Better Place Updates Israeli Pricing Plans To Allay Consumer Resistance

On Sunday Better Place announced it would lower the barrier to entry for customers in Israel wishing to sign on to its service involving use of the specially designed Renault Fluence Z.E., charging it and swapping batteries as needed.

The company opened its first several battery swapping stations in May, has already installed 1,500 charging points and intends to have opened 38 battery switching stations by September, but has softened the deal in light of customer objections to the new – and still experimental – business model.

Two new simplified price plans will be offered, according to Haaretz online.

The first plan is for 55 agorot (13.81 U.S. cents) per km and allows customers to purchase between 40,000-80,000 km over a three year period and contingent upon making an advance commitment.

(Note, an “agorot” is as to the New Israeli Shekel (NIS) as the U.S. penny is to one U.S. dollar. It is 1/100 of one NIS).

Previously the barrier to entry was a minimum four-year commitment for 80,000 km which dissuaded customers from signing up for what was seen as an excessive obligation.

The company reportedly expects Israeli drivers to travel on par with an existing average of 20,600 km per year for new cars. On average Israelis travel 17,500 km per year in older cars.

A second “Pay As You Go” package prices the electricity to be not much less than the already bloated price of gasoline in Israel – the estimated cost per km of driving on gas is 69.8 agorot (17.52 U.S. cents) per km based on on the current gasoline market price.

For the opportunity to enjoy lower maintenance, and a four-year service contract and no-cost road service included in the Fluence Z.E. battery lease package through Better Place, customers can pay between 64 agorot (16 U.S. cents) and 68 agorot (17 U.S. cents) per km.

The minimum purchase commitment is 1,000 km per month and this deal replaces a previous package which mandated 20,000-30,000 km per year at a fixed rate of between NIS 1,090 ($274) to NIS 1,600 ($402) a month.

It is estimated this latter plan will net a fuel cost savings of NIS 2,600 ($653) over an average family sedan over a three year period.

The standard Better Place-compatible Fluence is priced at NIS 121,200 ($30,423) after a green car tax break, or NIS 128,100 ($32,155) for a premium example with more accessories.

Better Place has promised also not to increase contract prices during the term to those who have signed up, and it has waived a previous requirement for three-month’s notice of cancellation. Customers may therefore quit the deal and sell the car at any time without penalty, but the battery remaining property of Better Place.

Better Place’s Shai Agassi has spent five years working on realizing his vision for a better way to do electric vehicles given existing constraints on batteries.

The company’s last minute yielding to a resistant market was seen as a chastening by Israeli media much closer to the day to day situation in Better Place’s home market. Haaretz spoke to industry insiders for this story, and undoubtedly now Better Place hopes its compromises have sufficiently sweetened the perceived value proposition into a better deal.

Better Place also has high aspirations to take its model globally, and Israel is seen as an initial test bed as the narrow, relatively small country is an ideal place for it to work if it will prove viable at all.

If things go as planned, on the agenda is also Australia, China, Denmark, Japan, North America and the European Union.

Haaretz


  • Nermash

    30K for a small French car is insane. Who are these people trying to rip off. I could by a Ford Explorer/Dodge Charger muscle car in the States and spend less on gas what these idiots are charging. Somebody is bleeping somebody. I don’t care how they sugar coat this to the Israeli public, somebody is going to get screwed and it won’t be “The better Place”.

  • Marc

    $30K is cheap for an Israeli car. They are taxed at about 100% which means that the cost of any new car is roughly twice that of an American car. The government needs to lower taxes on electric cars to make them more attractive.

  • MrEnergyCzar

    Buy a Volt and avoid this battery swap hassle…

    MrEnergyCzar

  • smiles

    Tax on regular car is 70 percent in Israel. on electric car is 8 percent or so. 30 k is normal price for a new car in Israel. So Israel is only place in the world that electric car costs same as gas car. And hybrid prius cost even more. Cost is the same.
    i bought the electic car fluence ez and have driven 4000 km. it drives much more fun than any gas car i can afford…. i have been from one end of the country sederot to the another end – teveria. ( Tibirius ) …
    the only question is the car is new so people are a little hesitant to invest money in something that is new. but if you think different , then this car is a gas !!

  • Ariel

    In Israel car are taxes @ 100% so a Ford Explorer that costs 30K$ in the US costs approx. 56K$ to 60k$ in Israel.
    The gas price in Israel is also 50% more expansive than in the US.

    Concerning the “small French car” it is not a small Nissan Versa (Nissan version of the Renault Clio – Nissan being controlled by Renault-) and it is made in South Korea by Samsung Motors a place & company known for the quality of their products.

    Finally, the Better Place deal includes all the services package, so at the end, yes, they save money + they pollute less.

    not adding that its reduce the dependance to the oil that comes, for most of the time, from states that are certainly unfriendly to Israel, so it is an economic, environment and political choice.

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