Musings

I was unable to find details of their subscription model. So take this with a grain of salt.

I assume you would be billed for the electricity (either when you plug into their network of outlets, or when you swap an empty battery for a full one). One of the places you would most frequently “plug in” is at home, and you certainly pay for the electricity there. So it would not make sense to make the electricity “free” elsewhere (creating the perverse incentive not to plug in at home).

I think what you are subscribing to is the battery. They own it; you get to use it (or another one, that you exchange for it, whenever you enter a swap station) for the life of the contract. And, while you’re subscribed, you get to use their network to recharge it, though you’ll pay for the electricity.

In fact, it would seem to me to be advantageous to allow multiple suppliers of electrical outlets (Mall owners, the owners of office and apartment complexes, …) and then to aggregate those charges on your monthly bill.

That way, one gets far better coverage, far more quickly. And the end-user doesn’t have to hassle with a zillion micro-payments (a kilowatt-hour here, 20 kilowatt-hours there, …).

In that way, it would work a lot like the way access and line charges work in today’s cell phone (and, for that matter, landline) networks. The proceeds from your monthly bill are split between multiple service-providers. But all the micro-payment details are “hidden” from the end-user.

Mmmm. Bad news.

In a panel discussion at the Brookings Institute, Agassi indicates that one of their subscription plans will include the electricity.

This makes no sense to me. Unlike the example of unlimited calling on the cell phone network, this actually costs real money.

The marginal cost of carrying another call on the cell network is near zero. All the costs are fixed costs (of the network infrastructure). As a provider, it makes sense to charge a large, fixed, fee for essentially “unlimited” access.

But the electricity for their electric vehicles costs 6¢ per mile. I don’t see any way an unlimited plan can make financial sense.

“Makes no sense” is a little bit of an overstatement. But you’re right that burning fossil fuels in an electrical power plant is not much of an improvement over burning them in an internal combustion engine.

There are two factors which work in their favour.

1. Automobiles account for “only” 6% of total energy consumption. Over a decade, that’s a very modest per-year addition of capacity to the electrical grid. Doable, they say, from green sources.
2. Most of this power will be required at night (when everyone’s car is plugged in at home). This is currently an off-peak period for electrical demand. Most power plants cycle down late at night. A single 2 MW wind power plant could operate full-tilt (if you’ll pardon the pun) at night, and supply the energy needed for 3000 cars. France, which gets most of its electricity from nuclear power, could supply all of the needed additional generating capacity, without — apparently — building a single new nuclear plant.

More broadly, though, we should be working as hard as possible to bring as much non-CO₂-emitting generating capacity as possible. One hopes that that would cover the additional demand from replacing gasoline-powered cars by electric vehicles, and then some.

Anyway, you knew that. So perhaps the first application of widespread pure electric car technology in the US would be in a dense metropolitan area: Greater Boston for instance? LA is an outside possibility - NOT dense, but air quality is an argument.

Realistically you’d have to stop at hybrids, since rather few people in the US want to give up the possibility of driving much farther than the state boundary.

The ‘unlimited’ subscription option might work simply because no-one can drive more than a certain number of hours per day and stay sane. Estimate that number of hours, divide by some reasonable factor and that’s the cost of an ‘unlimited’ subscription.

That’s exactly the point. It’s pretty darned easy to estimate the value of such a subscription. Every car has an odometer, so most people have a pretty good idea how many miles they drive, on average, per month. Multiply that by 6¢/mile, and you have a pretty good idea of the value.

Not so with other things, like cell-phone usage, or per-byte charges for internet access. Clay Shirky’s The Case Against Micropayments is a classic essay explaining why people prefer “unlimited” plans in situations like that.

This, however, seems like an instance where electricity costs are fairly predictable. Hence the rationale for an ‘unlimited’ plan is rather weak.

There is an obvious reason why an electric vehicle plan that works in Israel is very unlikely to work in the US. Namely, it’s quite difficult to drive more than 100km in any direction within Israel, especially if you prefer to reach some kind of town at the end of the journey. Whereas the long-distance road trip, typically crossing large stretches of barely-inhabited farmland, is a basic part of American culture.

Denmark and Portugal are also fairly small countries.

But that’s not a-priori the impediment. What you need is an assurance that, wherever you’re headed, you’ll run into a swap station every 70 km or so.

If you’re driven through the Arizona desert, you’ve seen signs on the side of the highway that say

Next Gas, 100 Miles

Most places, though, gas stations are more closely spaced than that.

Building the kind of infrastructure that would be required for electric vehicles is a much more daunting task in a country this size, than in Israel or Denmark.

But even in those countries, no one would put up the money to build the recharging/swap infrastructure, if they could not be sure the demand would be there. Hence the crucial role of goverment (tax) policy in motivating consumers to switch (and to switch earlier, rather than later).

Realistically you’d have to stop at hybrids …

I’m pretty convinced that even the US will, eventually, go all-electric. The only question is: will they be be among the first or among the last to convert?

The ‘unlimited’ subscription option might work simply because no-one can drive more than a certain number of hours per day and stay sane. Estimate that number of hours, divide by some reasonable factor and that’s the cost of an ‘unlimited’ subscription.

The problem with flat-rate electricity is that it makes the marginal cost of driving zero and that’s bad for the environment. Already with gas vehicles, the marginal cost of driving is too low to disincentivize driving enough from the environmental point of view.