Project Better Place is going to be a financial train wreck

Project Better Place just released this video demonstrating a battery swap station for an EV.
First watch the video, then below I will explain why I (and others) believe that this will be a financial disaster.

This is a financial disaster waiting for any company that actually thinks this is a viable business model.

Much like hydrogen, the more you look at Project Better Place, the worse it appears.

If I start every day with a full battery from my garage 110 volt or 220 volt outlet, I would need a battery swap about twice per year, if that. With a range of 200 miles, I doubt I would ever need a battery swap.

These swap stations would be so rarely used that I doubt it will ever justify the cost of the land, building, machines, inventory, etc.
For a battery swap network to be viable, it would need to be as common as the current gas station. That is a massive cost for something that will be rarely ever needed by an EV owner.

Manufacturers would all have to either make their batteries identical (or just use one of a few variations), or the PBP stations would have to stock multiples of all different sizes/shapes/brands of battery. Can you imagine the confusion if there are 20 or 30 different battery styles, you pull in expecting your battery to be replaced, but then they’re “out” of your particular style/brand? What do you do then. Can you imagine the dissatisfaction?!

And Project Better Place keeps referencing the cell phone model. Every phone brand uses a different battery, voltage and socket/plug. Even within a single brand.

Oh, and The “J” charging plug that was just approved as a standard has been in the works for 10 years.
Do we really think a standard battery could be agreed upon faster?
The battery technology is improving so fast that it is likely impossible to even have a standard battery size or specs. And as they improve, the swap station would still have to stock the older batteries for older EVs on the road.

I think Project Better Place needs to invent a new reason to exist. I appreciate that they have sparked a discussion on what is possible and they are getting politicians to think about EVs. But their business is a disaster financially.

(the information above has been gathered from many posts on TeslaMotorsClub.com that I used to summarize my own thoughts on this topic. I borrowed a few quotes directly word for word.)

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27 Comments

  1. […] tried to summarize all of the posts here (that I agree with) on my blog. Project Better Place is going to be a financial train wreck Peak Oil Garage __________________ http://www.PeakOilGarage.com 1) 2008 Vectrix electric maxi-scooter 2) 2009 Toyota […]

  2. Your analysis is not quite accurate I believe. It’s true the concept is not a flawless solution to everything but I believe you make up some semi fictional worst case scenarios to support your conclusion. One, their range wont be 200miles. likely less than 100. and since we’re pointing fingers, how about you stop using those old idiotic units..
    Two, to keep the system lean they would probably keep the number of battery types to a mininum. I’m guessing no more than 3 and maybe only 1 to begin with.
    Three, they would never be ‘out’ of a particular battery but what could happen in a spike is that they would run out of precharged batteries so you would have to wait around while the machine recharges them. And that is its one major limitation that as far as I can tell cannot be solved within the project premise. One way to get around it would be to have batteries that charge really fast but the better you do that the more you put yourself out of business because then the battery might as well stay in the car. It is conceivable though that there is a viable sweetspot around 10-15minute recharge times where it’s just a little too long for a car to wait but fast enough that a station with 10-15 packs could keep up. Come to think of it, that might actually be how they start out as it is. It would require a ~megawatt connection to the powerlines but is possible. That way you could process around 60 cars per hour which would probably be good enough that significant inconvenience would be rare. Also worth keeping in mind that the excitement of driving a completely new technology and going through a robot changer buys you a lot of goodwill at least for a couple of years.

    The way I see the project is that it could actually work BUT with a minor sacrificial attitude on the part of the customer. The understanding that it’s not guaranteed to be perfectly smooth always. One limitation they don’t get around for instance is the initial confinement to adopted regions. For israel that’s not a problem because there are enemies on all sides 🙂 but it would be a conscious decision on the part of danes for instance. Hawaii is ideal however.
    The way I see the concept, it could work but never quite get free from the minor sacrifice and thus never be the final solution. But very importantly it could work well enough to cement the revolution and that has merit.
    Whether the investors will eventually lose money on it is hard to say. I consider it possible but in good business convention their greed might lead them to ensure better alternatives dont’ surface prematurely.

