Saturday, June 23, 2012

How can we make the world a better place?

Oil use related to driving cars has led to profound economic, health, and environmental problems on our planet. One Bay Area company, Better Place, has a unique approach to helping solve those problems. At our May Green Project Management seminar, Peter Cooper of Better Place explained how the company is attempting to break oil’s monopoly on transportation -- by accelerating the adoption of electric vehicles.

The past year has brought more news about new electric cars, and early adopters now have several makes of cars to choose among. But most people aren’t early adopters. How do you convince those people to drive electric cars? Many concerns remain about price, battery range, and charging. Better Place is trying to take a situation that doesn’t currently serve most consumers and change it to something that does work.

The Better Place model

Currently, instead of going to the consumer, the electric vehicle (EV) universe is asking the consumer to come to it. Better Place is trying to shift this and to do something that doesn’t require consumers to change their behavior.

Their key is to separate the battery from the car, both physically and financially. This makes driving more affordable, convenient, and sustainable.

Batteries account for the high cost of EVs, but in Better Place’s model, the consumer buys the car and merely leases the battery. Better Place doesn’t produce cars but works with car manufacturers like Renault to produce cars that can all use the same battery. The price of these cars is now comparable to that of gas cars, and it’s expected to go down. Plus, since you're not buying the battery, you don’t have to deal with the car’s resale value decreasing when the battery degrades.

Range anxiety is eliminated with an infrastructure of charging stations that can also be used as battery-switch stations. Rather than having to wait for the battery to charge, drivers can switch their spent battery for a freshly charged one. In addition, the batteries are charged slowly in a cool environment, so they last longer to begin with (though drivers can charge the batteries at home, too). And as new batteries come on to the market, car owners get to upgrade to the better technology at no cost.

An important part of the Better Place infrastructure is their remote monitoring. A problem for EVs is that if the battery drains completely, it can be hard to keep it alive. The remote monitoring system monitors the battery power and allows for roadside assistance to be deployed if the battery is draining.

And the switching station knows when you’re coming and queues up a battery for you. So it takes about 5 minutes to go through a station, about a minute of which is the actual switch process.

As Better Place likes to explain it, in their model they are a service provider, like a cell phone company – and the consumer buys a plan to power their car as they would buy a cell phone plan.

The Better Place model is currently being implemented in several places around the world, including Australia and Hawaii. In Israel and Denmark, around 100,000 Renault cars are being deployed, with about 23 switch stations in Israel and 8 in Denmark.

You may be wondering when this will come to the Bay Area, where the company is headquartered. Better Place is looking at a pilot program for the area starting with some switch stations next year, and we might expect to see the cars here in a couple years. In the Bay Area, they’d need about 40 switch stations to support 100,000 cars.

Project management challenges and solutions

Change management is often a crucial part of project management, and implementing the Better Place model is no exception. Convincing people to make the change to their system requires a great deal of change management for both the industry and the consumer. People need to be convinced that the Better Place model works and will address the issues they now have with EVs – and that there’s even a reason to switch to EVs in the first place. In addition, governments need to be convinced there’s a benefit in adopting the model and supporting the necessary infrastructure.

The company has worked in areas where governments are willing to help with things like getting cheaper rent and good publicity. Then when they see that Better Place can execute, they are more willing to invest.

Each area has different needs, and therefore different motivations to promote EV adoption. Israel was motivated by the desire to decrease dependency on the oil that they get from their neighbors. Denmark, in contrast, is producing excess energy. Even Hawaii is producing excess wind energy at night, when demand is low. In places like this, the extra energy can be used at night for car charging, which avoids having to dump that energy.

Utilities in general can benefit from EVs storing intermittent energy. Car batteries can make up a virtual power plant, which can even be turned off when needed – another case where remote monitoring comes in handy.

In Australia, where gas prices are high – providing an excellent motivation to switch to EVs – Better Place worked to break the brand paradigm of people thinking their model works only in small countries or on islands. The right branding is a crucial element in adoption of the Better Place model.

To promote their brand in a way that will engage consumers, the company engages car companies, the media, construction, and big brands that touch lots of consumers. Engaging the consumers directly comes closer to launch, in the last year.

The adoption curve begins with technophiles, and then sustainability advocates. Then there’s a “chasm” – getting from early adopters into the first major segment of consumers. So they need to identify who those people are, and turn early adopters into advocates who can communicate with others and convince them to move to EVs. One example of a segment they would target is socially conscious, upwardly mobile, professional couples with children.

Of course, all of us can benefit from electric cars. Even those who don’t drive them will benefit from the cleaner air they make possible. But Better Place is doing a lot to make EVs more accessible to the general public so more of us can drive them – and I, for one, have been convinced by their excellent communication and change management. I look forward to the day when their cars and infrastructure are available in the Bay Area.

2 comments:

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