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.