Posts Tagged ‘electric cars’

Electric car
1Jonas Opedal

Jonas OpedalJanuary 16, 2015

A $1bn Electric Car Failure

The idea was simple enough.

As simple as revolutionising an entire industry can be, anyhow. Putting electric vehicles on people’s radars for good and fixing one of its biggest drawbacks, range anxiety (distance travelled per charge)

How, you ask? By rethinking the whole charging procedure and dramatically reducing the charging time.

A good idea, you ask? According to investors, yes. Better Place raised almost $1 billion in funding without a ready product.

Who, you ask? A serial entrepreneur named Shai Agassi, a guy charismatic as few others, was able to convince investors he would sell millions of electric cars in Israel and the rest of the world.

Innovative technology

Instead of relying on the traditional stop-and-wait-while-your-battery/tank-is-refilled, which for an electric car takes a long time, Agassi wanted to think new. His solution was to exchange the whole battery package under the car, fully automatic, and replace it with a fully charged one. This meant that you would be able to be in and out of a charging station, leaving with a full battery in less than 5 minutes, not much longer than the time taken to refill a regular petrol tank. This, combined with a vast network of battery swapping stations throughout cities and the countryside, would mean the end of range anxiety.

Better Place was founded in 2007 and immediately drew investors’ attention. They wanted to build affordable electric family cars in a market consisting almost solely of Tesla Roadsters. After hitting it off with current CEO of Nissan and Renault, Agassi suggested at a TED talk in 2009 that Renault cars would enter the market with “mass volume – mass volume being the first year, 100,000 cars”. This would mean half the new-car market in Israel at the time, and he later told Time magazine that they would eliminate new sales of petrol cars by 2015.

The final order to Nissan-Renault, placed in 2009, committed Better Place to buy 100,000 cars between 2011 and 2016. Their planned business model would borrow from the telecom industry in that they would subsidise the vehicles and make use of monthly subscriptions for the charging networks. Eternal optimism dominated in these early days and Agassi soon told reporters that the cars would price about half of a petrol car, this without having agreed on prices with Renault-Nissan.

The huge investments meant Agassi was soon on the lookout for expansion beyond the Israeli borders. Better Place focused huge amounts of time and money on lobbying politicians and planning for new markets, first out would be Denmark and Australia. In addition, instead of hiring experienced people from the motor industry, his managing group consisted of both his brother, sister and father, and later also his girlfriend and her friends.

His attempts to get other car manufacturers on board did not go well, scaring away German manufacturers with his ideological and top-down point of view. In fact, while meeting with General Motors, Agassi suggested to them that they would deliver their cars for free, and laughed at their plans for the new Chevrolet Volt. As you can imagine, the meeting did not end on good terms.

When the first cars were finally ready for delivery in 2012, reality hit hard. The driving range was substantially lower than promised and priced at the same level as petrol cars. The monthly subscription added $3,000 a year plus charging, and the battery station infrastructure ended up costing $2m. At that time, they were losing $500,000 each day. In May 2013, Better Place declared bankruptcy having sold just 1,500 cars.

Lessons learned

Better Place had a big opportunity to push the electric car revolution, with huge funding and massive public interest. In the end it was probably mismanagement that ruined the big adventure. But was it ever a good idea?

The short answer is yes.

Let us first look at the investors and the media. Both gave of their resources in vast amounts, underlining that the idea must have had some things going for it. Also, Better Place did manage to build a working vehicle and charging stations, albeit not exactly with the specification and price they had promised. In other words, the technology was possible.

Another convincing argument is that Tesla supports the technology. This video from Tesla depicts the Model S switching battery in only 90 seconds, substantially faster than Better Place allowed.

On stage, Elon Musk proclaims: “The only decision you’ll make when you come to our Tesla Stations is; do you prefer faster or free?”, suggesting that swapping stations might not be too far away.

So far, noone has picked up the baton from Better Place. Probably the number of electric cars is still too few to justify spending hundreds of thousands of dollars on switching equipment. The vast number of different batteries and standards of charging must also seem cooling for the industry, allowing one type of car per different station.

Instead, industry focus is now on improving battery and supercharging technologies. But with growing number of vehicles, and Tesla pushing innovation, that might change in the not all too distant future.

What do you think?

How can we learn from failures?

Join us in Trondheim, Norway, on 18 & 19 March as we seek to awaken the entrepreneurial mindset at Technoport 2015.