    One thing I might suggest is to change battery pack configuration to a smaller format that you then have a certain number of in a car. that way a big car could request a larger number of blocks and very lean forward thinking cars like my concept http://zev.dk/F5.jpg could request 1 or 2 blocks. The adherence to that clumsy T shape I don’t quite understand.

  3. Dan,
    If they are keeping the system lean with only two or three battery types, then they are already limited in their potential to exist.

    I own a battery import company. I have seen how fast this is changing. It will be impossible to keep the battery standardized. Every year there will be improvements that will cause changes to the standards. As a result, every model year the batteries will be changing.

    So for Project Better Place to stay relevant, they will have to stock all of these different batteries. For example, the 2014 Nissan EV battery may be the old generation technology. It won’t fit on the super new 2015 Nissan EV. The new 2015 Nissan has SUPER AMP technology that is not compatible with the old version.

    The amount of money required to get enough swap stations in the system is massive. And this entire system would be obsolete and useless as battery ranges for EVs reach 150+ miles. 99% of people won’t need to swap batteries if they start every morning with a full charge.

    If these swap stations are so rarely used, there is no way to justify the expense of building them. This business model is going to implode.

  4. you may import batteries but your portrayal of the development speed is not accurate.
    the 3.2V lithium iron phosphate chemistry has been around for some years now with no outlook of being replaced. the 3.6v laptop lithium chemistry group has been around for a lot longer and similarly no outlook of being replaced. the packs can grow in potency and capacity but still be compatible. if better chemistries come along you could even change that and the packs could still be compatible.
    it’s of course true that it wouldn’t serve all car designs and it doesn’t have to either.
    and you might notice how amazingly unimaginative car makers have been in the past in that all cars look alike with the same stupid poor aerodynamics overweight cast iron constructions so there is zero basis for concluding it would change dramatically every year. if we ignore actual thinking like the aptera and loremo, then the wildest departure from convention was the EV1 which they killed for being different and that could probably use the PBP battery too.

  5. btw an updated EV1 would be quite interesting. Obama should demand that or make it happen without GM

    • I think Obama has enough on his plate without getting involved in auto design. A car designed by politicians would likely be a disaster.

      Tesla, Nissan, Aptera and a few others are doing just fine in terms of designing innovative electric vehicles.

  6. You can see the development speed just with Tesla Motors. It has nothing to do with chemistry. They learned from experience a different way to do things in terms of design. The Tesla Model S battery shape (within the vehicle) is nothing like the Tesla Roadster battery shape. As a result, the Model S battery pack is not compatible with the Tesla Roadster. Both are exactly the same chemistry.

    You will find that every auto company does things differently. That is part of how they differentiate themselves. Someone will come up with a new way to configure the design to make something work better. This natural product evolution works against the ability of Project Better Place swap stations to function.

    It took them 10 years to agree on a connector standard. Do you really think they are all going to agree on a battery pack standard?

    The entire business model for Project Better Place is just one step away from being obsolete and worthless. There is no way to justify the expense of building this huge battery swap network with such a huge risk of the entire system being useless.

    As EV range increases every year, the relevance of needing a battery swap becomes less and less.

  7. ok, you’re the kind that would keep talking nonsense rather than be moved by logic so I wont correct you much further. obviously you shape the pack as you like if you’re not trying to be part of a battery swap system. that’s completely irrelevant. what is relevant is that the car configs share so much that’s it’s not a huge compromise to conform to such a standard. it’s not like the wouldn’t be able to put out next years model with the same battery form..
    and no, increasing range doesn’t preclude the need for battery swap. only blitz recharge would kill the basic PBP premise. It doesn’t matter how far you can go if at the end of that range you can’t get home again. Even the Tesla’s significant range can’t go from LA to SF or LA to Vegas and certainly not back again but a PBP car could because such main routes would be the first to be populated by swap stations.
    The PBP system can be introduced gradually covering only the major backbones at first. A country like Denmark which is a logical 500km L shape you could get going with as little as 6 swap stations supporting thousands of cars. The trick is to understand that it doesn’t have to be perfect for all things to work.
    As for standard acceptance it’s a case of get onboard or we are happy to sell just our cars.. it could be worked out in a week with a bit of leadership.
    the connector that it took 10 years to agree on sucks anyway

    Does your battery import have a website?

