THE BLOG
03/24/2011 10:51 am ET Updated May 25, 2011

Can the Better Place Model Drive EVs to the Future?

When the Better Place electric car network idea was launched, the green types were ecstatic. With switchable batteries to extend the range of driving an electric car, which can take normally hours to recharge, Better Place not only introduced a novel way of making electric cars work today, they also said that the cars will be cheaper than traditional ones: with a pricing model more similar to the telecom industry. But new pricing schemes in Denmark raise eyebrows.

Developed by Israelis, Better Place is not an automotive company, but an infrastructure enterprise. And I am not convinced Better Place will work, despite all the hoopla. Yes, Israel has a great IT and high-tech communities that develop mind-boggling and creative business plans. Also in Israel, something I was surprised to learn -- you can buy car insurance for certain days of the week -- a sweet model for people who don't drive on the Jewish Sabbath, or holidays. It's a kind of "green" insurance, in a way, with similar models springing up from companies that propose a pay-per-miles-driven model. We all want cheap car insurance and to pay less for gas. Can the Better Place pay-as-you-drive model work?

In the cell phone business you get the device for free more or less, and you are locked in by buying minutes. But Better Place-Renault pricing in Europe is almost 30,000 Euros for the car to start, plus about $220 to $500 a month for electricity, and almost $2,000 in hooking up a charge spot near your home. Seems risky to me.

Instead of charging from a regular hookup at home, at work or at the supermarket, people buying into the Better Place network need to invest a certain sum to ensure electricity hookup. An interesting CNN Money report here, tracks unfavorable reports from analysts on the "questionable EV economics" of Better Place.

I understand that they are in business, but it just doesn't make any sense to me in any sort of way. You'd have to be pretty sure you're going to be driving so many miles each month to make the cost of Better Place cars work for you. What happens if you travel for a month or more? Can you put your plan on hold or sell it to someone else? What happens if you don't drive enough?

Last summer I had the chance to travel to Finland and meet their clean tech community. The bloggers in attendance and I learned that although Finland has about a handful of electric cars, it has the infrastructure ready: throughout the country charge spots are in place for block heaters. It can get so cold in Finland in the winter months that people need to warm their cars before driving, or risk not being able to drive at all. They are ready to go fully electric -- at least for short commuter distances.

In the U.S.: Think about the electric networks already set up at truck stops, at Walmart shopping centers, in people's garages. I can't imagine why in the world you would pay for electricity through the Better Place plan and stations when you can plug into the wall and get it at cost price from your home, or free at the office.

Read more by Karin Kloosterman, the founder and editor of Green Prophet:
Nuclear is no Insurance for the Middle East
Despite Japan, Turkey Goes Ahead With Nuclear Reactors