A High-Tech Twist on the Filling Station

In Japan, a California Start-Up Unveils System for Quickly Swapping Batteries in Electric Cars
By JOHN MURPHY

YOKOHAMA, Japan -- Electric-car promoter Better Place Inc. gave its first public demonstration of a battery-swapping system, a key achievement for the start-up company as it tries to persuade auto makers and investors that it is possible to wean drivers from gas-powered cars.
But relatively low gas prices, a credit crunch and turmoil in the auto industry continue to create obstacles for Better Place's plans, especially as it seeks auto makers to manufacture electric vehicles.
Addressing widespread concerns about the limited range of electric vehicles, Better Place founder and Chief Executive Shai Agassi on Wednesday showed how a driver could exchange a depleted battery for a fresh one in less time than it takes to fill up with a tank of gas. Start to finish, the automated system can complete a battery switch in about one minute.
Mr. Agassi called the debut of the system in Yokohama a "major validation" of his company's business plan for the electric vehicle.
Better Place, based in Palo Alto, Calif., plans to support electric vehicles with a global network of thousands of battery-swapping stations, like the one unveiled Wednesday, as well as thousands more recharging points. It aims to roll out its electric cars in Israel and Denmark in 2011 using networks, paid for by private equity, costing about $150 million each. Better Place plans to function like the mobile-phone industry, with drivers subscribing to plans that bill them for the miles they drive each month, just as mobile-phone users are charged for minutes.

But it isn't clear who will build all the electric vehicles Better Place needs for its business. The alliance of Renault SA and Nissan Motor Co. has agreed to manufacture an electric vehicle -- with a swappable battery -- for Better Place's operations in Israel and Denmark. But Renault-Nissan has no plans to supply electric cars for networks Better Place is building in Australia, San Francisco and Hawaii.
Mr. Agassi said most global auto companies aren't interested in building electric vehicles now because they can't afford to take the risk. "There are no car companies in the market today that are making a profit right now. That's the sad state of the industry," he said.
While some auto makers, like General Motors Corp., plan to come out with limited numbers of electric vehicles, there is still debate within the industry about the future of electric vehicles.
Carlos Ghosn, who heads the Renault-Nissan alliance, said in an interview that while he values his partnership with Better Place, Renault-Nissan won't "blindly put all of its eggs in one basket" by building cars exclusively for Mr. Agassi's start-up. Nissan next year will launch its own electric vehicle, which won't be compatible with Better Place's battery-swap system. The Japanese auto maker instead will rely on building a network of high-voltage, quick-recharging stations to support its electric vehicles.
"At the end of the day those who have the battery and the car are going to be leading the game," Mr. Ghosn said.
Mr. Agassi says that once auto makers see his business success in Israel and Denmark, they will be eager to build more electric vehicles.
He also is hoping that as governments world-wide bail out auto makers, political leaders will push the industry to shift from gas-powered vehicles to produce electric cars that would support Better Place's vision.
Write to John Murphy at john.murphy@wsj.com