Analysis of the Better Place Electric Car Scheme

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Table of Contents

Introduction
Analysis
Conclusion
References

Introduction

Better Place’s (BP) idea to roll out electric car charging points is a step in the right direction. Electric Vehicles (EVs) as offered through BP’s scheme are quite promising because most challenges associated with EVs have been addressed by the organisation. Prospects for future improvements are also quite high as indicated through current innovations.

Analysis

Energy sustainability

Environmental concerns have been the major reason behind the push for greener sources of energy on the roads. Electric vehicles are a possible solution to increased dependence of most countries on imported oil. Weaker economies have suffered as a result of their energy choices. Climate change concerns have also become a major preoccupation among the G8 and many other developed nations of the world (Lee & Lovellette, 2011).

Consumers have realized that they have a serious role to play in taking care of their environment. They now want to minimize their personal carbon impact and thus contribute towards a more sustainable environment. Electric motor vehicles appear to be a viable solution to this need in the long term and the short time. Better Place is contributing to this resolution through its innovative strategies. A number of EV opponents have argued that these cars are not that environmentally friendly owing to their long term green gas emissions.

These opponents believe that for electric vehicles to be energy efficient, they need to rely on green powered electric power plants. Some of them have cited examples of electric vehicles that rely on coal generated powered plants and have asserted that such vehicles would increase green house gas emissions by as much as twenty percent. Better Place has already realized this and has partnered with green electric power generators.

In countries such as Denmark, Better Place is collaborating with electricity generators who rely on wind. In Israel, the firm is working on solar powered electric generators. The company is looking for ways of offering an all-round approach to the sustainability problem. A lot is yet to be done in this realm though; more infrastructures will have to be built in Australia in order to support green electricity sources. This would give clients sufficient support even when markets expand.

It has been estimated that in the next nine years, the electric vehicle industry will minimise carbon based emissions by a whooping forty percent. This will be possible through inter-industry collaborations between power generators and electric vehicle providers like Better Place. (White, 2011)

Car performance issues

Better Place and other electric vehicle stakeholders have worked on the inefficiencies that had plagued the electric vehicle market in the past. Previously, there were concerns about the life of the EV battery. Most batteries had a short lifespan and needed to be recharged on a regular basis. Innovators responded to this challenge through creation of the Lithium ion batteries. These devices have proved to be more effective than previous trials because it is now possible to store more energy in the electric car (Better Place, 2011b).

Furthermore, it has been shown that the capacity of the Lithium ion battery is two times as high as previous models. A lot has changed in the past few years and if this battery innovation is anything to go by, electric vehicle performance will keep improving. All BP has to do is to focus on continuous innovation that will address any hurdles consumers may be facing.

Better Place was started with very noble intentions. Previously, electric car users needed to stop at electric charge points for long periods of time in order to get their batteries charged. Every time a driver uses an electric car, the battery is discharged. After a while, the battery will need to be recharged in order to power up the vehicle.

In older electric vehicle charging schemes, most clients needed to stop at electric charge points for long periods of time as the process took very long. However, Better Place dealt with this dilemma through the introduction of a battery swapping system. Instead of waiting for one’s battery to charge up, Better Place simply swaps the discharged car battery with a charged one. They have revolutionised the electric vehicle industry owing to convenience that they provide clients (Fung, 2011).

Electric cars are also quite attractive in terms of their performance. Most of them now go faster than the conventionally powered vehicles. This has been made possible by the good power-to-weight ratios prevalent in the latter vehicles types.

Faster acceleration can be attained at lower speeds in the electric vehicle than in petrol powered ones. As a result, the car feels smoother than the other kinds of vehicles. It is also important to note that electric vehicles make less noise than the other conventional vehicles, so they would lead to a better driving experience and cleaner environment.

In the past, car range issues were (and still continue to be) a huge challenge for all electric vehicle suppliers. However, credit should be given when credit is due. Performance range has been improving dramatically over the past few years. Right now, most electric vehicles can do approximately 160 km. however, with continuous technological advancement, these numbers could increase to 200, 300 and even more.

The beauty about BP’s scheme is that no driver actually owns a battery; the batteries belong to BP. Therefore, if batteries improve to provide better ranges, drivers can switch to the better devices since all they have to do is get to a switching point. Better place has given consumers a great option of upgrading to new battery types as soon as they are developed.

