A company named Better Place has a better idea about car ownership in a post-oil world.
Here’s the concept:
You pay for the electric vehicle (like the Renault-Nissan Rogue shown above) .
They pay for (and own) the $11,000 battery. And the network of charging stations. And the switching stations where customers can swap their nearly empty battery for a full one on long trips.
Under this scenario, you’ll buy the car in the usual way. But all the costs associated with powering the vehicle will come in the form of a pay-per-mile contract. The concept is familiar to anyone who has a pay-per-minute cell phone contract. The cost to the consumer pencils out at a point well below what gasoline-powered drivers currently pay.
(Last December, Better Place has forged a partnership under Hawaii’s Clean Energy Initiative, to help the state meet its goal of getting 70% of its energy from renewable sources, including solar, by 2030.)
The difference increases with the inevitable rise in the price of oil. EV operation becomes even more attractive compared to gasoline-powered cars with a decline in the cost of electricity. That’s based, in part, on technological improvements that make batteries more efficient.
A study by the University of California released yesterday forecasts a bright future for this business model. Under the plan, researchers believe that EVs will account for as much as 86% of all new car sales in the US in just two decades. (The low end figure for their model is 64% of all new domestic light vehicles.)
“Separating the purchase of the battery from the car,” the study found, “and incorporating its financing into a service contract that pays for the electricity and charging infrastructure radically changes the pricing possibilities for electric vehicles.”
Car buyers are more likely to choose EVs if their concerns about battery life and cost are removed from the decision, the study found.
According to the study, other key benefits of adopting EVs at this scale include:
- A decrease in oil imports of between 18-38%.
- A reduction of the US trade deficit by a third.
- A net increase of as many as 350,000 new jobs.
- Health care saving of between $105-$210 million based on lower levels of airborne pollutants.
- A 69% decline in CO2 emissions — if the electricity to charge the batteries comes from renewable, clean sources such as solar or wind.
With the aid of $45 million from the state of Hawaii, Better Place is already installing charging stations in key areas of the islands. The company also plans on building a billion dollar charging infrastructure throughout the San Francisco Bay area.
Battery development is a burgeoning field in its own right. The Japanese company, A123, announced plans to produce the kind of Lithium-ion battery used by EVs at a new $2 billion facility in Michigan.