GM's Bob Lutz Pokes Holes in Better Place Model


General Motor’s vice chairman Bob Lutz is an outspoken guy — he’s not afraid of voicing is opinion on issues like how he doesn’t agree with the carbon theory of climate change (fun). Lutz also isn’t shy at offering his opinion on electric vehicle companies, specifically Shai Agassi’s startup Better Place — he told the Toronto Star’s Tyler Hamilton that he doesn’t like the Better Place model for a variety of reasons.

Lutz says GM’s batteries are purpose-built for the vehicle (not standardized), and he can’t wait for Agassi to standardize batteries. He also says he’s worried about the risks of Better Places’ networks and says “Frankly, we’d have to be very much assured that all of these connections, the disconnect, the reconnect, and everything, that it all works well without any risk or without any danger.” In addition Lutz says he doesn’t see how the math of Better Place’s business model would work. OK, that last one we can understand, but read the quote Hamilton got in all its glory:

I’m also somewhat troubled by the situation where a company becomes the equivalent of a cellular provider, and here is Mr. Agassi, who buys the electricity in bulk and resells it to you at a tremendous profit in the form of charged batteries. And he would have to charge a lot, because when you start thinking about the upfront investment in a dense network of charging stations all over the country . . . I don’t see how the business equation could possibly work. Unless he resells it to you at a tremendous mark-up. Which wouldn’t be profiteering.



Exactly, and if you are getting advice about the best way to go forward into an electric car world – Lutz is the worst place to get it.

Agassi is motivated by something much bigger than the small imagination of Lutz.


Analysts at Deutsch bank would beg to differ with Mr (C)Lutz. It is easy to make off the cuff critical statements, but if you look at what they are based on there has been no analysis done by Lutz. The business plan put forward by better place involves a number of facets including smoothing out electricity supplies to renewable energy providers, sale of vehicles (through long term leasing contracts) , sale of electricity through contracts and leasing costs of the batteries – all wrapped up in an easy monthly payment for the consumer. The information and report is available to anyone that really wanted to look, but I guess it is easier to make ill informed off the cuff remarks.


I sort of agree with Lutz here. PBP doesn’t make much sense economically. And if PBP charges a markup for charging, wouldn’t consumers get their own 3rd party chargers (for home use) to duck the charges? People will be people.

On the other hand, the GM Volt may end up being a flawed strategy. The serial hybrid strategy may require too much of the batteries in terms of power compared with a parallel hybrid design. Time will tell.

Comments are closed.