For background on Project Better Place, read part I here.
Project Better Place CEO Shai Agassi told a U.S. Congressional committee last month that the carmakers, component manufacturers, and electrical grid operators who “gain first-mover advantage” in his plan to have the world’s cars run on electricity instead of gasoline may share in “as big a prize as has ever been seen in the history of economic development.”
Tall talk, but Agassi isn’t just the head of some small, unknown company out to change the world. He’s also head of Israel Corp., Israel’s largest holding company, traded publicly on the Tel Aviv Stock Exchange. Israel Corp. has so far invested more than $20 million in Project Better Place and reportedly is prepared to invest up to $100 million.
Project Better Place has a number of strong allies that presumably would prosper should the company succeed in converting millions of motorists to drive electric instead of gasoline-powered vehicles. Another is Japanese carmaker, Nissan (NASDAQ: NSANY, Stock Forum), which in partnership with Renault plans to supply plug-in vehicles to Project Better Place as part of a strategy “to lead the automotive industry in zero emission vehicles worldwide. Central to that commitment is our investment in the electric vehicle…. (W)e plan to have a truly mass market (fully electric) vehicle available in the U.S. by 2012,” a Nissan North America senior vice president told a U.S. Congressional committee last month.
Still another potential corporate winner is DONG Energy A/S, Denmark’s largest power generator. Presently owned by the Danish government and local municipalities and utility companies, DONG is expected to go public “whenever conditions in the stock market as a whole are determined to be right,” a DONG executive told the same U.S. Congressional committee last month.
Based on Agassi’s Congressional testimony that Project Better Place is in “advanced” discussions with more than 30 countries and U.S. states and cities, Nissan ultimately might have to share the stage with General Motors (NYSE: GM, Stock Forum) and Toyota (NYSE: TM, Stock Forum), the two car companies considered best positioned to take the lead in plug-in electric vehicles. (See Felix Kramer’s Plug-in Electric Vehicle Progress Report For General Motors,Toyota, Honda and Ford.)
Like DONG in Denmark, major electric utilities in other countries might prosper. In Japan, for instance, it could be Tokyo Electric Power (OTO: TKECF, Stock Forum), while in the U.S. it could be innovative DukeEnergy (NYSE: DUK, Stock Forum) or well-positioned Echelon Corp. (NASDAQ: ELON, Stock Forum). These and other companies could be at the forefront of a new era where electrical substations double as service stations for electric vehicles. At least one U.S. utility – municipally owned – is already discussing doing exactly that.
On the flip side, investors should take note that if Project Better Place succeeds, it could become kingmaker in deciding whose lithium-ion car battery becomes the world standard. That could leave a lot of unhappy investors, because the race to develop li-ion car batteries now has more than a dozen participants. Given Nissan’s inside position, its car battery joint venture with NEC could make the latter a winner. However, given that cars have always been made differently for different markets, other winners could include A123Systems, which is working with GM. A123 is expected to go public in the not-too-distant future. (For more see Green Tech Expert Mike Millikin Predicts The ‘Big 3’ Of Lithium-ion Battery Firms - Part 1 of 2.)