On the grid: Palo Alto CEO leads electric car movement in Israel

With fuel close to $4 a gallon in the Bay Area, many environmental and consumer advocates say the time is now to make electric car technology readily available.

But while consumers may agree, they have been hesitant to buy the green vehicles, in part due to concerns about having to recharge them often.

Now one Israeli American CEO wants to tackle the problem by creating a network of recharging stations in Israel, Denmark and, eventually, the United States.

Shai Agassi, 39, is the affable businessman with boyish good looks behind Project Better Place, a Palo Alto-based company that promises to end Israel’s dependence on oil within a decade. He has already secured $200 million in investment, with companies such as Israel Corp. and Morgan Stanley, as well as private backers, funding his idea. And the Israeli government earlier this year got on board with Agassi’s idea, supporting the company’s work and pledging tax incentives for fuel-free drivers.

Agassi’s plan is to create a grid of stations where drivers can recharge or exchange their depleted electric car battery in under five minutes. Many of these stations will be placed at shopping mall and restaurant parking lots, while others will be added to existing gas stations.

“If you build infrastructure networks after you’ve built the product, people just won’t buy it,” said Agassi in a recent speech at the New Democratic Network. “If I told you we have a cell phone that has no waves and is not cancerous and all the other ones kill you, but that we needed 100,000 people to buy them before we could put in the first tower, you’d say, ‘Sign me up to be 100,001.’ It’s the same with electric vehicles.”

Agassi has already partnered with the Renault-Nissan Alliance, the fourth-largest car company in the world, to create a vehicle that will use zero fuel without compromising speed, luxury or looks. The goal is for its lithium-ion battery to last 100 miles before needing to be recharged.

Agassi was born and raised in Israel and started two companies while still in his 20s. One of them was acquired by SAP AG, the German software giant, where the young businessman rose through the ranks to become second in command. But when he was passed up for promotion in 2007, he decided to strike out on his own. He didn’t waste any time, launching Project Better Place in October 2007.

Since then, the venture has created a major buzz not only in Silicon Valley, which is quickly becoming a hotbed of green technology, but also in Europe and Asia.

Felix Kramer, founder of California Cars Initiative, a Palo Alto group that advocates for carmakers to build hybrids, says Agassi’s plan is promising, especially because he has been able to engage automakers in the process.

“The whole trend toward plug-in cars is gathering momentum more rapidly than anyone expected, and Agassi has been able to put together significant resources and find an automotive partner, which counts for a lot,” Kramer said.

But plenty of questions about the feasibility of the project remain, such as engineering and standardization issues. For example: How big will the battery have to be to last up to 100 miles? And will competing carmakers agree to make compatible batteries?

“If there is only one type of car and one type of battery, it’s not a problem, but if it goes beyond that, it becomes a challenge,” Kramer said. “A station would have to maintain an inventory of batteries, and the world has a lot of trouble standardizing on anything.”

Agassi has said that Israel is the perfect place to test his project (90 percent of car owners drive fewer than 43.5 miles per day), but some people question whether the network of charging stations is suitable for a larger country such as the U.S. They also wonder whether American drivers, long sold the idea of freedom and independence in car ads, will feel comfortable setting off on longer trips in their electric cars unless there is an extensive network of stations where they could easily replace batteries.

Project Better Place counters that its model is applicable to all countries, although a company spokesperson admitted that the ideal conditions, at least initially, will be countries whose geographic area is small and highly urbanized.

Still, many say Agassi’s idea is nothing less than revolutionary: It will curb CO2 emissions, create a safer geopolitical climate by lessening countries’ dependence on oil and save governments billions of dollars. The U.S., for example, spends $550 billion a year importing and refining crude oil, money that instead could be put into alternative sources of energy, such as solar or thermal, Agassi has said.

“Shai not only imagined a world in which transportation functioned without oil, but crafted a strategy to create one and to do so without inventing anything new, using what’s here and now,” said Michael Granoff, president and CEO of Maniv Bioventures, during a speech at the New Democratic Network earlier this year. “He has done for transportation what Google did for information.”

Today Agassi is busy traveling the world to promote his new venture and is in negotiations to develop his product with 30 countries. What motivates him most is a question he was asked while attending the World Economic Forum’s Young Global Leaders Summit: What will you do to save the world by 2020?

“The more you think about it, the more you understand — our way of living, our freedoms, our kids’ future depends on solving this problem using the science and technology we have in our hands today,” Agassi said at a press conference earlier this year. “We don’t have time for a science experiment.”