffalo and driving to Boston so, by having "gas" stations with stacks of pre-charged batteries, instead of pulling in and filling up with gasoline, you simply swap out the battery (ies) and continue on your way. And, as shags1_23 points out, the batteries will HAVE to be the same across all car makes and models in order to achieve efficiencies of scale. The idea is, in my humble opinion, brilliant because it is so simple. However, I'd be remiss if I didn't state the obvious issue with electric cars that everyone seems to overlook, and that is... electric cars are green, right? Where does electricity come from? Electricity comes from burning coal (nuclear in limited amounts) so the cars themselves will be green but the demand on overall electrical production will require that a LOT MORE coal be burned to produce all this electricity and coal, last time I checked, emits a decent amount of smoke and noxious gases into the environment. So, is green really green? I don't have the answer but it would be nice to stop sending trillions of dollars per year to countries whose inhabitants want to use our own money to kill us.

Whit Chambers
Whit Chambers - Monday June 08, 2009 03:11PM EDT

Change = Giving to BS artists

__A_YAHOO_USER__
__A_YAHOO_USER__ - Monday June 08, 2009 03:14PM EDT

"Beta Country"??? More like "Masta Beta", guy! So what am I supposed to do: LEASE the damned battery? This sounds like MORE enslavement to me, no true freedom in the underlying agenda with this either! BUSINESS AS USUAL...

yattaboy
yattaboy - Monday June 08, 2009 03:15PM EDT

Some of you aren't getting it: Think BBQ propane-tank. Now replace "BBQ" with "CAR", and "propane tank" with the "battery". Make sense??

Yahoo! Finance User
Yahoo! Finance User - Monday June 08, 2009 03:15PM EDT

More than 50% of the electricity in this country comes from buring coal. "Clean Coal" is no where close to becoming a reality. (I repeat .. no where close) So the very good news is we can stop sending our $$ to petro dictators who want to kill Americans but with these cars the bad news is we really haven't helped the carbon problem much at all. We need clean car's and a clean energy source to power them.

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