Ontario’s electric car infrastructure will use “cell phone” business plan

Ontarians could soon be paying a monthly bill to power their cars with clean electricity instead of paying at the pumps to fill up on gasoline, the government revealed in an announcement yesterday.

Premier Dalton McGuinty announced the province is partnering with Palo Alto, Calif.-based Better Place LLC to create a province-wide grid that could conveniently power electric cars. Drivers will pay to charge up their car batteries in the same way they pay for their mobile phone bills – through a combination subscription-based system, and pay-per-use model.

“Commuters will be able to buy miles for their car like they buy music for their iPods or minutes for their cell phones,” McGuinty said at a press conference in Toronto. “That’s an idea with the power to re-shape our province.”

Much like how your cell phone contract helps to subsidize the expensive handset you purchase with your plan, your electric car could also be subsidized with your subscription to using the electric infrastructure.

Founded in 2007, Better Place describes themselves as a mobility company that sells access to their network. It just so happens that this network will be used to refuel your car – or more accurately, recharge. Company founder and CEO Shai Agassi espouses the environmental benefits of getting cars off petroleum, and on to electricity produced via renewable resources that are free of carbon emissions.

Agassi is a former executive from enterprise software company SAP AG. He brought over some other former SAP employees to work with him at Better Place.

“Agassi was next in line to be CEO at SAP,” says Sean Harrington, director of business development at Better Place. “It speaks to the more systematic and holistic approach that you see in software design being applied to our business model. We’re asking how electric vehicles can be made more convenient than gas vehicles.”

The company has been in discussions with 25 different countries to provide their electric car charging infrastructure. Charging stations will be built at homes, offices, and retail locations. Battery replacement stations would allow drivers to swap out a depleted battery for a fully-charged one, in about the same amount of time it takes to fill up a tank of gas.

“We’re effectively creating a virtual oil field across the province,” Agassi said at the press conference. “We’re creating an electric road.”

The charge spots will provide quicker charging of vehicles than a standard home outlet, Harrington explains. They will provide 220v output as opposed to the standard 110v output. Each charge spot will also be outfitted with software that links it to a centralized system that can determine when is the best time to charge the vehicle.

As Better Place develops the plan and timeline for rolling out its car-charging network, the Ontario government will help push the vehicles that will be connecting to it. A study will be conducted that will aim to look at ways to speed up the introduction and adoption of electric cars – it is slated for release in May.

“Our main commitment was to promote [adoption] of the electric car by the public,” says Sandra Pupatello, Ontario’s Minister of International Trade and Investment. “Consumers need to have the same confidence that they do right now when that fuel gauge hits empty, they can pull over and fill up again.”

Several consumer incentives will be considered, such as financial rebates for purchasing an electric car, and giving preferred access in the transportation grid to electric cars. Government fleets will also look to adopt the vehicles and Ontario will coordinate a public promotion for electric cars, according to the province.

Several auto makers have plans to manufacture electric cars.

General Motors plans to start selling the Chevrolet Volt in 2010, which will travel more than 60 km before burning gasoline.

Ford Motor Co. and Magna International Inc. announced at the North American International Auto Show on Monday that they are working together to sell an electric car by 2011. That car will plug into standard electricity outlets and recharge completely in eight hours.

Nissan and Renault have partnered with Better Place so far, Harrington says. The company hopes to manufacture electric cars in Ontario.

Better Place is also partnering with Toronto-based Bullfrog Power as the supplier for its electricity. The power retailer produces electricity from emission-free, renewable resources such as windmills and water power. It offers services to homes and businesses in Ontario and Alberta.

Home customers currently pay about $1 more per day than regular customers on the grid, says Tom Heintzman, president of Bullfrog. But he doesn’t anticipate buying electricity will be the main cost for Better Place.

“Electricity is just one portion of the ingredients that they put together to deliver kilometers at the other end,” he says. “Replacing degraded batteries will be more costly, for example.”

Outlets provided by Better Place aren’t your typical home outlet. When a driver plugs in a car, software will determine the degree of need for battery recharging and prioritize it among all other cars plugged into a charge spot.

“If everyone just plugged in to outlets on demand, it would crash the system,” Heintzman says. “This software will manage the electricity requirements of all these different vehicles.”

The software will even monitor the driving patterns of different cars to help determine when and how they get recharged. But if a driver is in need of a quick boost, they can request faster service from the charge spot, Harrington says.

“The charge spot is authenticated with the car,” he says. “The car tells the spot its number and then it communicates with a server and control centre and in a very smart way, that is able to decide what car should be charged depending on what’s going on with the grid.”

Better Place will open up its Canadian head office in Ontario as part of the deal. It will also build an electric vehicle demo and education centre in Toronto.

Construction of the grid will begin in 2010 and electric cars could be on the roads by 2011 or 2012, Pupatello says.

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