from the February 2008 issue

Electric Car Launched!

At the end of January, the Israeli government announced its support of an ambitious plan, to install the world's first electric car network in Israel by 2011. The initiative is aimed at addressing global dependence on foreign oil from undemocratic regimes, and mitigating the health and environmental damages caused by emissions from gas-burning vehicles.

Daniel Morgenstern

An electric car automobile won't solve all the world's problems, but it can help reduce CO2 emissions and dependence on fossil fuels, including foreign oil sources. Electric cars have a number of advantages, that you should consider, if you are debating between a regular automobile and an electric car. The obvious first advantage is that electric cars are better for the environment than gas fueled cars. You will be releasing few emissions into the air.

Electric cars are very efficient. Unlike regular fuel powered cars that need extra power to run at slower speeds, or to take off from a dead stop, electric cars are at full-rated power, regardless of the speed that you are going. The cars generally do not need transmissions and even if they do have one, it operates very efficiently. "Today is a new age with new dangers and the greatest is that of oil. It is the major polluter of our age, and oil is the greatest financier of terror," said Israeli President Shimon Peres.

The venture, Project Better Place, owned by Israeli-American entrepreneur Shai Agassi, will provide lithium-ion batteries and the infrastructure to refresh or replace them. Renault and Nissan will build the cars, with the goal of making Israel a laboratory test for a new model of environmentally efficient transportation. Israel will offer tax incentives to purchasers.

The innovative concept, developed by Agassi, would provide consumers with inexpensive cars, and they would pay a monthly fee for expected mileage, like minutes on a cell phone plan. Project Better Place will provide infrastructure, including parking meter-like plugs on city streets or service stations along highways, at which batteries can be replaced.

Renault Nisan, a partner to the project, will offer a small number of electric models of existing vehicles, like the Megane sedan, at prices roughly comparable to gasoline models. The batteries will come from Mr. Agassi. The tax breaks for "clean" electric vehicles, which Israel promises to keep until at least 2015, will make the cars cheaper to consumers than gasoline-engine cars. "You'll be able to get a nice, high-end car, at a price roughly half that of the gasoline model today," Mr. Agassi said.

Idan Ofer, chairman of Tel Aviv-based industrials conglomerate Israel Corp., provided the initiative and half of its $200 million funding. Building on the idea of Israel, as an experimental laboratory for environmental technology, Ofer has begun targeting China and India, the two countries with burgeoning oil consumption and attendant environmental hazards.

Ofer said that if Agassi's plan works in Israel, "it will work even better in China. Their pollution is killing them and the rest of us, too." And in Mumbai, he said, "you can't even see the sky."

Israel has been on the forefront of developing alternative energy technology, and is a significant center for its energy research and development. More than 200 Israeli firms have so far developed environmental or energy-related technology.

Israeli companies have been working to provide alternative energy in the United States for decades. From 1984 to 1991, Israeli technology, built nine solar plants in southern California. The plants are still operational today, eliminating the need for nearly 2 million barrels of oil each year, and providing electricity to millions of Americans. Today, an American and Israeli company, are working together in Nevada to build the largest solar power plant since 1992.

Europe has already begun working with Israel on alternative energy research. In June 9, 2007, German Environment Minister Sigmar Gabriel, pledged nearly $2.2 million from his ministry, to four separate German-Israeli alternative energy projects.

James D. Wolfensohn, the former World Bank president, is a modest investor in the project and said that: "Israel is a perfect test tube" for the electric car, Wolfensohn said. "The beauty of this is, that you have a real place where you can get real human reactions,. In Israel they can control the externalities and give it a chance to flourish or fail. It needs to be tested, and Agassi is to be commended for testing it and the Israeli government for trying it out."

Reprinted from the Israel High-Tech & Investment Report February 2008

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