Israel -- The First Electric Car Nation?

As originally published on AskPatty.com.

On Jan. 21, 2008 Renault-Nissan President and Chief Executive Carlos Ghosn announced in Jerusalem that they will begin producing a customized electric car for the Israeli market in 2011. The idea is the brainchild of former SAP executive Shah Agassi's, who formed a venture specifically for this project, name Project Better Place, based in Palo Alto, California. The five passenger Renault Megane will serve as a prototype vehicle. Initially, up to 20,000 such cars will be produced. To celebrate, Renault staffers recently converted a gasoline car to electric, and according to Israeli news reports, it even raced against a gasoline car. Dozens will hit the road at the end of 2008 as demonstrations.

Israel was apparently chosen because it was an ideal testing ground for the electric car. Ninety percent of automobile owners drive fewer than 70km (43.5 miles) per day, and the country's main cities are within 150km (93 miles) of each other.

What’s interesting in this new development is that Israel is not a hotbed of environmentalism. Environmental awareness is low and environmental regulations are uncommon in this country. Instead, ending foreign oil dependency is in their best interest. The Israeli government has thrown its support behind the project, by helping to make the economics of electric car work. On Jan 13th, 2008, the Cabinet approved a proposal to tax new cars based on their emissions levels. Regular new cars will be taxed 79%, hybrids 30%, and zero-emission electric vehicles 10%. This favorable rate will disappear gradually over time and as market share increases, the typical way where government subsidy can be used to encourage adoption of a beneficial technology to create enough demand to make large-scale production eventually viable.

However, don’t cheer too fast – for the Israeli grid is not very clean. This proposal will increase greenhouse gas emission until the grid uses more renewable sources of energy. Currently, Israel has a policy to produce (only) 10% of its electricity from solar and wind by 2020. Still, consolidating emission from point-source such as cars to large power plants is a good idea, as it will make it easier to tackle the issue of GHG emission. E.g. it is easier to apply pressure to a large polluter than to persuade millions of car users to switch to clean cars.

To circumvent battery life issue, a completely different re-charging model will be used. Better Place will create and maintain a chain of service stations where owners can pull in and wait 10 minutes, while technicians swap out the battery with a fully-charged one. This is about twice the time it takes to fuel up today so it will be interesting to see how what consumer reactions are. Still, I am willing to wait 10-15 minutes at my car wash, because it is so entertaining to watch and they have great bbq/popcorn… there are definitely ways around it. Ever heard of how they installed mirrors at elevator banks because people used to complain those cars took a long time to arrive? Yeah, well, the complaints stopped once we had a chance to preen. Smile.

This is definitely news worth getting excited about. An entire nation deciding to go electric! Now that’s something. Imagine a clean-grid state like California doing the same. Perhaps smog in LA can be a distant memory someday. I will keep on dreaming.. after all, good news like this Israeli development are becoming more common each day.

Sources: BusinessWeek articles here, and here.