Shai Agassi has an idea so revolutionary it’s convinced venture capitalists to commit hundreds of millions of dollars, major corporations to sign on, and the leaders of countries around the world scrambling to sign up to be the guinea pigs for his new technology. It’s also an idea that, as soon as it is heard by many Americans, causes them to sneer. Perhaps this response should be no surprise, since Agassi’s idea aims to completely revolutionize the quintessential American mode of transport, the automobile.

Automobiles are ripe for re-invention, but progress is halting. Between pure electric, fuel cells, ethanol, plug-in hybrids, and natural gas vehicles, the technology of the sustainable auto of the future is anything but clear. Other, less practical concepts abound. Some urbanists are keen to make the city totally car-free, based around bicycles, walking, and transit.

The Concept

Agassi, formerly an executive with the global software company SAP, struck upon what he thinks will become a paradigm shift for the auto. In his plan, owners of electric vehicles subscribe with his company. In exchange for the fees they pay (carefully calibrated to be below the cost of operating a gasoline vehicle) they get the right to swap their batteries at a large network of re-fueling stations, or charge up at special plug-in spots located at work or even their home. The car’s computer shows the way when the charge is low. The company charges the batteries using wind farms, solar generation, and other sustainable sources. The difference between the subscriber fees and the amortized cost of the infrastructure and battery service is pure profit. Countries eager to shift their transportation systems away from petroleum can further encourage a shift to electric technology through tax differentials on the autos themselves. Israel has planned a differential based on environmental impact: electric cars will be taxed at a 10 percent rate, compared with 79 percent on gas-powered cars and 30 percent on hybrids.

What about the notorious range problem for all-electric vehicles? Better Place claims their vehicle, developed by the Renault-Nissan Alliance, will have a range of 100 miles. Roughly 95% of all daily auto trips in the U.S. are less than 30 miles, and over 99% are less than 100 miles. Given a liberal smattering of battery changing stations, the range problem is vastly reduced.

The logic is compelling. After all, we already use one privately owned network infrastructure on a daily basis, for cellular phones. The subscriber model means most can get phones for very low cost, and a vibrant market exists for new and used handsets. The dashing CEO has been convincing quite a few political leaders, with deals inked to build networks in Denmark, Israel, and Australia, and plans underway for Hawaii and the San Francisco region. The governor of economically beleaguered state of Michigan even took a test drive in the company’s prototype in November. (above)

Urban Effects

In general I’m not as skeptical as some critics. The concept seems sound, particularly for geographically compact regions like Israel and Hawaii. But what will the impact of the Better Place system be on our cities? Some would obviously be positive. Since private vehicles are major sources of air pollution, mass adoption of electric vehicles will result in immediately improved public health and cleaner air. Taxicabs and Zipcars (already leased from designated parking spots) could be converted to clean, all-electric fleets.

When it comes to urban form, the result is less clear. In the words of two Israeli environmentalists:

Car-based transportation requires the building of more highways and roads, new bridges and intersections that would take up land; it also creates the conditions for urban sprawl, which would take up even more land. This is a non-sustainable solution for Israel.

But would it? Conventional urban economic theory holds that that transportation systems increase the spatial extent (and decrease density) of the city if they reduce the cost of transportation. If we assume the network covers the entire metropolitan area, and the Better Place system was less expensive than gasoline cars, it could encourage sprawl and cause new, electric-car fueled traffic congestion on our roads. The networked system might result in a altogether new urban form, both less centralized than the rail-dominated cities of the early 20th century, or the formless sprawl facilitated by the long range of gasoline vehicles. Slightly shorter ranges than gasoline combined with the modern economy could encourage the development of polycentric urban areas, perhaps unintentionally anticipated in this Wired illustration of the Better Place network, where freeways loop strangely around nodes of skyscrapers and no sidewalks are in sight.

In fact, Agassi’s plan could have another unintended effect: boosting the number of cars in the city. In a worst-case scenario, where the network (or tax policies) subsidize the cost of the vehicle and make driving even cheaper than gasoline transport, Better Place could boost rates of auto ownership and distance traveled, exacerbating parking shortages and traffic.

How can we avoid these outcomes? Property pricing parking and abolishing parking requirements in urban areas would help auto owners bear the true cost of their intensive use of urban space and ensure all vehicles can park. Congestion pricing policies could reduce congestion in dense urban areas, shifting travel to more space-efficient transit. Our cities will need continued transit investment.

With the first charging station open in Israel and Renault-Nissan’s vehicles set to hit Israeli streets in 2011, these questions may be answered in just a few years.

> Wired: “Driven: Shai Agassi’s Audacious Plan to Put Electric Cars on the Road”
> Economist: “Renault-Nissan’s ambitious plans for all-electric cars”
> Better Place

Better Place photos: Renault-Nissan electric car in Denmark, Better Place Israel CEO at the first charging station, Better Place CEO Shai Agassi and Michigan Governor Jennifer Granholm; Wired Magazine illustration