Stonehill now has the task of overseeing Better Place’s capital-raising operations in this extraordinarily tough market for securing financing. Despite the challenges, he believes there are bright spots — starting with the demand the company expects for all-electric autos. According to a worldwide survey from Continental Automotive, 45.8 percent of motorists are at least interested in buying an electric car.
Here is an edited version of our interview with Stonehill.
What is the business model that Better Place envisions to serve electric-car drivers?
Most importantly, we need to build the infrastructure that will allow people to regularly charge up their cars with more electric miles. They’ll do that at charge points at their homes, offices, and other public places where they park their cars, such as garages and parking spaces on the streets. For a journey longer than the range of the electric miles in their car, they will have to do exactly what they do [today] when they go to a garage and fill up with more gas.
They’ll have to effectively get more miles by exchanging their depleted battery for a charged battery at one of our switch stations. So they will drive into a switch station, remove the battery from the car, put in a fully charged battery, and go off again in what we believe will be less time they would normally spend filling up their car at a gas station.
Car makers will obviously need to build cars with removable batteries. We will build the stations and other charge points, and provide technology that we will install in cars to alert people where they need to go to charge their car or exchange their battery. There will be a significant amount of software in the car that will help them have a complete driving experience.
What does the pricing model for providing electricity to cars look like?
When someone buys a car, they will sign a multi-year contract, just as with a cell phone. Like that model provides a guaranteed amount of talk time for a monthly contract, we will give our customers a guaranteed amount of electric travel miles for the amount they’re paying. There will be various types of contracts, including the possibility of unlimited driving.
Where does Better Place stand along the path to achieving these goals?
The company came into being in terms of its initial seed-capital raising just over a year ago, with a round of $200 million. Since then we have begun to deploy, or prepare to deploy, in Israel, Denmark, Australia, Hawaii, the San Francisco Bay Area, and Ontario. And we are in discussions with a large number of other countries and areas.
Uur initial markets are Israel and Denmark, where we have operating companies and management teams. In Denmark we have worked with DONG, the state oil and gas utility, to raise around $133 million. We are preparing an expected rollout for a mass market in 2011 and 2012. We will be going back to a broader market in Denmark and in Israel in the near future.