CNBC Business | Taking Charge

Taking Charge

In a world pressurised by record high oil prices, all eyes are on Israel and a project to make widespread electric car use a reality. Rebecca Wright reports

As attentions turn to electric vehicles (EVs) in the race to clean up the world’s roads, Renault-Nissan has achieved something of a coup. Under the leadership of Carlos Ghosn, this French-Japanese alliance has teamed up with Silicon Valley start-up Project Better Place in what is starting to look like the world’s most comprehensive and inspired electric car programme.

In doing so, Renault-Nissan thinks it has solved several of the issues that thwart other would-be EV makers. Renault will design and build the vehicles and Nissan – through its joint venture with Japanese electronics specialist NEC – is working on the battery pack. The development of a suitable battery is one of the biggest hurdles in this programme still to be overcome. Project Better Place will construct and operate an electric recharge grid in those countries or cities that sign up to the programme. This means that, unlike its rivals, Renault-Nissan does not face the prospect of launching its EVs in markets where there is no widespread public recharging network.

“Renault could not have done this by itself,” says Jerome Perrin, director of advanced environmental projects at the French carmaker. “We would have had to install the plug-in networks, negotiate with the utility companies for a special tariff, and take care of the servicing and maintenance of the batteries. This is all part of the business model offered by Project Better Place.”

The programme’s first deployment was announced earlier this year in Israel – also the birthplace of Project Better Place founder and CEO Shai Agassi. Until March 2007, 38-year-old Agassi was president of the product and technology group at SAP AG and was widely regarded as the next CEO of the German software giant. Little did Agassi know, two years previously, when he was asked to write a White Paper on the future of energy, transportation and the environment as part of his role as a Young Global Leader for the World Economic Forum, that this would lead to such a radical career change.

Israel’s geo-political motives for wanting to end its dependency on oil need little explanation. At the time of announcing its involvement in this project, Israeli President Shimon Peres hailed the electric car as the country’s new weapon against the threat of terrorism from its Middle Eastern oil-rich neighbours. “We are not going to fight the producers of oil. But we are going to introduce alternatives.”

In addition to Agassi’s links with the country, there are other reasons why Israel is well suited to this initiative: ninety per cent of Israelis drive less than 70km per day and its biggest cities are all less than 150km apart, making it an ideal test bed for early generation EVs that could still have significant range issues; Israel is like a transportation island – cars sold there rarely get moved to another country; its cities suffer badly from smog and other forms of air pollution; and the amount of sunshine it is blessed with makes solar generated power, as a back-up to the primarily coal-fired electricity grid, a no-brainer.

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