"The more the oil price goes up the better it is for the electric car. We know that structurally the price will go up," Nissan Europe's head of product planning and electric vehicles Pierre Loing said at the Geneva Car Show two months ago. He added that the company's electric vehicle program was based on making sense at $85 per barrel The Renault Nissan Alliance is Shai Agassi's partner in his electric car venture Better Place LLC.
Loing is one of the few managers in the industry willing to openly talk about the price of oil. The reason is obvious, even if no one wants to link the electric car's success to the public's distress and make a direct link between the attractiveness of his product and the rise in the price of gasoline, especially if gasoline prices could still go down. On the other hand, we're willing to bet that every time the price of oil crosses the psychological $100 per barrel threshold, electric car developers are popping the champagne in back rooms.
In 2007, "Globes" wrote that such high gas prices creates public pressure that forces decision-makers around the world to openly support initiatives to reduce dependence on oil. In the case of the electric car, this is reflected in willingness to increase subsidies and incentives for the vehicles and their batteries, and even to allocate public resources for building infrastructures.
Next week, as the price of gasoline hits $2.50 per liter, Better Place will unveil its pricing plans and battery charging package in Israel. We do not yet know what will be announced, but we'd like the company to keep its promise that if a customer commits in advance to recharging batteries for a long period (3-4 years), the price of the electric car will be lowered to the point where it will be given away in the same way that the price of mobile telephones are subsidized by mobile carriers.
Better Place's pricing model in Denmark, announced earlier this year, made no mention of subsidizing the electric car. We therefore have the impression that heavy users hoping for a free or even half-free Renault Fluence electric car are going to be disappointed.
Published by Globes [online], Israel business news - www.globes-online.com - on May 15, 2011
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