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Silicon Valley Nation: Lessons from Shai Agassi's downfall
Brian Fuller
10/3/2012 3:12 PM EDT
SAN FRANCISCO--Shai Agassi's ouster
as CEO of the battery-infrastructure company he founded,
Better Place, is an object lesson in techno-business strategy:
Breathtaking vision doesn't always track with reality.
Or, as Bill Clinton might say, "It's the infrastructure, stupid."
[Get a 10% discount on ARM TechCon 2012 conference passes by using promo code EDIT. Click here to learn about the show and register.]
Any technology idea is only as good as the infrastructure in place to support it; and any infrastructure needs to cotton to the human experience. They all sit on the shoulders of what preceded them.
Mobile phones took off because they were a mobile extension of a familiar technology; they've exploded as developers have built on that simple premise with software and apps, which, themselves, are built on another familiar experience, the personal computer. The television was an extension of not only radio but live in-person performances and so was understandable from a technology and human experience standpoint. Building the infrastructure was low risk because we knew the user experience would be familiar and transformative.
Rarely comes the innovation that hovers far away from those shoulders, untethered, but sometimes it has to happen because we understand the long-term social benefits. The railroad infrastructure had to be built to make the harnessing of motive steam power work, but society understood the long-term value in making the investment. Automobiles came next with no gas stations or roads to speak of at first, or even a use case in how to operate the vehicles, but we knew the enormous benefit that would accrue to society, and the alternatives were unacceptable or wearing thin.
Next: The Better Place model
Or, as Bill Clinton might say, "It's the infrastructure, stupid."
[Get a 10% discount on ARM TechCon 2012 conference passes by using promo code EDIT. Click here to learn about the show and register.]
Any technology idea is only as good as the infrastructure in place to support it; and any infrastructure needs to cotton to the human experience. They all sit on the shoulders of what preceded them.
Mobile phones took off because they were a mobile extension of a familiar technology; they've exploded as developers have built on that simple premise with software and apps, which, themselves, are built on another familiar experience, the personal computer. The television was an extension of not only radio but live in-person performances and so was understandable from a technology and human experience standpoint. Building the infrastructure was low risk because we knew the user experience would be familiar and transformative.
Rarely comes the innovation that hovers far away from those shoulders, untethered, but sometimes it has to happen because we understand the long-term social benefits. The railroad infrastructure had to be built to make the harnessing of motive steam power work, but society understood the long-term value in making the investment. Automobiles came next with no gas stations or roads to speak of at first, or even a use case in how to operate the vehicles, but we knew the enormous benefit that would accrue to society, and the alternatives were unacceptable or wearing thin.
Next: The Better Place model
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Bert22306
10/3/2012 4:30 PM EDT
Truth is, there's more to it than that. I don't even know any details of the ouster itself, but the idea was going to be a tough sell to any but the most ardent battery zealots.
Swapping batteries, no matter how much one pretends otherwise, is way more cumbersome and requires a whole lot more effort than pumping a few gallong of gasoline or diesel. You are handling huge, heavy, bulky, items, and you have to do so perhaps 3-5 times as often as anyone needs to stop for gasoline. And that's only true if the batteries are truly enormous, like even bigger that what is in a Chevy Volt.
So, I'm not surprised the idea isn't a slam dunk, in the real world.
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resistion
10/3/2012 10:54 PM EDT
Who will pay for the infrastructure change?
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Hasmon
10/4/2012 1:44 PM EDT
Swapping the batteries is a silly idea...batteries in an electric car are the one component which depreciates the most and adds the most cost to the car.
A system that lets you just leave your worn out $10,000 battery at the gas station and driving away with a brand new one is ridiculous.
This is a simple failure of economics and psychology. We like to "own" our cars. Companies like to sell us stuff and let us own the problems too. This new business model fails on both counts.
Maybe it could work at Disney world, on a golf course, or some simple scenario like that...where the lifetime of the transaction is measured in days (not years) and the maximum distance travelled is 100km or less.
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Frank Eory
10/4/2012 3:56 PM EDT
Agreed, and I just posted a similar comment on the Tesla supercharger story.
Nobody is going to replace their newer, less worn-out batteries with older ones at the charging station, and the economics won't justify stocking the charging station with only brand-new batteries -- the used ones will still need to be installed in other EVs somewhere.
There is also the auto mechanic staffing & labor cost issue. Swapping out batteries in an EV isn't quite the same as replacing your standard lead acid battery in the parking lot of the auto parts store!
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I_B_GREEN
10/11/2012 12:17 PM EDT
Umm there recharable helloow
And since your just renting/leasing the battery pack its not an issue if you get a less than perfect pack, just go back and have it replaced.
QOS and bad packs need to be romoved from the stream to provide positive experences on average.
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I_B_GREEN
10/11/2012 12:15 PM EDT
umm there rechargable not primary batteries
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ejwipp
10/4/2012 3:41 PM EDT
I don't think swapping batteries is a silly idea. In fact, it is a great idea. Better place's strategy is just not cost effective.
Battery swapping prevents car owners from having to own one of the most expensive parts of an electric vehicle. In addition, the unused batteries can be used for grid stabilization. The batteries can be charged during off peak hours and could potentially supply power to the grid during peaks. In other words, the batteries can be an asset to power companies.
In China, a company called Kandi Technologies (NASDAQ: KNDI) has partnered with State Grid, China's largest power company. They are pushing this concept through their QBX platform or quick exchange. They have implemented an automatic battery swapping solution that is cost effective, unlike Better Place's system. Kandi recently announced that 5000 of their EV's will be delivered by year end. This program is being subsidized by all levels of the Chinese government and is just the beginning in China. China wants to end its reliance on foreign oil and is actually beginning to take steps towards that goal.
Would this solution work in the states? I don't know. Many Chinese have never owned a car and thus are not deterred by the limited range of EVs. In addition, they typically live close to where they work. Here in the states that is not necessarily true.
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I_B_GREEN
10/11/2012 12:18 PM EDT
see owner swappable comment I made.
allows concept to be cost effective.
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brent.marsh_#1
10/9/2012 1:29 PM EDT
The only way I think it could work is to lease the vehicles based on distance traveled and your choice of car. This way the utilities, the battery makers, the car makers, and the charging infrastructure guys could sit down and figure out the economic model. People already lease cars and buy gas. I think once they all sit down and figure out the numbers; they could figure out how to offer a fixed lease cost to drive a distance, depending on the car you want. Remember GM's fuel cell auto drive platform? You keep the platform, but you can change out the chassis' over time. The model is not too dissimilar for EVs with battery change outs, except the various parties are responsible for their respective commitments. As long as they are comfortable with their respective confidence to manage their technology/finance risks over a 15-25 year period, then this dispersed risk model makes sense.
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I_B_GREEN
10/11/2012 12:12 PM EDT
A better idea is to have smaller modular battery packs that can be installed by the owner.
have both permanent battery storage and replaceable storage modules for meduim and long range extension without waiting.
Also the idea of a towable extender battery or ICe or both
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