"Battery Swapping Bust: Electric Car Company Better Place Shuts Down"
Israeli tech company Better Place announced plans on Sunday “to liquidate after burning through almost a billion dollars.”
This happened despite the fact that demand for electric vehicles is growing steadily because of improving battery technology, high oil prices and increasing concern over pollution.
The Washington Post says this shut down “capped a stunning fall from grace for Better Place and its founder,” Shai Agassi, “a former high-tech whiz kid who sought to change the world by building a revolutionary network of battery-swapping stations.”
Well, I don’t really know how “stunning” it is. Yes, lots of people put money into the company — but a lot of experts on alternative-fueled vehicles and electric cars had big doubts this business model made any sense. See my February 2009 post, “Does anyone think battery swap out is useful or even needed for electric vehicles?”
Since one can legitimately ask why one would go to all the trouble of blogging for nearly 7 (!) years if not to have the chance to say I told you so once in a while, I will excerpt that post:
I recently asked my EV wonk friends what they thought of the battery swap out model, and I will reprint some of their answers below. I have never actually found anyone who thought it was a viable idea. Where, for instance, would it be done? Sunday’s NY Times (2/1/09) asserts: “For longer trips, beyond 100 miles, there would be battery-exchange sites — probably located at bays in today’s gas stations.”
Sorry. At least in this country, gas stations are very prime property. They don’t have any excess space for what would be a relatively little-used piece of capital, an automated battery swap out station. That’s why in pretty much every city gas stations are shutting down little-used garages and bays and putting in mini-marts.
Here are some more detailed critiques from 4 years ago, which help explain why Better Place went belly up even though many electric vehicles, like the Tesla, are doing just fine in the market today:
Greg Hanssen, co-founder of EDrive Systems, commmercializing Lithium-Ion conversions of PRIUS. Also co-founder, EnergyCS, engineer with long experience in hybrid, electric power systems, and co-chair of Production EV Drivers Coalition
Personally, I think the battery swap idea is really dumb.
It’s people who don’t have any experience with electric vehicles that come up with ideas like this and hyper fast charging, which is also relatively unpractical as it’ll never be as fast as liquid refuel and will be expensive and hard on the batteries.
As for battery swapping, check how this was done with EVs in the early 1900s. Edison’s fleet of electric trucks had central stations where batteries were charged and swapped… Check out the book “The Electric Vehicle and Burden of History”
If fast refueling is your goal, then PHEVs [plug-in hybrid electric vehicles] are still the best option. Use the battery for what it’s good for — daily driving needs that can be filled with overnight charging.
For longer distances or fast refueling, liquid is still the way to go.
Before it went belly up, Plenty magazine’s blog raised a couple of issues:
• wait, uh, battery swaps? What quality controls will be in place to make sure the battery that’s getting plopped into your car is in great condition and just as good as the one you got from the manufacturer and are now giving up? And imagine how many batteries would have to be in stock at each charging station to make sure that any driver will be able to drive off ready and charged. Sounds pricey.
• Doesn’t it all sound like a bit of a hassle? The project is an attempt to remedy an imperfect system. It can’t help but feel inelegant. Is the battery swap system superior to replacing every conventional vehicle in Hawaii with a plug-in hybrid? Plug-ins offer many of the same advantages without the massive infrastructure investment or the strange treatment of batteries as if they were luggage carts. For now, only two vehicles, made by Better Place partners Renault and Nissan, are expected to be compatible with the swapping stations, at least until other carmakers get on board. My bet is that it’ll take some convincing before several more EV makers agree to standardize their battery placement and vehicle designs for the sake of an unproven technology.
Long-time EV expert
Actually, our experience w the last generation of EVs (some of which remain on the road) taught us that unlike propane tanks, drivers very much feel personal ownership of their batteries, and would definitely have issues like the one described in the first point [made by Plenty]. You’re right that in the PBP model the customer doesn’t own the batteries, but the attachment has less to do with ownership and more to do with care and feeding — many drivers charge and drive their vehicles very specifically in order to maximize range, preserve life, etc. — and they become used to the specific performance of their pack. It’s exacerbated by the fact that there can actually be a fair amount of variation in quality of the pack before it falls out of manufacturer spec and would be replaced. Since this tends to manifest itself as range variation, it’s very possible a customer might swap a pack that does 100 miles and get one that only goes 80 or 90, or worse, has a bad module that causes the car to go into reduced performance or something. The people who do only average driving won’t really notice this, but the average drivers likely won’t be the ones depending on swapping stations. It may be that the early adopters are more attached to their packs than mass market customers will be, but the early adopters will last 2-3 years or more at currently expected rates of production, and their experiences will be the ones that set up the next folks’ expectations.
