The big car companies are starting to introduce electric models -- GM has the Volt, and Nissan will introduce the Leaf this year. But the biggest innovations are happening in Silicon Valley, not Detroit.
A big car company would probably never hire a software guy like Jason Wolf to head up its North American division. But at a time when President Obama is pushing to have more electric cars on the road, Wolf is doing just that. He runs the North America division of a company called Better Place.
Better Place wants to change the way people drive, and it wants to take on the big boys like GM and Nissan. But it's probably better to call it a tech company than a car company.
Obama says he wants a million electric cars on American roads within five years.
"I'm committed to a strategy that ensures America leads in the design and the deployment of the next generation of clean-energy vehicles," he says.
All this is great news for companies like Better Place. It means government-backed loans are being made available to develop the technology.
The big companies are starting to jump on the electric bandwagon: Nissan's all-electric Leaf and GM's dual gas-electric Volt both debut later this year. But the biggest innovations aren't only happening in Detroit and Yokohama.
They're also happening in the place that brought you the iPod and the microchip: Silicon Valley.
The Payment Model
And Wolf is betting that consumers will be willing to buy his car at a lower price than the competition but also pay a monthly subscription -- a deal that would cover all maintenance, battery changes and electricity.
"Today with a gasoline car, you buy your car and then you basically have a subscription with an oil company -- Exxon, Chevron, whoever. You drive to a gasoline station once a week, on average, and you fill up. That's your subscription. It's random. The price changes over time, you're not usually happy because you have to go out of your way," Wolf says. "With these vehicles, what you do is you get your subscription predetermined. Someone comes to your house and stores a charge spot, and basically you're happy just getting your energy without changing your behavior."
Better Place will own all the charge points, and it hopes to power them using alternative sources of energy like wind power.
The vision is that those charge points and battery switch stations will be built all across America. So if a driver's running low on power, say, and doesn't have time to re-charge, he or she can pull into an automated station and switch out the battery.
But to get to that future, there's one major obstacle to overcome: the price of gasoline.
Gasoline in America is relatively inexpensive. And so it's still a lot cheaper to buy a gas-powered car than an electric.
"The gasoline engine is fueled by a fuel that is subsidized and once you put in the externalities of what gasoline causes -- economically, environmentally, geopolitically -- then you will see a much quicker adoption," Wolf says.
Just a 45-second drive west of Better Place headquarters is Tesla Motors.
The company was founded seven years ago, and it started selling its all-electric Tesla Roadster in 2008.
This is not a car for everyone. The Tesla Roadster, a glorious two-seat sports car, is based on a model made by the British carmaker Lotus. The cars are available now for $109,000.
Tesla is unlikely to become a major car company. What sets it apart from the others is it has a head start. And besides, Tesla wants the competition, says Chief Technology Officer JB Straubel.
"If you look at the questions five years ago, it was more of, 'Well, nobody else is headed in this direction. How do you guys know that you're even going vaguely in the right place?' And, you know, I think we would be a lot more worried if no one in the entire industry was headed in this direction," Straubel says.
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