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A $9,999 Electric Vehicle to Upset the Automobile Market, Says Shai Agassi

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Shai Agassi Thinks Electric Vehicles Can be Sold Better
Shai Agassi Thinks Electric Vehicles Can be Sold Better

Electric vehicles are not like conventional or even hybrid electric vehicles, and hard lessons have been learned by startup and established automakers alike. Don’t forget the lessons that drivers need to learn, as well!

Shai Agassi, founder of now-bankrupt electric vehicle startup Better Place, still thinks the best way to produce a market-upsetting electric vehicle is to separate the cost of the vehicle and the battery. Conventional vehicles are priced the same way. Ask people for one thing that makes electric vehicles difficult to adopt, and cost is certain to be high on the list, due, in large part, to the expensive battery pack. The problem, Agassi asserts, is that the cost of the fuel, or the battery, in the case of an electric vehicle, shouldn’t be part of the cost of the vehicle, just as it isn’t part of the cost of buying a conventional vehicle.

After all, you don’t buy five years of fuel with a five-year financing deal, do you? Imagine if you had to finance your new Toyota Prius c and the gasoline over a five-year financing deal? Now, instead of paying $25,430 for the car with most of the options ticked, you’re telling me it’s going to cost an additional $5,250? Even with a decent APR, that’s nearly $100 difference in payments.

While the Tesla Motors sales model is working well and looking to sell better than 20,000 vehicles this year, it will decidedly remain a niche vehicle. Even though it isn’t technically a luxury vehicle, it is replacing luxury vehicles faster than luxury vehicles. Starting at better than $60K, the Tesla Model S certainly doesn’t fall into Everyman’s garage. Agassi suggests that if an electric vehicle could be sold for something like $9,999 and add a battery package to the deal, say $300/mo, battery and electricity included, it could revolutionize the way electric vehicles are viewed and sold.

It kind of makes sense, since battery technology is advancing more rapidly than the internal combustion engine has in the last twenty years. Why would you want to buy an electric vehicle with a battery that is sure to be obsolete in the next year? Just for a quick comparison, a base Tesla Model S might go for $1,091/mo [not including electricity], compared to $475/mo for Agassi’s economy electric vehicle. Interestingly, the Toyota Prius c [fuel included] would be more expensive at $536/mo.

The question is, “How many people can wrap their head around the idea and separate the battery from the electric vehicle, just as they separate the gasoline from the conventional vehicle?”

Image © Wikimedia

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8 COMMENTS

  1. LoneWolffe patrick0101 The reality of such batteries is that they can be “re-purposed” as either grid or non-grid storage capacities, once they are standardized. Imagine that the battery sizes for EVs has been standardized. Once that happens, you can then take any number of them (once tested) and put them together in a container to create a new purpose for these batteries. As opposed to automotive use, where once down below 80% they should be replaced, uses like off-grid storage in remote areas don’t require that level of performance. Since the cost of the battery will have been mostly paid already by the lease, this provides a very affordable means of power/energy to people who cannot get access to stable and economical grid power. You can literally power villages at the top of mountains now and make them totally energy independent with a solar system and storage facility. The future of energy is really dependant on the standards which distributed power players are willing to create together. Unfortunately the automotive industry is all about itself and collaboration is rare. Usually its up to governments to impose such standards and that may happen when the density of such batteries has reached a level where “range anxiety” is no longer a barrier. It is said that GM is working on a battery with triple the range and density of current chemistries. That will be a game changer.

  2. patrick0101 as long as it’s a buy and not a lease, i think you could come out ahead. lease never benefits the owner anyway. on the other hand, if you bought battery “A” and a few years down the road, you could sell or trade battery “A” for battery “B” with more range or power or whatever.

  3. If owning the battery is such a bad deal, then who would own it once it is “separated”? Who ever owns it would want a payment that covers their costs and gives them a profit or they will would not be in business very long. So why wouldn’t I, as an EV owner, just buy the battery myself and avoid paying a middleman a profit?

  4. Welcome to “Virgin Mobile” of energy. And you guys are wondering why Richard Branson wants to get involved in clean power?

  5. @sculptor well, i suppose that there ought to be different battery plans, depending on how much you drive. for commuters, who should know full well how much they drive every day to work, they could get a plan that covers that plus a little bit more, saving a lot of money over a generalized plan.

  6. Sass Peress i’m sure it was the same in the beginning with other battery-operated stuff, like radios and clocks. before standards like AAA, AA, C, D, etc. it is still fairly ridiculous when you have to shop for a battery for a watch made by a company that no longer exists. if it wasn’t for the standards, you’d be out of luck.
    i think that, until electric vehicles get some standards in battery and charger technology, it’ll remain difficult for people to adopt the new technology.

  7. The challenge remains standards. When batteries can be swapped out with a standard just like was created for gas caps and tanks, then Shai’s idea works. people are lazy and they want it easy. If batteries were standard people could buy a $10k car and then shop utilities for the best electricity and charger and battery deals.

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