Investment: At least $700 million
Few electric cars are on the road today, but their fans already see some giant obstacles looming: They're expensive, and they take a long time to recharge.
Better Place says it has a solution for both of those problems -- and investors love what they hear. Launched by former SAP star Shai Agassi, who abandoned his CEO-in-waiting role there to chase his entrepreneurial dream, the Palo Alto, Calif., startup is backed by an estimated $700 million from venture capitalists and industry partners, plus millions more from Agassi's personal fortune.
Better Place's plan is to sign electric-car customers up for mobile phone-like maintenance contracts. In return for a multi-year commitment to a monthly fee, Better Place will give customers an upfront discount on electric cars purchased from the company's partners. Customers can then "recharge" their cars at Better Place battery-swapping stations, which will replace the car's battery in less time than it takes to fill a gas tank.
"The car has to be cheaper and more convenient than gasoline cars," Agassi told Fortune.com in July. "If you can make an electric car that's cheaper than a gasoline car, the market will switch."
Nearly three years after Better Place was founded, the company's bold vision is just beginning to take tangible shape. Better Place has partnerships with automakers Renault and Chery, and it is deploying a large-scale test network in Israel. A smaller test in Tokyo put three electric taxis on the road from April through June. The system worked smoothly except for one glitch, when a cab ran out of electricity and needed to be towed to a recharging station.
But if Better Place's vision catches on in the United States, the cost of implementing it will be staggering. A network of high-speed charging stations and battery replacement stations will need to be built across the country. And those battery swap stations aren't quite the same as gas stations -- cars need to be driven up a ramp and serviced by a robot to their its batteries replaced.
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