    • The fact that it took 10 years to agree on a connector standard should tell you something about the odds of agreeing on a battery standard.

      The connector standard was an easy item to agree on. Nobody really has a vested interest in owning that technology.

      The battery is completely different. The range and performance of the EV is the way to differentiate your product. A sports car EV will need different performance characteristics than a compact EV. There will be some EVs that are designed for long range. There will be others that are designed for urban short range. There will be some sport EVs desgined for fast acceleration.

      All of these consumer choices will have different battery requirements that will work against any standard battery for swap stations.

  8. My company website is http://www.evcomponents.com

    Battery pack shape and how it is is lconfigured within the car is ikely to change over the years. Some auto company is going to figure out a better way to do it from the “standard” and will insist on doing it that way.

    Different size vehicles will have different requirements. A small compact EV will need a different battery size than a Sedan EV. There is no way that both types of cars would use the same battery standard. Project Better Place swap stations would have to carry both.

    As energy density improves, that same sized for the battery pack will have a longer range. In the batteries we sell, the big change right now is that the 160 Ah and 180 Ah cells have the same footprint. That is a 12.5% improvement in energy density in just one step.

    If an EV owner is starting each day with a full battery from home, the need to swap a battery is extremely low. If there are recharge stations in parking lots at work or where people shop, then EV owners are recharging often during the day and extending their daily range even farther.

    As range improves over the years, Project Beter Place becomes more and more irrelevant with each improvement in battery energy density.

    If you want to invest in this financial disaster, feel free to do so. I own two electric vehicles already and my Tesla Roadster arrives in about a month so it will be my third. I already understand the range issues extremely well.

    Battery swaping is something that non EV owners think makes sense. Those of us that understand how daily life works with an EV already know that it is an unnecessary crutch.

    You have been trained by the oil industry to believe that you need to stop at a “fuel station” and get your fuel in 5 minutes, then keep driving. It is a habit for you.

    As an EV owner, that mentality changes. You get your fuel every night and you start each day with a full tank of electrons. You will rarely ever need to refuel at another station if you are recharging at home each night.

    The mere fact that the battery swap station would so rarely be used makes them financially unsustainable as currently envisioned. Project Better Place needs to find a new reason to exist.

  9. Even if you expect to take only one trip in a year that is more than the range of an EV then you will be discouraged from buying one. Swap stations are necessary for a lot of people.

    For instance, what if you were to take a trip to stay in a friends house. Etiquette would suggest you can’t charge from their plugs on those nights. Hotels may not have or invest in charge points for you and certainly wont let you use their personal electricity. In these instances you can’t charge overnight!

    So assume these stations are necessary to encourage buyers and induce sales of EVs. Manufacturers will rely on it and will be encouraged to conform to battery standards.

    Can it be profitable to BP? Well, some highly intelligent people think so, the numbers have been run. From an outside perspective I imagine one lucrative source – cargo transport trucks. If these become electric they will need swap stations and could carry the business.

    Can they be profitable?

    • If you are a friends house, plugging in is easy and cheap. Give your friend 15 cents for every hour you were plugged into a 110 volt outlet. Round it up to the nearest dollar. I bet it would be under $2 for an overnight. I recharge at the homes of my friends on a regular basis. They think it is cool. Give them 50 cents if you are just there for a few hours.

      Having a recharge station that is metered, like a parking meter that you feed quarters, will become standard. Hotels and parking garages will naturally install them as a source of revenue. That is MUCH cheaper than Project Better Place style swap stations.

