Better Place’s battery-swap stations for Tokyo taxis get investor approval

Palo Alto, Calif.-based Better Place said today it’s flagging down a new potential revenue stream from Tokyo’s taxis.

The electric vehicle charging company’s very first investor Mike Granoff told the Cleantech Group he's pleased with the announcement because the Japanese government is validating and funding what the company is doing.

Better Place said it has received a financial award for an undisclosed amount from the Japanese government for a Tokyo pilot project, which is expected to jumpstart the world’s first four electric taxis having the company's switchable batteries.

If it works, it could lead to opportunities in other urban centers, although the company didn't specify which ones, while helping to transfer the technology to the mass market. 

The project, which comes following the company’s successful battery switch demonstration earlier this year in Yokohama, is slated to begin in January 2010.

Better Place was the only foreign company invited by Japan's Ministry of the Environment to participate in its EV study at Yokohama. The demo showcased the company’s switch technology to top auto executives and government officials from around the world.

“After a second time, the government of Japan has recognized the potential of our model in transforming electric drive,” Granoff said. “Taxis are a segment that use a ton of oil and have a ton of emissions. Some of them are driven 24 hours a day. They don’t stop other than for gas fill ups.”

Venture capitalist Granoff, the founder of Maniv Investments, helped put together the first small group of investors that committed $20 million to Better Place in 2007. Granoff has since become Better Place’s head of oil independence policies.

Maniv Investments is the parent of Maniv Energy Capital, which invests in the alternative energy sector.

Some of the well-funded startup's other backers include Morgan Stanley, VantagePoint Venture Partners, and Israel Corp. (see Electric car charging startup raises $200M).

Better Place’s battery switch technology includes the mechanisms and a control system that automatically replace the EV battery at a Better Place switch station. According to the company, the technology safely and quickly removes a depleted battery and transfers a fully-charged battery into the vehicle. The automated process happens while the driver is still in the vehicle and in less time than it takes to fill up a tank of gas, Better Place said.

Granoff said today’s announcement marks a vote of confidence from the Japanese government that the company can deliver what it says is a practical, cost-effective way to convert taxis to zero-emission vehicles. Tokyo has approximately 60,000 taxis—outranking New York, Paris, and Hong Kong.

Better Place plans to partner with Tokyo’s largest taxi operator, Nihon Kotsu. The project was commissioned by the Ministry of Economy, Trade, and Industry’s Natural Resources and Energy Agency.

The pilot is expected to showcase the daily potential applications of the Better Place model, and includes constructing a battery switch site in the Roppongi Hills area in central Tokyo. As many as four newly modified electric taxis are expected to operate from an existing taxi lane for environmentally-friendly vehicles at the Roppongi Hills complex.

Tokyo R&D, which specializes in automotive engineering and production, is expected to supply the EVs with the battery latch mechanisms and switchable batteries. Better Place said it picked Tokyo R&D because it has some of the most in-depth automotive engineering and EV experience in Japan.

Tokyo R&D plans to help build the battery switch site and provide diagnostic software for the pilot.

The vehicles are expected be put into regular use by the Nihon Kotsu, where battery switching duration, vehicle range, and battery resistance to degradation are to be tested in actual operating conditions.

Better Place is executing deployment plans and building out the infrastructure of charge spots and switch stations in its first two markets, Israel and Denmark (see Project Better Place goes to Denmark and Electric cars are coming to Israel).

Better Place is also moving forward in Australia, where it has announced plans build a network, through a partnership with electricity retailer AGL Energy (see Better Place to charge up Australia).

But Better Place isn’t the only company pursuing battery switching for taxis and beyond. Santa Rosa, Calif.-based ZAP is working on a joint venture to develop infrastructure to charge electric taxis in China (see New $25M financing to drive ZAP’s EU expansion). ZAP hasn't named its JV partner, but said it was a large, well-funded company. 

Auto manufacture Nissan and EV charging pioneer ECOtality are also committed to developing a charging network in Arizona (see Nissan and ECOtality envision an even Better Place).

In July, ECOtality raised $15 million to set up a network of charging stations it hopes to install across China (see ECOtality pulls $15M to build EV charging network in China).

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