Such a quality is imperative in any newly developing industry because several changes are likely to take place in the near and long term. Many hybrid vehicles have been placing a lot of risks on the consumer who must buy the battery upfront. Better place has transferred battery ownership and thus made the electric vehicle industry quite manageable to car users.

One of the attractive things about Better Place is that battery swapping will not just be restricted to those clients who subscribe to BP. The company will allow other clients to tap into their charging system. They will then work out billing systems between themselves and the electric vehicle providers.

This collaboration will be imperative for the growth of such a new industry. Customers will also enjoy the convenience of not having to look for their respective providers before charging. BP could emerge as the EV infrastructural leader and provider because of this condition. If electric vehicles hope to compete with petrol powered cars, they need to have a comprehensive charging point network that accords flexibility. (Hammerton, 2011)

Installation of charging networks

It is likely that these electric vehicles will lead to better results owing to the installation of various charging points around the country. In order to compete with conventionally powered vehicles, any electrically powered car needs to access charging points conveniently and safely. Better Place has already stated that it plans on building one of the largest electric car networks in the world by the year 2013. In Canberra, the firm has identified five public charging points and two private charging points.

Sydney will have about eleven public charging points while Albury, NSW will have one private charging point (Better place, 2011a). Since Better Place is an international company with a worldwide network of battery switch points, car users from Australia can enjoy switching their batteries at Better place charging points anywhere around the world. Such a mechanism is quite promising because it would offer clients a vast number of selections.

This strategy will work well if the firm adopts a targeted market development strategy. In other words, BP should identify areas with early adopters of electrically powered vehicles. The organisation should then start developing these areas first before it can spread out to other less-enthusiastic parts of the nation.

The early adopters are likely to demonstrate that the electric scheme does work and would cause other car users to try it as well. Better Place would get more effective results this way than if it evenly distributed its charging networks around Australia. Currently, the organization is using a different approach in the selection of locations around Australia. The chief executive of BP Australia- Evan Thornley explains that Canberra was chosen as the pioneer because most residents in the location have two cars in their garages.

Fifty four percent of them have two cars while eighty nine percent have off-street parking. The organisation believes that since garages are suitable charging points, then people with more garages need to be considered before others. This approach will work for the organisation at the beginning because the electric vehicles have not yet been released into the mainstream, but as the cars get into the mass market, Better place will need to study its client base so as to assess who the early adopters are.

Investments and prospects for the future

Better Place appears to have collaborated with very reputable corporate figures in Australia. Already the organisation has partnered with ActewAGL. They have signed a ten year contract worth 60 million dollars that will ensure provision of renewable energy for the vehicles that will be employed (TMR, 2011).

Consumers and stakeholders who are concerned about sustainability issues will be rest assured by this deal. Furthermore, if a corporate body can trust BP to the extent of investing millions of dollars, then chances are that they have seen something worthwhile in the organisation (White, 2011).

Another organisation that has worked hand in hand with Better Place is Lend Lease. Their contract with Better Place is worth ten million dollars. The firm started working with BP from 2009 in order to the build charge point infrastructure that is needed to keep the scheme up and running.

This organisation has been working with Better Place in order to acquire sites for the recharge points. Construction of the BP visitors centre as well as the battery exchange stations have been managed by Lend Lease as well (White, 2011). Better Place appears to be moving very fast in terms of these developments and is likely to continue doing so.

Better place has identified a number of other foundational members that it plans on collaborating with. They include CIC Australia, Land Lease, National Conventional Centre, Rock Development Group, Capital Hotel Group, Crowne Plaza, ACT electric vehicle council, Hindmarsh and TransACT.

These companies are collaborating with BP through various capacities. Some of them are building developers and want to have electric charge points in their premises; CIC Australia is one these partners. It has established some facilities at Googong, which possess required wiring for electric vehicle charging. The next step will be to roll out these stations. Melbourne has also supported the initiative in order to help it raise approximately one billion as planned for the next three years (Leyden, 2010)

Renault is one of the car manufacturing firms that have pledged to collaborate with Better Place in order to roll out electrically compatible vehicle models. BP has already introduced the Sedan in Australia and plans to increase the fleet of vehicles available in the nation. By working with an experienced automaker like Renault, BP is demonstrating its seriousness and commitment towards the EV initiative as it forges ahead.

Pricing challenges

A number of pricing issues have been cited by opponents of the electric vehicle industry. Car users have objected to the excessive pricing of electrically powered vehicles. However, Better Place seems to be offering a solution to this problem and is likely to garner positive responses.