      I think the only place battery swap stations even sort of make sense is on highway rest stops between cities.

      But as we get fast charging, if you could recharge a 200 mile range EV in under 1 hour, then you will likely never need swap stations. When I make road trips, stopping to eat and for a bathroom break every 200 miles is standard.

      According to Tesla, they have the ability to recharge the Roadster battery in 45 minutes in the lab. 440 volts and 160 amps. So as battery technology improves and these fast charge stations are brought to highway restaurants, then I doubt swap stations will be needed.

      A recharge station at restaurants in strategic locations makes MUCH more sense than Project Better Place swap stations.
      Restaurants could just add your electricity recharge onto your bill for your meal.

  10. […] via a new video, their battery swapping system. The video has kicked off a good discussion over on Peak Oil Garage that we wanted to share with you. The biggest question raised, I think, is about the batteries that […]

  11. I don’t think you can assume that people will start out in the morning with full batteries. I live in an apartment building and it’s not at all clear that this would be possible.

    If you ditch the ‘charge overnight’ assumption, what happens to your evaluations of battery swappage?

    • If your parking lot for your apartment complex is anything like those I have lived in, there are plenty of street lights around. That means the parking lot is already wired for electricity.

      If electric vehicles become common, then outlets in those parking lots will also become common. Any street light is already wired and could easily have an outlet at 110 or 220 volts. It would be easy to install a meter so that your apartment complex could bill you for the electricity.

      That scenario is far more cost effective than swap stations all over the place.

      We need to recharge vehicles at night when power plants are underutilitized. It makes more sense to install outlets in parking lots or parking garages so that everyone can start each day with a full battery pack.

  12. It would probably only be useful to have PBP swap station next to highways since that, for an overwhelming majority of EV drivers, the only moment you would need to swap a battery is when you do a trip.

    • Exactly. But the same solution would be to have fast charging infrastructure between cities along the highway. When I do road trips, I typically stop ever 2 or 3 hours for a bathroom break or to get something to eat.

      The Tesla Model S will have a range of 160 miles, 230 miles or a 300 mile long range version. I think we can assume that most other car companies will also offer multiple ranges.

      300 miles is a long way. I would need a one hour break. Tesla says they can recharge that battery in 45 minutes. That is about the length of a highway reststop for a meal and bathroom break.

      So the more logical solution is for fast charging to become an offering at restaurants along the highway. They could easily add your recharge onto your bill.

      Swap stations make less sense as battery ranges improve.
      No investor is going to fund this network of swap stations that would be irrelevant by the improvement of the batteries.

  13. Along with strengths, there are some points to consider as weaknesses in BP’s business model, but that can not be interpreted as seeing them as a financial wreck, at least as of today.

    The infrastructure deployed in Israel may be seen as obsolete in near future, but there are always ways to monetize your existing infrastructure by introducing different use scenarios compared to what BP offers to corporate clients today.

    BP is in a position to offer Taxi Companies to deploy their own taxi ranks for recharging/swapping+using as a taxi rank in near future who operates in large urban cities.

    In large urban cities, such as NY, roaming Taxis are present and are able to pick up passengers alongside the road without the need of being called or booked. This allows Taxis to pick up more passengers/day to make it more profitable, where a Taxi should be working 24/day with 2-3 shift drivers for greater efficiency. That means charging time (even if it is 1h / day, in our case a Taxi is driven all day long) causes inefficiency from a Taxi Company perspective.

    In the event of BP reducing the total cost of vehicle+cost/mile, why would not a Taxi Company use this as an innovation? I think swap stations should have different uses and enable demand responsive transport in a more environmental beneficial manner.

    Of course a Taxi solution may not be enough for BP to survive, but could add value to their existing infrastructure, eliminating concerns on lease, standardization, battery technology.., etc for a specific segment.

    What do you think?

    • There are certain applications where it might make sense for battery swaps. Your example of the taxi is a good one. I don’t think that alone would justify the PBP network. But a series of such regular clients would certainly help.

