Small and densely populated countries offer fertile ground for the usage of electric vehicles and the setting up of battery charging infrastructures. In this third instalment of November's just-auto management briefing looking at EV infrastructure, we take a closer look at developments in Israel and Denmark. 

A plan to install an electric car network has been approved by Israel’s government, making this small Middle East country a global leader in electric vehicle (EV) technology.
 
The project is a joint venture between Renault-Nissan, which will provide the electric vehicles, and a Silicon Valley, USA-based start-up project Better Place, which will operate the re-charging grid. “The replacement and charging of the lithium-ion batteries is supposed to work like that of a cell phone battery,” according to a technical paper.

The initiative was conceived by Mr Shai Agassi, an Israeli-American entrepreneur, who raised USD200m to get the project off the ground. Better Place has been involved in a series of similar ventures around the world, including in another small country – Denmark – but also in Canada, Australia, China, Japan and the USA.

The Israeli system is due to be launched in Israel in 2011 after a series of tests, and after the necessary legislation has been passed by the Israeli Knesset, according to Mr Tal Agassi, vice president of the global infrastructure deployment and operations unit of Better Place in Israel, and also Shai Agassi’s brother. The legislation would apply to the installation of “charge points” and “battery switch stations” needed for refuelling, and the companies who would operate them. Mr Agassi said that currently the only companies allowed to install equipment in the public domain are Israel’s electricity company (the Israel Electric Corporation), and Bezeq, the government-controlled telephone company, which has a monopoly.

The idea behind Better Place – founded three and a half years ago and supported by companies such as Morgan Stanley, Vantage Point and Israel Corp – was to try to “find a way to get disconnected from oil operated vehicles, to find an alternative. At first we didn’t know what the right solution was,” Mr Agassi explained. He said the idea was to “make electric vehicles affordable. We don’t expect people to pay more, nor to compromise.”

Taking the comparison further between EV technology and cell phones, Tal Agassi clarified, the company will “provide with you a device – the electric car” and you pay by the minute. The car itself can be bought or leased. Incentives for helping the EV become “mass adopted” could include “free parking for electric vehicles, and significantly lower taxation on zero emission cars,” he said. So far, 1,000 “charge spots” such as wall plugs in houses, offices and parking lots have been installed in Tel Aviv and a handful in Jerusalem.

Supporters of the initiative see it as a “bold step in the battle against global warming and energy dependency.” Shai Agassi’s spokesman said Israel was the ideal laboratory to market his vision because of its high fuel prices (around USD6.30 a gallon), dense population centres and supportive government. In Israel, 90% of car owners drive less than 45 miles per day and all major urban centres are less than 100 miles apart, making the use of battery operated cars more feasible than in countries with longer average commutes.

Shai Agassi said: “Our planet’s battery was charged over hundreds of millions of years, and yet we have consumed half the world’s oil in one century. In the process, we became addicted to oil, polluted our cities and altered our planet’s climate.”

His company has also been involved with helping Denmark, another small country, become a trailblazer in creating a feasible and enthusiastic future for EV and its refuelling infrastructure. Denmark’s enduring love affair with renewable energy and clean technology solutions has reached new heights, in the wake of the government's commitment to develop a global hub to develop and test electric cars.

"Denmark's tax system makes the price difference between a combustion engine car and an electric car relatively small. Once electric cars are exempted from a tax of 180%, the price difference between electric and combustion engine cars is evened out," said Morten Rask, an Aarhus-based automotive markets analyst.
 
Moreover, the state-backed Edison project (the acronym means ‘Electric Vehicles in a Distributed and Integrated Market using Sustainable Energy and Open Networks’) is developing an intelligent electrical power infrastructure which will make it possible to integrate increasing amounts of Danish wind power into the grid to charge EV batteries.

The ‘hub’ status aspiration is backed by a government guarantee to extend the registration of the tax-free period for electric cars to 2015. The decision has sparked a stream of capital investment activity in the core areas of electric network infrastructure, vehicle testing, and battery production projects.

Renault, which plans to invest EUR4bn in developing electric cars, has earmarked Denmark for the European launch of its Renault ZE models in 2011. The French company has joined forces with the Nissan Motor Company to roll out four mass-market models in 2011 and 2012.
 
This Renault-Nissan combo has been backing the Better Place project in Denmark as well, working with Danish state energy company Dong (Danish oil and natural gas). Better Place plans to launch a battery exchange network in 2011. It had initially projected servicing up to 500,000 battery-powered EVs in Denmark by 2020. However, this estimate was scaled-back in July to under 100,000.

"Initially, an electric car may be twice as expensive to produce as a conventional car, but eventually the difference in costs will level out," said Henrik Bang, Renault's country director in Denmark.

Meanwhile, Denmark is also the home of a smaller local EV infrastructure project: Business Centre Bornholm has joined with Hong Kong's EuAuto, the maker of the mycar EV to open a global test charging network on Bornholm Island in the Baltic Sea.
 
In June, Mitsubishi Motors Corporation (MMC) signed a Memorandum of Understanding (MoU) with the Danish government that paves the way for the Japanese company to launch its i-MiEV EV in Denmark in 2011. The Danish state will purchase an undisclosed number of i-MiEVs by 2016. The range of investments triggered by Denmark's tax-initiative covers EV batteries. Positive Energies, a Danish controlled investment company, has allied with Amita, the Taiwanese subsidiary of GP Batteries, to build a plant to produce 40,000 lithium polymer EV batteries annually for Danish and European markets.

Elsewhere, Better Place has signed a partnership deal with General Electric (GE) under which the US company will supply up to 8,000 EV batteries to its Danish operation. In a landmark agreement, PBP has negotiated a deal with state railway company DSB to open EV hire depots at DSB's city and provincial stations.

By Helena Flusfelder in Jerusalem; and Gerard O'Dwyer, in Copenhagen

See also: November 2010 management briefing: EV battery charging networks and roll-out issues