Scrapping petrol guzzlers

Anyone interested in buying a second hand Maserati in reasonably good condition?

Property developer Robert Magid, the CEO of TMD Developments and a director of the Australian Israeli Chamber of Commerce, said he would put his up for sale yesterday after listening to Better Place founder and CEO deliver his vision of a future of electric cars, and his apocalyptic predictions for the conventional automobile.

Agassi speaks with the confidence and enthusiasm of man convinced he can take on a $10 trillion industry – that's oil, cars, insurance and associated services combined – and win.

"The force of this business model is that we are betting on the inevitable,” Agassi says. The basis of his conviction is that oil prices are going one way – and that's up – and battery prices are going the other way – and that of course is down.

Tie this in with a business plan that he says will deliver a cheap, fast, reliable vehicle and a battery that is easy to recharge or replace – and can deliver kilometres at a cheaper rate than conventional automobiles – and Agassi is certain he in on a winner.

So much so that he says there will be one billion electric vehicles on the world's roads by 2020, and not long after that petrol-fuelled vehicles will be a mere curiosity.

Agassi believes mass-produced electric vehicles will cost only $10,000 to produce within 5-10 years, and will cost around 5c a kilometre to run. Better Place also proposes a mobile-phone type contract where vehicles are obtained on a pay-per-kilometre basis.

"Change will happen so fast,” he says. "I will tell you why I'm sure about this. Because if I am wrong, the price of oil will be at $US200 a barrel, and I will be able to subsidise the price of electric cars so far that there will be a billion electric cars by 2020. If I buy a gasoline car I might be the last idiot that cannot sell it.”

Hence the for sale sign on Magid's Maserati.

"If we're right we'll get there fast, and if we wrong we'll have to wait a year and then get there fast,” Agassi says. "It doesn't really matter, it is an inevitable conclusion.”

Better Place has struck agreements to create electric car networks in Israel, Denmark, and cities in Canada and the US. He has chosen Australia because it has a local manufacturing industry and because if "we can do Australia no one will ask if we can do big.”

Australia, though, is not so hard because it is six island markets linked by long routes, and providing enough battery change stations – Better Place infrastructure can automatically change battery stations in the less than one minute – along a 1,400km arterial route would cost just $40 million.

Better Place has teamed up with AGL to provide renewable energy and Macquarie to help with finance. The firm is currently seeking around $30 million in a "seed round” from private investors, but will eventually seek around $1 billion before the network is rolled out in 2012.

Denmark (for environmental reasons) and Israel (for political reasons) are supporting the introduction of electric vehicles with tariffs on gasoline, and the likes of the US, China and Europe are supporting electric vehicles with direct subsidies.

Agassi says the Australian operation is not dependent on such support, but he says the country had to choose between having its own electric car industry, or simply exporting raw materials such as lithium and phosphate and importing kilometres in the form the electric vehicles.

And he is dismissive of the move to hybrid vehicles, comparing them to the fax machine, and notes that Holden's first hybrid vehicle will roll out a year or two after Better Place's first electric vehicles hit Australian roads in 2012. "Would you sell a fax to a kid that has been using email?”

Better Place has released research that suggests nearly 40 per cent of car buyers in Australia are already interested in electric vehicles, and 45 per cent said they would not consider a petrol-only vehicle as their next car purchase.

It also released a study by the University of California that predicts two thirds of light vehicle sales by 2030 will be electric vehicles, and the total cost of ownership would be $US0.10c to $US0.13c a mile lower than gasoline cars.

Agassi, who reportedly sold his software business to SAP and was second-in-charge of the software giant, says he came to this business model after being challenged at the World Environment Forum in 2005 on how he could "make the world a better place”.

He decided it was not through software – although a critical part of Better Place IP is the software that manages the recharging infrastructure.

"I sold a company 10 years, ago, and I still haven't spent that money. I don't have a yacht or a private jet, or anything like that. When I look at the opportunity we have in front of us, I see the greatest opportunity in history, and it comes to us because we have no choice.

"We have catastrophic climate failure, an oil problem, a jobs problem, an economy that is failing, a car industry in destruction.

"I can give you a list of all these things happening at same time. If you try and save one of them, it won't matter, because you will destroy the other ones. If you just try and subsidise oil, you will kill the planet, if you create more jobs in the car industry, you will kill the economy.

"You've got to look at it at a complete perspective and when you look at it all together it is the greatest opportunity in history to make something that is of value to humanity, value to investor, and value to yourself. I'm lucky, I fell on to the right question there.”