An engineer and utility EV expert
That is a solution for a problem that does not exist.
The concept of a third party owning the battery is a nice one. Has been for years, but no one will step up and do it (or, in reality it has not been economically feasible). However, the idea of having battery changing stations as a sort of “fuel” station is a particularly bad one. For one, it assumes that there is not possibly enough energy in the battery of the car to accommodate the driving needs of the owner. Statistics show that this is false for the vast majority (see National Travel Survey). People somehow always think they need to drive farther than they actually do.
Cars are parked 96% of the time. They can charge.
Battery changing is a messy, mechanically complicated, labor intensive process. That is why the industrial community has been moving away from this for years. Instead, they move toward fast charging, and even fuel cell power.
And, by the way, the first objection is not irrelevant. What if you got your battery swapped out expecting 100 miles of range to get to the next station, and it turned out to be a dud? Maintaining pack quality would be one of the major concerns with such an operation.
So, in conclusion, most people don’t need to swap batteries. There is plenty of range on board. For longer trips, you can either rent a gas car, or you could take advantage of a few fast charging stations that could be placed strategically on major long-distance thoroughfares. Or, of course, you could also choose to own a PHEV like the Chevy Volt, in which your engine is only used in extraordinary circumstances.
California official and alt fuel expert
1) Entropy matters. The energy used in bulk transport, bulk storage, and on-site logistics would be HUGE.
2) Volumetric specific density matters. The space requirements for bulk transport, bulk storage, and on-site logistics would be HUGE.
3) Gravimetric specific density matters. The weight penalties incurred in bulk transport, bulk storage, and on-site logistics would be HUGE.
4) Costs matter. The incremental costs of associated with 1, 2 + 3 above would be HUGE.
5) Competitiveness matters. The cost effectiveness of their technology needs to be compared to a post-2010 hybrid configuration using li ion or li polymer battery technology, achieving > 50 mpg, gasoline prices in the $2 — 6 range, with resulting paybacks on incremental investments of <$5,000 – $8,000 of between 5 and 12 years. The proposed technology would have (a) MUCH higher incremental costs to amortize 1 + 2 + 3 above, (b) have gge fuel economy no more than 2x higher than a benchmark hybrid, (c) resulting payback well in excess of 15 years or (d) require gasoline costs well north of $7 per gallon to achieve payback in 10 — 12 years.
6) This has less scrutiny than the Madoff Ponzi scheme at its half-life. Any serious sunshine brought on this “pathway” will show the following:
a. How desperate we still are for a Holy Grail solution, given the pragmatic realities of lithium battery costs and gravimetric / volumetric density tradeoffs.
b. How easy it is to foster web-germinated confusion on untested technologies
c. How hard it is in reality to configure, demonstrate, manufacture in bulk, and survive with a viable business for advanced alt fuel technologies.
d. How important it is to let the facts set us free from the curse of speculation.
e. How important OEMs are, despite all their imperfections.
7) This is already at its half life. When 1% greater scrutiny is applied to this “business model” and technology, it will wilt faster than California’s bond rating.
8) In other words, it fails due to its inability to create the following:
a. Credible industrial policy to establish a viable, large scale advanced battery manufacturing capability in North America (Asian OEMs produce >90% of lithium ion batteries today…)
b. Credible gasoline tax policy which establishes a consistent and clear price signal on carbon sufficient to allow alt fuel vehicle purchasers to face high degrees of certainty on payback of initial investments in either vehicle capital cost, infrastructure capital cost, or both.
c. Credible optimization via OEM expertise — especially hybridization optimization.
d. Credible infrastructure burden cost sharing to escape the 1st 10 years of the “Valley of Death” period during which alternatives fail due to slow broad market acceptance.
My bottom line back then is still my bottom line today:
Yes, the chicken and egg problem remains a huge one for specialized infrastructure like battery-swap out equipment. Who is going to cover the high capital costs in the beginning for widescale deployment of equipment that is little used? But who would buy the vehicles until the swapout system is in place?
More critiques can be found elsewhere on the web: Green Smoke and Mirrors: A Voice of Reason On Israel’s Electric Car Hype and A Reader Responds to Project Better Place Getting Wired.
For large countries in particular, I think plug-ins make the most sense for the foreseeable future.