Photo credit: U.S. Embassy Tel Aviv

i-road-4
14Hermann Ørn Vidarsson

Hermann Ørn VidarssonSeptember 26, 2014

Bigger roads or smaller cars?

Most of the cars I see in the morning traffic jam have just one person in them.

One person occupying 6 square metres of road space.

Car-sharing lanes have been trialled with mixed success, but now the car companies themselves seem to be addressing the problem.

Toyota is launching a new electric concept car for urban transportation. It’s already cooperating with France’s Grenoble and energy supply company EDF to pilot a sharing scheme for it.

It’s a small 3-wheel electric vehicle available in both a single-seat and a two-seat model – and it looks really fun to drive!

According to the Foreigner.no, it’s considered for launch in Norway.

Could smaller cars, not bigger roads, solve our the congestion problems in our cities?

At our Share the Problem on the 2nd October we are looking at the future of urban transportation.

We need a shift of paradigm in the transport sector. We just don’t have the real-estate to support the growth and we certainly don’t have the planet to continue to do as we have been doing.

We invite you on 2nd October to Share the Problem, a crowdsourcing event with a group of people from diverse backgrounds: arts, engineering and social studies. Working together, we will get a better understanding of the challenge ahead and share some new perspectives.2

We’d love to see you there – please register yourself here.

Photo credit: Toyota

Tesla patents
60David Nikel

David NikelJuly 2, 2014

What Tesla’s patent giveaway really means

Here at Technoport we’re big fans of the South African-born Canadian-American head honcho at Tesla, Elon Musk. He’s a great example of how an entrepreneurial mindset can disrupt virtually any industry out there, from financial services (PayPal) to rocket technology (SpaceX).

But even we raised a collective eyebrow when a few weeks ago, Musk announced that Tesla will allow its technology patents for use by anyone in good faith, in a bid to entice automobile manufacturers to speed up development of electric cars.

“Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology. Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day. We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly-evolving technology platform.” – Elon Musk

The announcement came after a time of rapid growth for Tesla, not least here in Norway, during which they invested heavily in research and patented a lot of key technology elements. In order to understand the strategic decision, I turned to Trondheim’s IP expert and “friend of the startups” Tommy Dahlen, partner at ADEB, first asking what the announcement actually means in practice:

“In effect, all competitors are now free to obtain and utilize any technological edge Tesla might have “encapsulated” in their patent portfolio and – in theory – establish a more level playing field in the manufacture and sale of electric vehicles”, said Dahlen.

Although the entrepreneurial spirit of coworking and collaboration seems to be behind the move, Dahlen believes the strategy from Tesla is clear:

“I find it hard to believe that Tesla ever saw – at any given time – its current inventions (as embodied in patent applications) as its key strength. Their vision is to thrive in the marketplace with what they have not yet even contemplated. A fast moving company, with the smartest people available, will be less inclined to think about ”static” patents as key assets moving forward.”

“It is likely that this in most respects is a market specific, strategic and business driven decision that could prove highly benefitial for Musk and Tesla and support their long term success in his particular market.”

“Opening the ”vault” on their current key technology will probably enable competitors to faster and more efficiently make better vehicles and ensure a quicker market penetration of electric cars. Tesla, as all of those in this market, know that penetration of electric cars in the global market is vital for maintaining market position against emerging alternatives like the hydrogen vehicle. Therefore, it seems that the primary driver is not neccesarily to ensure its own market share in an existing market, but simply to grow the market itself and reap the benefits by making more desirable cars than their competitors based on things that have not yet been invented and – obviously – capitalizing on their extremely strong brand recognition.”

“From an IPR-strategic perspective there are a number of lessons to be learned here. One key takeaway is that patents and other proprietary positions could effectively limit the potential for growth of emerging product markets, by slowing market penetration and widespread customer acceptance, thus leaving the door wide open for those who plan to introduce alternative solutions to the same problem.”

Further reading:

  • What’s Driving Tesla’s Open Source Gambit? (Forbes)
  • Honda, GM, Dismiss Tesla Electric Car Patent Giveaway (Transport Evolved)
  • Patents Are Eating the World and Hurting Innovation (Bloomberg)

It remains to be seen what impact this announcement will have on the electric car industry, but any R&D-based industry where patents and lawsuits are commonplace. Can you imagine a world where Apple and Samsung aren’t wasting billions suing each other, and instead making great, affordable phones?

What impact do you think this announcement will have?