By on December 2, 2009

Along with Israel, Denmark is one of the first countries to sign on to Project Better Place’s attempt to establish a viable electric car infrastructure. And as with all early adopters, Denmark is paying a pretty price for the experiment. The country is spending $100m on infrastructure, including charging points and battery-swap stations. Moreover, Better Place’s partner, public utility Dong Energy, is trying to run the new EV infrastructure entirely on wind power, which is already the source of 20 percent of Denmark’s energy. “We’re the perfect match for a windmill-based utility,” Better Place founder and CEO Shai Agassi tells the NY Times. “If you have a bunch of batteries waiting to be charged, it’s like having a lot of buckets waiting for rain.” Despite the close government involvement in the project, Danes are still wary of making a wholesale switch to EVs, prompting the government to offer $40,000 in consumer incentives for electric vehicles, as well as free parking in downtown Copenhagen. Though there’s plenty of skepticism in Denmark about the plan, that incentive is expected to make a huge difference.

After all, buying a car in Denmark isn’t the same as buying a car in the US. The NYT explains:

The country imposes a punitive tax of about 200 percent on new cars, so a vehicle that would cost $20,000 in the United States costs $60,000 here. For a quarter-century, electric cars have been exempt from that tax. But the models on the market were so limited in their capabilities that only 497 of them are registered in the entire country.

And though the incentive combined with Better Place’s Renault/Nissan EVs might make a difference, Danes are still worried about betting the farm on a single vehicle supplier. With millions set to be spent on Better Place’s battery swap stations (under BP’s scheme, you buy a car but lease a battery, a system based on the cell phone contract model), many worry that the stations won’t be able to supply batteries to competitor EVs. “I’m skeptical about the infrastructure,” says Klaus Bondam, Copenhagen’s mayor for technical and environmental administration. “It won’t work unless it’s standard on every electric vehicle produced.”

The questions point to an underlying problem with Better Place’s strategy. Though battery leasing and swap stations theoretically eliminate range anxiety (since batteries could be swapped in less time than it takes to fill a tank with gas), the BP-specific infrastructure forces competitors wanting access to the Israeli and Danish EV markets to standardize to BP’s specifications. Though standardization of a plug-in infrastructure is clearly a major goal for all EV supporters, the terms of that standardization should not be set by a for-profit, public-private enterprise. The Society for Automotive Engineers or some other cross-industry organization should take the lead in establishing international EV standards, and should do so in such a way that doesn’t favor any one manufacturer. Otherwise, Better Place’s attempt to leap ahead in establishing its own infrastructure will end up dictating the terms of engagement for everyone else. Especially when it has such generous governmental support.

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11 Comments on “Denmark EV Incentive: $40k and a Parking Spot...”

  • avatar

    As long as the specs for the battery packs are publicly available and not covered by patents that make it impossible for other companies to produce compatible models, I don’t see a big problem with this. If the govt builds the battery swap stations they should have influence over what battery packs are supported there, and a reasonable number of models can be supported. This will help keep auto companies from making incompatible battery packs in an effort to lock in customers. And if we have to wait for the market to deliver alternatives to gasoline and ICE without govt involvement we won’t see any alternative until an actual crisis develops, by which time it may be too late.

  • avatar

    Denmark’s a small company, so I wonder if it would be just cheap to string electric lines across its main roads  to charge and all the electric cars would just need one really long aerial  (like trams) and 100 miles of reserve battery charge.
    You’d only use your battery when your off the main lines.  That’s what I’d explore if I was dictator of my own caribbean island.

  • avatar

    I don’t think Better Place has a good enough idea to base a company on. Ok, so you use the cell phone model. If someone buys a long enough “service plan,” you give them the car for free.

    Will enough people sign up to such a shift in pricing to let you make the upfront investment in infrastructure? I don’t think so.

    But maybe. Shai Agassi is a smart guy, and unlike T. Boone Pickens and others of his ilk, seems genuine. Great, at least, to see him try.

    Just don’t make me pay for it. Personally, I’ll stick to owning my own cars.

  • avatar

    Otherwise, Better Place’s attempt to leap ahead in establishing its own infrastructure will end up dictating the terms of engagement for everyone else. Especially when it has such generous governmental support.

    And therin, lies the rub. The last thing the world needs is this hustler establishing a de facto standard on the ground. With taxpayer money. And then having it all unravel and put the idea/industry even farther behind.
    If you want a revelatory experience, just listen to a couple of interviews. He’s as transparently criminal as Enron, Bernie Madoff, or Malcolm Bricklin.

  • avatar

    The Danes are skeptical because their government’s feelgood foray into wind power has been an expensive fiasco.

    The Danes are learning the hard way what a greenscam looks like from the inside.

  • avatar

    Dong Energy = little blue pill.

  • avatar
    Martin Schwoerer

    The Danes are skeptical? No they’re not. Wikipedia says “some 86% of Danes supporting wind energy when compared with existing fuel sources”.

    Wind power and EVs are a marriage made in heaven. Cars are parked around 96% of the time. If an electric car is connected to the grid while parked, then its batteries can effectively increase the base load provided by wind power. When winds are high, you charge the batteries; when winds are low, you deplete them somewhat to provide electricity to the grid. This has the potential to be a great system; this is the future, my friends.

    • 0 avatar

      What if you want to drive the car?

      Using the batteries in electric cars as backup for the power grid makes sense in theory. You are right about the potential. In practice, though, it’s probably not going to work. Electricity supply needs to be reliable. The so-called “V2G” system (vehicle to grid) seems inherently unreliable.

  • avatar

    I think Israel would have an easier time supporting electric cars. There is a correlation between the price of oil and the number of suicide bombers they get, so it’s a national defense issue for them.

  • avatar

    Not unknown for one company to make a product that everybody had to follow to gain markets. IBM pc’s and Microsoft spring to mind. One company making a specific type of product, be first in the market place and saturate, so that every other competitor/pruducer  had to emulate, licence or plain copy to remain in the market, or, go down a different path and be forever stuck with a small slice or at best a niche following. 

  • avatar
    Greg Locock

    “Though standardization of a plug-in infrastructure is clearly a major goal for all EV supporters, the terms of that standardization should not be set by a for-profit, public-private enterprise.”

    I don’t see a problem there, so long as it is an open standard. While it would be nice to wait for a governement commitee to design an alternative, do you really think it’ll be a whole lot better?

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