Topic: Shai Agassi

[piersdad]

Shai Aggasi
as given a video talk about the future of electric cars and the urgency the world has to do some thing about it now.
i was trying to do the same 35 years ago and so i have just spent 5 hours  typing out every thing he said in the video.

so here it is

so how would you run a whole country without oil
that’s the question that hit me
in the middle of a davos afternoon about 4 years ago
it never left my brain
And I started playing with it more like a puzzle
The original thought I had was ethanol
So I went out and researched ethanol
And found out you would need an amazon in your back yard in every country
And 6 months later I figured it must be hydrogen
Until some scientist told me the unfortunate truth
Which is, that you use more clean electrons than the ones you get inside a car, if you use hydrogen.
So that not going to be the  path to go
And then sort of process of wandering around, i got to the thought
That actually if you could convert an entire country to electric cars,
In a way that is convenient and affordable, you could get to a solution.
Now i started this from a point of view that it has to be something that scales en masse not how to build one car.
But how do you scale this so that it can become some thing that is used by 99 percent of the population.
The thought that came to mind is that it needs to be as good as any car that you would have today.
So one, it has to be more convenient than a car.
And two bit has to be more affordable than today's cars
Affordable is not a 40,000 dollar sedan.
Alright? That’s not some thing that we can finance or buy today.
But convenient is not some thing that you drive for an hour and charge for eight.
So we're are bound by the laws of physics and the laws of economics.
And so the thought i started with was how do you do this, still with in the boundary of the science we know today, no time for a science fair, no time for playing around with things or waiting for the magic battery to show up.
How do you do it with in the economics that we have today?
How do you do it from the   power of the consumer up?
And not from the power of an edict down.
On a random visit to tesla on some afternoon, i actually found out the answer comes from separating between the car ownership and the battery ownership in a sense if you want to think about it this is the classic "batteries not included".
Now if you separate between the two, you could answer the need for a convenient car by creating a network, by creating a network before the cars show up.
The network has two components in them.
First component is you charge the car whenever you stop--ends up that these strange beasts that drive for about two hours and park for about 22 hours.
If you drive a car in the morning and drive it back in the afternoon the ratio to drive to charge is about a minute for a minute.(hour)
And so the first thought that came to mind is, every where we park we have electric power.
Now it sounds crazy. But in some places around the world, like scandinavia, you already have that.(and switzerland)
if you park your car and didn't plug in the heater, when you come back to your car. It just does not work.
Now that last mile, last foot , in a sense, is the first foot in the infrastructure.
The second step in the infrastructure needs to take care of the range extension.
See we are bound by today’s technology on batteries, which is about 120 miles to stay within reasonable space and weight limitations.

120 miles is a good enough range for a lot of people.
But you never want to be stuck.
So what we want as a second element to our network is a battery swap system. You drive. You take you depleted battery out. A full battery comes on. And you drive on.
You don’t do it as a human being. You do it as a machine.
It looks like a car wash. you come into your car wash. And a plate comes up, holds your battery, takes it out, puts it back in.
Within two minutes you are back on the road. And you can go again.
If you had charge spots everywhere, and battery swap stations every where, how often would you do it? And it ends up that you'd do swapping less times than you stop at a gas station.
As mater of fact, we added to the contract. We said that if you swap your battery more than 50 time a year we start paying you money because its an inconvenience.
Then we looked at the question of affordability.
We looked at the question, what happens when the battery is disconnected from the car.
What is the cost of the battery?
Everybody tells us the batteries are so expensive.
What we found out, when you move from molecules to electrons, some thing interesting happens.
We can go back to the original economics of the car and look at it again.
The battery is not the gas tank, in a sense.
Remember in your car you have a gas tank.
You have the crude oil.
And you have the refining and delivery of that crude oil as what we call petrol or gasoline.
The battery in this sense, is the crude oil.
We have the battery bay. It costs the  same hundred dollars as the gas tank. Bu the crude oil is replaced with the battery.
Just that it does not burn. it consumes itself step after step after step.
It has 2,000 life cycles these days. And so it is a sort of mini well.
We were asked in the past when we brought an electric car to pay for the entire well, for the life of the car. Nobody wants to buy a mini well when you buy a car. In a sense what we’ve done is
we have created a new consumable.
You today , buy gasoline miles. And today we created electric miles.
And the price of electric miles ends up being a very interesting number.
Today 2010, in volume, when we come to the market it is eight cents a mile.  (eMile- the new commodity 2010- 8c/mile)
those who have a hard time calculating what that means in the average consumer environment we're in in the U.S. 20 mile per gallon that's a buck 50, a buck 60 a gallon.
That’s cheaper than today’s gasoline, even in th e U.S. In europe where taxes are in place, that's the equivalent to a minus 60 dollar a barrel.
But E-miles follow Moore's law.
(eMile- the new commodity  2010 - 8 c/mile)
they go from eight cents a mile in 2010, to 4 cents a mile in 2015,to 2 cents a mile in 2020.
Why? because batteries life cycle improve--a bit of improvement on energy density, which reduces the price. and these prices are actually with clean electrons.
we do not use any electrons that come from coal. So in a sense this is an absolute zero carbon, zero fossil fuel, electric mile, at two cents a mile by 2020.
Now even if we get 40 miles per gallon by 2020, which is our desire.
Imagine only 40 miles per gallon cars would be on the road. That is an 80 cent gallon.
An 80 cent a gallon means, if the entire pacific would convert to crude oil and we'd let any oil company bring it out and refine it.
They still can’t compete with the 2 cents per mile. That's a new economic factor, which is fascinating to most people.
Now this would have been a wonderful paper. That's how I solved it in my head. it was a white paper i handed out to governments.
And some governments told me it was fascinating that the younger generation actually things (thinks) about these things (laughter)