First, customers will pay a membership fee that will be assessed through one’s mileage. It has been estimated that Renault will deliver a fleet of sedans which will cost 30,000 to 35, 000 dollars. Batteries will cost $12,000 (not inclusive of monthly fee). The monthly fee is likely to be lower than what consumers pay for petrol in their conventional vehicles.

The company executive explains that customers may be able to pay as little as a seventh of what they are currently paying for petrol per kilometre. However, these savings will be enjoyed more by long distance drivers than shorter ones. Many drivers in Australia are high-kilometre drivers so most of them would realise these benefits. Better Place is poised to do well in this country owing to this issue.

Costs savings will not just be realised by car users alone; the government is set to benefit from this scheme. Current expenditures on petrol fuel are approximately 30 billion dollars. Sometimes these amounts may increase if the dollar rate increases and if the oil price increases as well.

If the same number of cars were powered by renewable energy sources, the government would be spending only 5 billion dollars per year on fuel. It is not likely that this may happen immediately but if Better Place continues to roll out more charging points and keeps developing its network, then this scheme may create a lot of economic benefits within the country. These changes require small steps but will eventually become quite formidable.

Many petrol vehicle users have been complaining about the price fluctuations of their fuel source. In fact, the major problem with conventionally powered motor vehicles is that consumers rarely get to plan their fuel usage expenditures because these keep changing from time to time (Daniel & Gordon, 2009).

However, Better Place will be offering a totally different scheme. Consumers will be expected to pay a monthly flat rate so most of them can easily plan their expenditure without being anxious about this challenge. It will be a strong point that could lead to the success of the scheme.

Success in other parts of the world

Better Place maybe rolling out charging points in Australia for the first time but the organisation is not inexperienced in the electric vehicle industry. It has been doing well in other parts of the world such as Israel and Japan. Since Australia is keen on handling its energy needs then the scheme will do relatively well in this kind of market in the future.

Israel rolled out charging points in March 2011. Consumers are already enjoying the benefits of this system. They take five minutes to exchange their batteries and are already starting to save on monthly vehicle costs (Israel21c, 2011). The firm got very enthusiastic responses when it introduced its first fleet of electric vehicles from Renault.

Almost seventy percent of the one hundred vehicles brought in Israel have already been sold in these first few months that the scheme has been in operation. Other test trials have been carried out in other parts of the world like Tokyo, San Francisco, China and Yokohama. In Yokohama, Japan, Better Place released a new initiative in which a swapping pad and battery shuttle were used for swapping and a good reception was reported.

Tokyo implemented a trial run between 2009 and 2010. Approximately two thousand batteries were swapped in this project. Extension of that demonstration illustrated that the public responded well to the Better Place scheme. These test trials are an indication of what is to come; Australia can reap the benefits too.

Conclusion

Better Place should roll out charging points because the program has been successful in other parts of the world. Furthermore, powerful stakeholders in the corporate arena are already involved in this initiative. The company appears to be financially ready to deliver. Better Place has dealt with pricing and battery charging issues through is battery swapping scheme.

It intends on using green sources of energy thus making it sustainable. Furthermore, its pledge to have a wide network of charging stations is likely to create a strong infrastructural backup for electric vehicles in Australia. The scheme could revolutionise the auto industry through these advantages.

References

Better place (2011a). Charge spots: Right here right now. Better Place Australia Company Website. Web.

Better place (2011b). Why go electric? Better Place Australia Company Website. Web.

Daniel, S. & Gordon, D. (2009). Two billion cars: driving towards sustainability. Oxford: OUP

Fung, D. (2009). How Better Place plans to revive the electric car. CNET Website. Web.

Hammerton, R. (2011). Better Place expands EV charging network. Go auto Website. Web.

Israel21c (2011). More millions invested in Better Place. Israel 21^st c Innovation News Service Website. Web.

Lee, H. & Lovellette, G. (2011). Will electric cars transform the US vehicle market?Belfer Center for science and International Affairs report. Web.

Leyden, F. (2010). Electric cars plan charging ahead. Herald Sun. Web.

The Motor Report TMR (2011). Better Place Australia secures funding for Canberra electric vehicle charging networking. The Motor Report Website. Web.

White, L. (2011). Canberra powers ahead with electric car network. The Australian. 2011. Web.

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