Better Place Exec: Beware the Lure of Electric Car Early Adopters


Don’t let the enthusiasm of the early adopters fool you: Electric vehicles have a long way to go before taking hold in the mainstream. That was a warning issued yesterday by Jason Wolf, VP of Business Development for electric vehicle infrastructure startup Better Place.

Speaking on a panel about vehicle-to-grid technology hosted by Agrion in Palo Alto, Calif., Wolf said, “Early adopters love where we are right now,” but the temptation to give too much heed to that vocal, supportive and influential — but small — sliver of the pie represents “the biggest problem for this industry right now.” If a large commercial player caters to what those influencers want, Wolf predicted, that company “will fail” to reach many mass market consumers. While sophisticated, complex systems for managing battery charging, for example, might appeal to early adopters, they could be overly intimidating for a more mainstream car buyer.

Part of the balancing act for automakers trying to help grow the still-nascent plug-in vehicle market is determining “how big a battery consumers will pay for,” explained researcher Brett Williams from the University of California, Berkeley’s Transportation Sustainability Research Center, following Wednesday’s panel. “Beyond $30,000, you lose a lot of buyers,” he explained. The early adopter niche might be more willing to pay a higher premium for a plug-in car.

The battery represents the most expensive part of electric vehicles, and smaller battery pack with fewer lithium-ion cells can bring the sticker price down, but mean a sacrifice in terms of electric range. Referring to General Motors’ upcoming Chevy Volt, an extended range electric vehicle with a small gas engine that will kick in when the battery’s depleted, and which is expected to cost about $40,000, Williams asked, “Is even the Volt battery too big for most consumers?” And “at what point is the battery too small?”

Wolf drew a distinction between early adopters — the 1-3 percent of consumers “that care about kilowatt-hours” (how much energy is used or stored in the battery) and the larger consumer market, where people “just want to buy mileage” at a lower cost.

AC Propulsion CEO Tom Gage argued that electric vehicles will see only single-digit penetration rates for some time to come — making up about 8 percent of the total fleet in 20 years. “The rise of hybrids is instructive,” Gage said. A decade after the Prius launched in the U.S., hybrids hold less than 3 percent the national light vehicle market. “There is not going to be an overnight change.”

General Motors, for one, anticipates a transition period — from early adopters in carefully selected markets to more widespread appeal — of at least two years. Britta Gross, who heads up the global energy systems and infrastructure commercialization efforts of the automaker, has told us that for an electric car, the “chances of success are much greater in markets with broad influence,” that extends “beyond just their geography.” That means targeting population centers and big media markets, she said. As Alan White, a VP at charge point developer Coulomb Technologies put it on Wednesday’s panel, “It’s a geographic smile of locations where automakers are marketing these cars,” in the states: along the West Coast, down into the Southwest, and over to the Northeast.

But maybe EVs don’t need to climb the same slope that hybrids have over the last decade. “When we’re looking at adoption curves, we can be mistaken by incremental adoption vs. disruptive adoption,” said Wolf. Better Place’s idea for disrupting the market involves selling “a cheaper mile,” through subscription plans that cover the cost of batteries over the life of the car. “The Prius is still more expensive,” compared to conventional vehicles, he said. “That’s not the case with electricity.”

As “>Marc Gunther has explained, Better Place’s scheme in theory could bring the cost of driving a mile in an electric car to about 10 cents, compared to 12-14 cents per mile for gas powered cars, if fuel costs about three bucks a gallon at the pump. Hybrid models like the Prius and Honda Insight can save car buyers money in the long term. But it can take years to recoup the cost premium on hybrids over comparable conventional models based on savings from better fuel efficiency. How long it takes depends on the price of gas and the number of miles driven each year, among other factors.

As Williams commented yesterday, however, a “typical consumer doesn’t know how much they spent on their last fill-up, let alone last month.” They’ll more likely compare their electricity bills (before and after bringing an electric vehicle into the mix), he said, than per-mile driving costs.



It’s way too soon to start declaring winners and losers among the flavors of EV propulsion (BEV/PHEV/EREV)- especially since most of the public has never seen any of them in the flesh. The only relevant question is whether or not there’s enough of a market for a given vehicle to make a business out of it.

That said, there are some mistaken assumptions represented here- the main one being that economics are the only factor (or even the primary one) among consumers. Early adopters can be written off (to the detriment of any company that does it), but even among the “masses”, vehicles are an emotional purchase as much as an intellectual one. Some of that is cause-related, some performance, brand or aesthetic-oriented, but it exists in most purchases to some degree. No one can argue that buying a Yukon is the most economical way to own a truck, and it’s not exactly the early adopter market stepping up for them.

