The expansion plans of electric car network company, Better Place, have been bolstered by another $200 million ($197 million) in funds from major investors including General Electric and UBS.
The latest injection brings to $US750 million the funds raised by the Israel-based technology firm since its founding in 2007, and represents a ‘‘resounding validation’’ of the future of electric cars and battery charging systems, according Evan Thornley, the entrepreneur and former politician who heads Better Place’s Australian operations.
Existing shareholders, including Israel Corp., HSBC and Morgan Stanley, also joined the latest investment round, which valued the company at $US2.25 billion, the company said.
‘‘I think we’ve raised more venture capital than any other company on Earth over the past three years,’’ Mr Thornley said.
Much of the new cash will pay for the roll-out of electric cars in Denmark and Israel in coming months. Australia remains the company’s next priority with a network of plug-in points for recharging and battery-switching sites planned for the ACT starting from the second quarter of 2012.
By the end of 2013, Better Place aims to have the first continent-wide network supporting electric vehicles across Australia, which will also serve as a test run for North America. ‘‘The vehicle format, the urban formats, even the regulatory regimes are very similar, so this is very much the launch pad, I think, of what we’ll be ultimately doing in North America,’’ Mr Thornley said.
GE is already a partner with Better Place. In July, the company’s finance unit announced plans to buy at least 1000 electric cars to lease to fleet customers in Australia over the next four years.
‘‘This is a powerful opportunity for these companies to do something with a global scale,’’ Mr Thornley said.
Carbon tax
The prospects for companies supplying low- or zero-carbon products clearly received a boost last week with the passage of the federal government’s carbon tax bills. Mr Thornley, though, said his company’s business model is already based on sourcing 100 per cent renewable energy and isn’t dependent on a carbon price.
‘‘The underlying realities are that as battery prices keep dropping and as petrol prices keep rising, Better Place’s business is in a very strong economic position,’’ he said. ‘‘We’ve never tried to build a business to rely on or require any form of government funding for us, or for our customers or a carbon tax.’’
‘‘We obviously welcome the government putting a price on carbon,’’ he said. ‘‘It obviously reflects a desire to (make) an economy that is resilient in the transformation to a low-carbon environment.’’
Mr Thornley told BusinessDay in April that people paying $80 a week in petrol would be better off switching to an electric car, a figure he stands by. The ‘‘sweet spot’’ for electric vehicles remains owners on the urban outskirts who drive large cars with relatively poor fuel economies long distances.
A one-term state Labor politician in Victoria before he quit politics in 2008, Mr Thornley predicts leaders will back emerging technologies regardless of their own political stripe.
‘‘People in the outer suburbs…who have high petrol bills and modest incomes are desperate for an alternative to petrol,’’ he said. ‘‘To politicians, those people are known as swing voters.’’
Another point of political appeal will be the thousands of new jobs Mr Thornley expects to be generated by the construction of the recharging network, with employment to range from electricians and suppliers to call-centre operators.
Grid strain
Mr Thornley said power companies had legitimate concerns about the potential demand strain on power supplies if thousands of car users plug in to recharge their batteries at the same time. Better Place, he said, had invested $400 million on hardware and software to ensure battery recharging worked to flatten out power demand rather than exacerbate peak loads.
‘‘Because we know the state of charge of every battery, we can turn every plug-in point on or off or up or down,’’ he said. ‘‘We are able to ensure that the charging always meets the needs of the drivers but does so in harmony with the grid.’’
Electric car demand won’t arc up until the arrival of mass-market vehicles, such as Renault’s Fluence Z.E. sedan from the middle of next year.
Even then buyers will need to be convinced that the battery range, recharging convenience and overall cost of the car is worth the switch from traditional petrol- or diesel-powered alternatives.
Mr Thornley is confident the transformation of the transport industry is inevitable and Better Place’s ability to raise funds during trying financial times indicates that confidence is shared.
