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Solving the electric car conundrum

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An electric plug replaces the gas
An electric plug replaces where the gas normally goes on Better Place's electric car model.
Courtesy of Better Place

The company calls itself Better Place

With an initial investment of $200 million, Better Place has wrangled contracts with Israel, Denmark, Australia, Hawaii, and the San Francisco Bay Area, to build charging stations for electric cars.

The company's Jeff Miller was at the University of Minnesota today to explain how it'll work.  The business model,  he says, is the same as for cell phones.  With your cell phone, you pay for minutes; with an electric car, you'd pay for miles. 

"And that'll look like a monthly contract, much like you have with your cell phone operator.  And that includes a number of things.  It includes the electricity that goes into the battery, the cost of battery that you swap in and out of your cars, it goes to the service we provide so you can pick up phone and if you have a problem we come and help you.  So it's a full range of service that we charge on per-mile basis." 

Here's how the Better Place model would work.

Better Place's electric car model
An electric car by Better Place.
Courtesy of Better Place

You'd buy a car with a lithium ion battery that can take you 100 miles.  You'd be able to plug it in at home, at work, in lots of places around town.  Chargers would be set up like parking meters.

And then, when you wanted to go on a longer trip, there would be gas stations where you could exchange your battery for a fresh one.

The goal is to make the cost the same or cheaper than a gas-powered car, Jeff Miller says.

"When you walk into the showroom, and you can buy the same car that either has a tailpipe or not, we think it should cost you the same or less to drive a clean electric car."

That probably depends on government subsidies, at least for awhile.  In Denmark and Israel, the government is offering dramatic tax reductions for electric cars, making them more affordable.

Renault-Nissan already makes an electric car, and Better Place is feverishly talking with car makers around the world to try to set a standard for the battery, so the company could service any make of electric car.

Better Place's electric car stops for a charge
Better Place's electric car stops for a charge.
Courtesy of Better Place

Environmental groups like electric cars because when they're charged with renewable energy like wind or solar, they dramatically reduce greenhouse gas emissions.  Cars and trucks accounts for a quarter of Minnesota's carbon footprint.  

With new technologies being installed on the electric grid, eventually electric cars could even serve as power stations, charging up at night and feeding electricity back to the grid during the day.

David Morris, a vice president of the Institute for Local Self Reliance, an environmental group in Minneapolis is excited about the Better Place approach.

"What they are doing is saying to the large American automobile companies, 'We will have this market and this infrastructure; you either decide now that you're going to plug into this infrastructure or you're going to be left behind.'"

The Legislature will be discussing lots of energy issues this winter. Sen. Scott Dibble, DFL-Minneapolis, serves on the transportation committee, and he put together today's meeting.  His goal is to make Minnesota ready for new ideas like electric cars.  

That might mean setting up so-called 'fee-bates' -- differential taxes on cars depending on their fuel efficiency.

The demand for renewable energy from a company like Better Place would help utilities meet the state's renewable power mandates, by providing capital, he says.

"It looks like things are moving very quickly in eastern Australia, in Israel, Denmark, Australia, Hawaii, the Bay Area of California.  I anticipate if we send a signal that Minnesota is ready, the private market will come in fairly quickly.  I think that can happen with a couple years."

One possible signal would be the conversion of St. Paul's Ford plant, into a facility to make electric vehicles, as some environmentalists and politicans have suggested.  On the national level, the auto industry bailout is likely to require a commitment to smaller and alternative fuel vehicles like electric cars