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Better Place CEO Shai Agassi: With 1 billion cars by 2015, electric car has built-in audience

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If they're not affordable, Agassi says, few people will buy them.

Three years ago, when he was still in his 30s, Shai Agassi was in line to become the CEO of SAP, one of the biggest software companies in the world.

But in March of 2007, he left.

He'd been thinking about how to get the world off oil, he told a packed meeting of the Churchill Club in Silicon Valley Thursday night, but he found the idea so daunting that he started thinking instead about what it was that motivated ordinary people to buy cars.

Cheapness and convenience, he decided. So he started a company, Better Place, which has raised $550 million in venture capital and other private funding and is a little more than halfway through a four-year plan to build and test what Agassi hopes will be a worldwide network for charging electric cars.

So far, there's a charging network in Copenhagen; a partnership with Renault-Nissan; a demonstration center and several deals to electrify fleets of corporate cars in Israel, where Agassi lives; a memorandum of understanding with Chery, a car company in China; and an electric taxi project in Tokyo, where taxi drivers can get their batteries changed in under a minute. (See the video below)

Electric cars need to be able to make three trips on a single charge, Agassi said -- that way the driver has the flexibility to decide whether to plug in at home or at work.

He gets a little nervous when he thinks about Better Place's future, though. The company's plan calls for a 10X growth in electric car infrastructure every year, which Agassi figures will be needed to keep up with demand as the world turns away from oil -- but no company has ever grown that fast.

He got another challenge from former President Bill Clinton, who told him that electric cars have to be as cheap as the car the average American buys now -- an eight-year-old Ford or GM that's almost dead when it's driven off the lot.

Agassi is counting on help from China, which he believes is trying to kill the U.S. car industry. When China sets a standard for electric cars, which he expects will happen in 12 to 18 months, the U.S. will suddenly realize what a mistake it's been to allow Americans to buy such low-priced gasoline and will beat China's standard, he believes, because the U.S. is better than China at innovating. Agassi's also betting that battery technology will continue to improve by 8 percent each year.

As for GE's new WattStation -- the lollipop-like electric car charger that SmartPlanet's Andrew Nusca wrote about this week -- Agassi says car chargers are going to be a huge business.

He predicts that electric car has a built-in consumer base with 1 billion vehicles on the road by 2015.

[video=445239]

Here are some other numbers from Agassi:

- 1 Better Place battery swapping station in 2009, growing to 10 in 2010, 100 in 2011, 1,000 in 2012, and, assuming China and/or the U.S. push electric car standards, 100,000 battery swapping stations in 2013

- 500 million car charging stations in the U.S. by 2015 -- drivers will need one at work and one at home

- At $1,000 per station, car charging is a $500 billion industry

Here's the basis for Better Place's electric taxi experiment in Tokyo:

Photos: Better Place/Flickr

Editor's note: This article originally quoted Agassi as predicting 1 billion affordable electric cars by 2015. That statement is incorrect. He actually said that 1 billion cars would be on the road by 2015, and that the "beauty of this industry is that we're starting where the consumer has already bought in." The quote and the headline have been amended, and we've added our own video of Agassi's presentation. We regret the error.

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Deborah Gage

Contributing Editor

Contributing Editor Deborah Gage has written for the San Francisco Chronicle, Minnesota Public Radio, Baseline and various magazines and newspapers. She is based in San Francisco. Follow her on Twitter. Disclosure