      The Plug-In hybrid along the lines of a GM Volt makes more sense for a vehicle that drives so many miles per day. 50 miles in EV mode, then the on board engine would start to recharge the battery. Such a vehicle as a taxi could recharge whenever possible during the day, but always have the gas engine as a backup.

  14. I like the idea of having more than one battery pack for each car. that would help thinks a lot on my opinion

    Also, The guy that come up with this Better Place idea is NOT an engineer. Nothing wrong with not being an engineer, except when you believe you can engineer things better than an engineer. Maybe you actually can, but I am not putting my money on you. I do no like the idea of getting brain surgery by my hair stylist 🙂

    Am I an engineer. Well, at least I studied engineering

    Just for the kicks. If this project starts with just a few cars (always a good idea for game changing technologies) it would be better plain having some trucks with a few batteries each that could be called on demand. The scenarion would be: car runs or is close to run out of juice. Driver calls better place HQ. A truck with a loaded battery is assigned and goes it way. Truck gets out depleted battery, insert loaded battery, charges driver for the thing. finish. No crazy big stations. Maybe they will need to have smaller batteries

    Also: Batter Place I believe was designed to REPLACE OIL. So you take out evil oil model, insert BETTER PLACE model. What that means, that most of the current oil stations can be converted to new better place stations

    ALSO: I believe all the stuff of many types of batteries is WRONG. I read about better place somewhere else. I believe BETTER PLACE will OWN the car and also the car production. They will dictate the battery type. So I do no see a chance of gazillion battery types ala cell phones.

  15. There would be more need for swap stations than we give credit for when we consider the sheer volume of highway traffic in the US. We have highways for that very reason, because they are heavily utilized. I agree that the need to swap in cities would be minimal. The problem we are facing is the lack of power stations to charge all of these vehicles. Battery swapping would require a complete overhaul of our electrical infrastructure. Swapping is the key to digging our selves our of the national debt.

  16. PBP plan to own the batteries. That is important. It has a big effect on the financial model. It could make the up-front cost of PBP compatible cars much cheaper than other EVs, and even cheaper than ICVs. They then make money from ‘renting batteries’, not just from ‘providing swap stations’. Investors will see a clear on-going source of revenue, so PBP will be able to get the money they need to buy the batteries.

    They won’t need anything like as many swap stations as there are petrol stations (sorry, gas stations). That is a good thing. The cars will have internet and GPS so will be able to help you plan your journey to visit swap stations that have your kind of battery ready as needed. No need to be lucky.

    Although swapable batteries will cost some design constraints, they can have performance benefits too. A hundred mile EV will be lighter than a 200 mile EV. Lighter means quicker and more efficient. PBP makes the 100 mile pure EV viable. (Fast charge tech needs a lot of fat grid connections that are only used in short bursts. Wiring up a smaller number of swap stations will be a lot easier. Range extenders add cost and weight.)

    Battery interface variety may hurt PBP, but battery chemistry changes could help. If you buy a fixed battery EV, upgrading the battery will be a major hastle that your car manufacturer has little incentive to make easy or cheap (much better you upgrade the whole car). The PBP model means you can start using the new chemistry as soon as you want to start paying for it. You can change capacity and performance in a few minutes.

  17. Yeah a battery swap station is not practical in my mind. It’s just too much time, unless you can do it in the same amount of time that it takes to fill a car, and I don’t see that happening. Quick charge seems to be the way to go in my mind.

    Car Parts Warehouse

    • if you look at the video you’ll see it takes less time than filling a tank so that part is not a concern.

      • The video is not realistic. In reality a battery swap station would need to have multiple battery packs for different size vehicles (sportscar, compact, sedan, minivan, truck). So having the right type of battery pack and in sufficient quantity creates a huge hurdle for inventory and recharging.

        If the swap station is doing fast recharging on 10 battery packs at the same time, the power requirements are incredible. In fact, it is likely not possible unless they are next to a utility substation.


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