EV, national security and Shai Agassi

In a previous blog post (Electrification Coalition: Adding momentum to EV deployment), I wondered about the emphasis on national security.

I went back and listened to Shai Agassi of Better Place from Nov 2008. He said a few things that were striking from a national security point of view.

First, that for a nation of the size of US, the idea that you have only a few days worth of oil storage is a national security issue - whether the world is a stable or not. There was never a serious way to address that risk, and EVs now make it possible at think about addressing the problem. This is validated by the fact that Israel - one of the countries with the greatest interest in oil - is the first country to go EV in a big way.

Second, the oil companies' business is about to change. I was aware of it but he said it in a way it brought home the point. Shai was asked about how oil companies would respond to electricification. He asked what would the CEO of Exxon say in 2017 to its share holders? They cant possibly say 'it was a good ride, thank you!'. They have dwindling reserves, and new reserves are harder and more expensive to get to. Shai reminded that oil companies are in energy business - they are selling fuel-miles. Oil companies could have life beyond oil too.

Third, when asked about how detroit companies would respond. He smiled and said they get the idea that they have to change. He pointed out that Detroit successfully retooled themselves in early 40s. When the companies pushed back, FDR simply said 'fall in line' and forced them to comply. For almost 3 years during the 40s, Detroit didnt make any cars at all. So from a jobs point of view, it can be done. It is painful and the signal must be clear (my paraphrasing). Elsewhere at Copenhagen Business Council's meeting, he said that by 2020, the largest car manufacturer might very well be Chinese and not American or German. There is the issue of loss of competitiveness in an international market.

He argued that approaches such as rideshare is really in the taxi business and not in the personal car business. He wants new business models in the car industry where you get a car for free (like razor) and sell battery-based fuel-miles for a price (like blades). Anybody can provide the fuel miles - whether it is exxon or wind power. He talked about about how he is happy to consume energy at a higher price 10c/KWH and higher uncertainty provided by Wind energy (compared 5c/KWH of coal) because the value created elsewhere is higher.

Overall highly recommended.