Innovative Mass Marketing of Renault Electric Cars

Israel is an ideal location for widespread use of battery electric cars. A small country with a warm climate, Israel has to import virtually all oil used from hostile neighbors and gasoline costs over $6 a gallon. Ninety-percent of vehicle owners drive less than 40 miles daily and all the major urban centers are less than 90 miles apart. Its citizens and the government are also concerned with air quality and CO2 emissions.

Recently, the Renault-Nissan Alliance and Project Better Place formed a joint venture to mass-market battery electric vehicles in Israel. The marriage is in response to the Israeli government's challenge to the auto industry and its suppliers to move the country's transportation infrastructure to renewable sources of energy. The Israeli government will provide customer tax incentives to spur sales by making the cars more affordable. The Israeli government recently extended a tax incentive on the purchase of any zero-emission vehicle until 2019.

Renault would supply the electric vehicles, which it says will offer performance similar to a car powered by a 1.6 liter gasoline engine with a range of about 125 miles. The Renault EVs will use lithium-ion batteries produced by Automotive Energy Supply Corp., a joint venture between Nissan Motor, NEC Corp., and NEC TOKIN Corp. A very conventional-looking, four-door prototype has been developed and shown. The first electric vehicles will be available for customers in 2011.

California-based Project Better Place, formed by American-Israeli entrepreneur Shai Agassi to promote EVs worldwide, will construct and operate an electric recharge grid across the entire country. Reportedly, Project Better Place has put up $100 million for the project. This infrastructure will include some 500,000 charging locations throughout Israel so range will no longer be an obstacle to EV operation. An on-board computer will keep a driver briefed about remaining charge and the location of the nearest charging spot.

While EV owners will buy and own their electric car, they will subscribe to the energy grid with payment based on kilometers driven. This includes the use, but not purchase, of the battery. This business model is like that used for cell phone service. Combined with the lower cost of electricity, the objective is to make an electric car's operating cost less than that of a gasoline car.