We can’t ignore the cost issues, and we’re pushing to improve them in various ways, including new purchase/lease models. But it’s only one of a portfolio of issues, and won’t be the one that will make or break these programs.

Carlo Ombello

I believe we tend to overthink the issues BEVs will be facing over this decade. We’re not talking about a new technology slowly making its way into an established market. EVs are going to be as disruptive to the car industry as the mobile phones and the internet to communication. There’s a lot of research being pursued everywhere to increase their range. Once we get a decent 200-300 miles range (sooner than we think!) there will be little doubt left about them. The looming oil crunch (forget peak oil, it’s just about not enough supply to ever growing post-recession demand) will pave a rather easy way for EVs in the market. They will eat in their share as the iPhone has done with smartphones.

I am sure that by 2020 the World is going to look a lot different. In better.

My ideas on the matter in this article:


Interesting comparison to the iphone, and frankly a perfect example of why PBP won’t work. As successful as the iphone has been it would have sold far more if it were not network specific, and there have been many complaints of the limitations of the ATT service. The same way Windows has a much larger footprint than Apple. Open architecture and lower prices will drive EV acceptance, not proprietary charging services.


Actually there are a number of other solutions for occasional long trips for many of us. Most families have more than one vehicle, no reason one of them can’t be a full BEV. Renting an ICE vehicle once in a while is also a possibility. I agree that for many people who think they “need” 200 mile or more of range than hybrids make sense. However there are millions of us right now who can make good use of pure BEV’s in the 100 mile range. Nissan is addressing those potential customers with their Leaf, which does not subscribe to the PBP model.


Certainly improved public transportation has it’s place, but that takes investment in infrastructure and time to implement. It will also do nothing for the millions who don’t live in a large city. BEV as a second car or ICE rentals for longer trips are available now. Another concept is rentable generator trailers for your EV to turn it into a series hybrid when needed. There are a number of different ways that BEV’s can work right now for many people.



You asked: “Do you think BEVs should be dropped altogether in favor of PHEVs?”

Short answer: Yes.

The economics of BEVs don’t make sense given that people want vehicles that can (occasionally, at least) make long trips. If every two weeks you need to drive 200 miles in one day, is it better to add $2000 for a small internal combustion engine or $20,000 for a larger battery pack?

There are a LOT of people that seem to favor BEVs because they are a more elegant solution, but the economics are not favorable to accomplish this. In some ways, PBP is trying to get around this by adding a huge (and inherently socialized) infrastructure, but that fix is much worse than the problem it’s trying to solve.

PHEVs can make use of the infrastructure already in place (gas stations) until and if batteries get good enough and cheap enough to build BEVs.

Josie Garthwaite

Thanks for explaining beyond the short answer. :)

True, most if not all of the BEVs coming out in the next few years will be priced out of reach for most car buyers. And I think a lot of work remains to be done to make them practical for a large portion of the market (e.g. urban apartment dwellers like myself — see my post on 10 Signs Your Next Car Won’t Be Electric: But that, to me, doesn’t mean the tech should be dropped altogether in favor of PHEVs. Battery costs will most likely come down — it’s a question of how much and how soon.


PBP is a terrible business model that is probably destined to fail. Most people will charge cheaply at home overnight most of the time and will rarely ever need the “services” that PBP offers, at a premium. Expensive battery swap stations and an inventory of extra batteries available for them will increase the overall cost of EV’s, not decrease it. Batteries are getting better and cheaper all the time, and having PBP as a middle man between my batteries and the power companies does not help make my EV cheaper. Worth noting that Nissan decided to remove themselves from the PBP system.

Josie Garthwaite

Interesting ideas, Jim and Roland. Keep ’em coming. I’m curious, Jim — do you think BEVs should be dropped altogether in favor of PHEVs?


Why not sell these cars with one small battery pack but provide space for (say) 3 more? The owner could buy/charge/install/remove to meet his changing needs. This also minimizes weight which would improve range. The install would need to be a slide-in/slide-out arrangement but any competent MechEngr. could figure out such an arrangement. Also, sell/rent a small trailer with batts and/or diesel gen. for those longer trips. Design for flexibility.


I’d weigh this guy’s comments with a block of salt. This is a company that thinks the consumer should pay a monthly fee for their EV in support of an infrastructure of battery swap stations, vs. simply buying a PHEV which would need a smaller battery, and need no such infrastructure (not even charging stations).

The PBP business model is in NO ONE’S long-term best interest except for PBP.

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