Until I got to the true young global leader, Shimon Peres, President of Israel.
And he ran a beautiful manipulation on me. First he let me go to the prime minister of the country. who told me, if you can find the money you need for this network, 200 million dollars, and you can find a car company
that will build the car in mass volume, in 2 million cars. That's what we needed in Israel.
I'll give you a country to invest the 200 million in to. Peres thought that it was a great idea.
So we went out , and we looked at all the car companies.
We sent letters to all the car companies.
Three of then never showed up. One of then asked us if we stayed with hybrids and they would give us a discount.
But one of them Carlos Ghosen, CEO of Renault and Nissen, when asked about hybrids said some thing very fascinating.
He said hybrids are like mermaids.
When you want a fish you get a woman and when you need a woman you get a fish. (laughter)

And Ghosn came up and said, "i have the car, Mr Peres, I will build you the cars."
And actually true to form, Renault has put a billion and a half dollars into building  nine different types of cars fit this kind of model that will come into the market in mass volume--mass volume being the first year, 100 thousand cars.

 Its the first mass volume electric car, Zero emission electric car, in the market.
I was running, as Chris said, to be the CEO of a large software company called SAP and then Peres said, "well won't you run this project?" And i said, "I'm ready for CEO" and he said, "oh no no no no. You have to explain to me what is more important than saving your country and saving the world, what you would go and do?" And i had to quit and come and do this thing called A Better Place.
Then we decided to scale it up . We went to other countries. As i said we went to Denmark. And Denmark set this beautiful policy called the I Q test, it inversely proportional to taxes.
They put 180 percent tax on gasoline cars and zero tax on emission cars.
So if you want to buy a gasoline car in Denmark it costs you about 60,000 Euros.
If you buy our car it's about 20,000 Euros.
If you fail the IQ test they ask you to leave the country.(laughter)
We were then sort of coined as the guys who run only in small islands.
I know most people don't think of Israel as a small island.
But Israel is a small island. It's a transportation island.
if you drive your car outside Israel its stolen.(laughter)
If you are thinking about it in terms of islands, we decided to go to the biggest island that we could find.
And that was Australia. The third country we announced was Australia.
Its got three centres --In Brisbane, Melborne, in Sidney--and one freeway, one electric freeway that connects them.
The next island that was not hard to find, ad that was Hawaii.
We decided to come into the U.S. and pick the best places--the one where you didn't ned any range extension.
Hawaii you can drive around the island on one battery.
And if you really have a long day you can switch,
and keep on driving around the island.
The second one was the San Francisco Bay Area where Gavin Newson created a beautiful policy across all the mayors.
He decided he's going to take over the state, unofficially, and then officially.
And then created this beautiful Region One Policy. In the San Francisco Bay Area not only do you have the highest concentration of Priuses, but you also have the perfect range extender.
its called the other car.
as we started scaling it up we looked at what is the problem to come up to the U.S.? and the most fascinating thing we've learned when you have small problems on the individual level, like the


price of gasoline to drive every morning. You don’t notice it, but when the aggregate come up you are dead Alright?
So the price of oil, much like lots of curves that we've seen, goes along a depletion curve.
the foundation of this curve is that we keep losing the wells that are close to the ground and we keep getting the wells that are farther away from the ground.
It becomes more and more expensive to dig them out.
You think, well its been up, It's been down, its been up, it's going to keep on going up and down. Here is the problem:
At 147 dollars a barrel, which it were in six months ago, the U.S. spent a ton of money to get oil. The we lost our economy and we went back down to 47,
Some times it is 40 some times it is 50. Now we are running a stimulus package.
Its called the trillion dollar stimulus package.
We are going to revive the economy. Hopefully it happens between now and 2015. Some where in that space. What happens when the economy recovers?
By 2015 we will have at least 250 million new cars even at the pace we are going at right now. That's a 30 percent demand on oil.
That’s another 25 million barrels of oil a day, that's all the U.S. usage today.
In other words at some point when we have recovered we go up to the peak.
Then we do the OPEC stimulus package also known as the 200 dollars a barrel.
We take our money and give it away. You know what happens at that point?
We go back down. It's going to go up and down. and the downs are going to be much longer, and the ups are going to be much shorter.
and that's the difference between problems that are additive, like CO2, which we go slowly up and then we tip, and the problems that are depletive, which we loose what we have, which oscillate, and then oscillate until we loose everything we've got.

