The Future of Energy – Part II

Switched-On Highways

NEWSWEEK 

With oil under $50 a barrel, does your business plan still make sense?
The cost of the battery [averaged out over its lifetime] roughly translates to about four to six cents per mile. The cost of clean electricity translates to about one to two cents per mile. So [our costs are] somewhere between six and eight cents per mile. If you look at the average miles per gallon a car gets in the U.S., [those costs are in line with oil at] $25 a barrel.

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Denmark and Israel are small, densely populated countries. How do you make this work in the sprawling American Midwest?

If you look at the North American continent, you actually have about 50 urban centers, which are, on the East Coast, so dense that at least half of them overlap another center. If you look at California, the California area is actually covered with four of these dense circles. Imagine a hundred-mile circle around San Francisco, and another hundred-mile circle around Sacramento, and again the same thing in Los Angeles and San Diego. In between those you have three freeways connecting [northern and southern California]. On these freeways, if you put switch stations at a distance of about 30 miles from one another, you would have full coverage across the entire state, which is effectively the most prolific car state in the nation.
We still don't seem to be where we need to be in terms of battery technology. Is it improving?

The Moore's curve for batteries is about 8 percent to 10 percent improvement per year. Do we need to wait for the best battery? We didn't wait for the best chip technology to start the PC revolution, and we didn't wait for the best communications chip to start the cell-phone revolution.

But you're saying the car is viable with current batteries? Many have said that they're too expensive or too heavy right now.

We have a battery in the car today that weighs 550 pounds and takes you 155 miles without air conditioning. It gives you a car that weighs less than any hybrid in the market today, costs less than any hybrid today, and actually drives faster than any hybrid today. What we were missing was a business model. Once we put in place the infrastructure and the business model, batteries beat fuel on efficiency, affordability and convenience. Nobody will send you a Chevron truck to fill your car at night, every night. I can fill your car at night, every night.
We don't produce batteries in the United States. With your plan, instead of sending money to OPEC, aren't we just sending it to battery-producing countries?

[That statement] is painfully right. The U.S. is in a very, very dire situation vis-à-vis battery manufacturing. The government should come up and say, "We're building a battery reserve, much like the national oil reserve, and to build that battery reserve we're willing to take the risk of a loan guarantee to manufacturers."

So in this you do see a role for government?
This doesn't happen without government. This is Silicon Valley meets Michigan meets Washington, D.C.