Energy futureRenault/Nissan to turn Israel into electric car haven

Published 23 January 2008

Car makers, with the help of $1 billion investment from Project Better Place, will wire Israel with 500,000 charging points and 150 battery-swap stations where motorists can exchange their depleted batteries for recharged ones within about five minutes

The land of milk and honey would soon become the land of the electrical car. French car maker Renault and its Japanese partner Nissan the other day outlined an ambitious electric vehicle project backed by Israel’s government which hinges on quick battery exchanges at a network of filling station-type establishments. The FT’s John Reed and Fiona Harvey report that under the plan, Silicon Valley start-up Project Better Place will wire Israel with 500,000 charging points and 150 battery-swap stations where motorists can exchange their depleted batteries for recharged ones within about five minutes. Tests of the grid will begin this year, and Renault/Nissan will sell a new electric car from 2011.

The project will, if successful, help Israel reduce its reliance on oil and mark the largest nationwide roll-out of electric vehicles yet. Renault/ Nissan earlier this week said that the scheme marked “the first illustration of the alliance’s commitment to mass-market zero-emission vehicles all over the world.” Project Better Place will invest about $1 billion in Israel and plans similar projects in other densely populated small countries and municipalities. Nissan, through its joint venture with NEC, said it had created a lithium-ion battery pack that it plans to mass-produce for the vehicle. Renault said it was working on developing “exchangeable batteries for continuous mobility”.

The scheme aims to bring down sharply the retail price of electric cars by making their expensive batteries the property of an infrastructure company. “The big problem with electric vehicles is that the cost is higher,” Patrick Pélata, Renault executive vice-president, told the Financial Times. When asked whether Renault had mastered the technology behind battery swaps, however, he said: “We are not 100 per cent clear. It’s almost solved,” he added. “I think it will work.” Renault’s still-unnamed five-door sedan will be an electric version of one of the twenty-six new models the car maker had already said it was developing. Renault and Nissan would initially build the cars outside Israel, producing locally later if volumes warranted it.

The car makers are also exploring “other niches in Europe” for the vehicle, Pélata said, such as replacement sales of second cars whose owners drive them less than 100 km a day.

Electric cars have thus far failed to catch on because of high prices, short driving ranges, and limited charging infrastructure. It remains unclear whether Israelis will buy Renault/ Nissan’s cars in large numbers. “Electric cars are not a proven technology yet, so people have to wait and see whether it works in the way intended,” said Estelle Lloyd, founder of Venture Business Research. “Most consumers already have a car today and will wait until their current car is obsolete instead of buying a new one.” She said, however, that Project Better Place’s proposal was encouraging to investors who were looking at the potential of electric cars, but were put off by the lack of infrastructure available for them.