we actually looked at what the answer would be.
Right? Remember in the campaign, one million hybrid cars by 2015.
That is 0.5 percent of the U.S. oil consumption.
that is oh point oh well percent of the rest of the world.
That wont do much difference
We looked at the MIT study: ten million electric cars on the global roads.
Ten million out of the 500 million we will add between now and then.
That’s the most pessimistic number you can have it's the most optimistic number because it means we will scale this industry from 100 thousand cars is 2011, to 10 million by 2016-- a 100 x growth in less than 5 years.
you have to remember that the world today is bringing in so many cars.
We have 10 million cars by region.
That’s an enormous amount of cars. China is adding those cars--India Russia, Brazil.
We have all those regions. Europe has solved it. they just put tax on gasoline. They'll be the first in line to get off because their prices are so high.
China solves it by edict. At some point they'll just declare that no gasoline car will come into the city. And that will be it. (zermatte switzerland has this)
The Indians don't even understand why we have a problem because most people in India fill two or three gallons every time. For them to get a battery that goes 120 miles is an extension of range, not a reduction in range.
We are the only ones that don’t have the price set right.
We don't have the industry set right.
We don't have any incentive to go and resolve it across the U.S.
Now where is the car industry on that?
Very interesting. The car industry has been focussed just on them selves
they basically looked at it and said, "car 1.0
we will solve everything within the car itself."

No infrastructure, no problem. we forgot about the entire chain around us.all that stuff that happens around. We are looking at the emergence of a car 2.0--a whole new market, a whole new business model.
The business model in which the money that is actually coming in to drive the car, the minutes, the miles if you want, that you are all familiar with, subsidize the price of the car, just like cell phones. You'll pay for the miles. and some of it will go back to the car maker.
some will go back to your own pocket.
But our cars are actually going to be cheaper than gasoline cars.
You are looking at a world where cars are matched with windmills.
In Denmark, we will drive all the cars in Denmark from windmills, not oil.
In Israel, we've asked to put a solar farm in the south of Israel.
And people said, "oh that’s a very large space that you are asking for"
And we said. " What if we had proven that the same space we found oil for the country for the next hundred years?"
And they said "we tried and there isn't any"
We said, No no, but what if we prove it?"
And they said, "Well you can dig," and we decided to dig up. instead of digging down.
These are the perfect matches to one another.
All you need is about 10 percent of the electricity generated.
Think of it as a project that spans over about 10 years.
that is about one percent per year( 10 percent)
now we are looking at solving big problems,
We need to start thinking in two numbers.
and those are not 20 percent in 2020.
The two numbers are zero, as in zero footprint or zero oil and scale it infinity.
And when we go to COP15 at the end of this year we cant stop thinking of padding CO2.
We have to start thinking of giving knickers to countries who are willing to go to this kind of scale.
One car emits 4 tons.(CO2/year) and actually 700 and change million cars today emit 2.8 billion tons of CO2
 We have to start thinking of giving knickers to countries who are willing to go to this kind of scale.
One car emits 4 tons.(CO2/year) and actually 700 and change million cars today emit 2.8 billion tons of CO2
Thats addive, about 25 percent of our problem.
cars and truck add up to about 25 percent of the worlds CO2 emissions, we have to come and attack this problem with a focus, with an effort that actually says, we're going to go to zero  before the world ends.
I actually shared this with some legislators here in the U.S.
I shared it with a gentleman called bobby Kennedy Jr, who is one of my idols.
I told him one of the reasons that his uncle was remembered ius because we are going to send a man to the moon and we will do it by the end of the decade.
He did'nt say we're going to send a man 20 percent to the moon.
and there will be about 20 percent chance we will be able to recover him.
(laughter)

He actually shared with me another story, which is from about 200 years ago.

200 years ago parliament, in great Britain, there was a long argument over economy verses morality.
25 percent, just like 25 percent emissions today, comes from cars.
25 percent of their energy for the entire industrial world in the U.K.
came from a source of energy that was immoral: Human slaves and there was an argument. Should we stop using slaves? and what would it do to our economy?
And the people said, "Well we need to take time to do it.
Lets not do it immediately. Maybe we free the kids and keep the slaves
and after a month of arguments they decided to stop slavery.
And the industrial revolution started with in less than one year.
And the U.K. had 100 years of economic growth.
and we have to make the right moral decision. To have it to make it immediately.
We need to have presidential leadership just like we had in Israel that said we will end oil.
And we need to do it not within 20 years or 50 years, but with in this presidential term
because if we don't we will lose our economy, right after we lose our morality

Thank you very much.