Renault battery car to be sold in Israel

Sedan likely to feature Nissan power source in deal to begin in 2011.

Christine Tierney / The Detroit News

The Renault-Nissan alliance plans to start selling thousands of electric cars in Israel in 2011 in what it believes will be the first mass commercialization of the zero-emission vehicles to individual customers, Renault sources say.

Carlos Ghosn, CEO of Renault SA of France and Japan’s Nissan Motor Co., is expected to sign a preliminary accord today with Israeli entrepreneur Shai Agassi, who will supply 500,000 battery-charging stations, the sources said.

The project highlights the auto industry’s renewed interest in electric cars. General Motors Corp., Ford Motor Co. and Toyota Motor Corp. all have offered electric cars. But the vehicles generally failed to catch on with consumers because their driving range was too limited. Automakers now believe the development of better and more powerful batteries will make them a viable option.

The project in Israel is part of the Renault-Nissan alliance’s goal to offer electric cars worldwide in the next three to four years. If demand proves strong, Israel could serve as a model for other sites, a Renault source said.

Both partners consider Israel a good testing ground: It is small enough that a network of charging stations can be set up comparatively easily, and 90 percent of car owners drive fewer than 45 miles a day.

In addition, the government offers big tax breaks on electric cars to cut Israel’s dependence on imported oil. With a gallon of gas costing nearly $7 in Israel, Renault estimates that its electric car will cost less to own than conventional cars.

The car will be a midsize Renault sedan fitted with a lithium-ion battery. Nissan’s battery-making venture with Japanese electronics firm NEC Corp. is likely to supply the batteries, Renault sources said.

They declined to disclose sales goals, but a senior Renault executive has said the company would be able to justify the construction of a plant building only electric cars if annual sales reached 10,000.

Compared with its Japanese rivals, Nissan lagged in developing hybrids — gasoline-electric vehicles that offer more convenience than pure electric models but are not as clean.

Ghosn said last October at the Tokyo motor show that Renault and Nissan would focus on electric cars, and Nissan displayed an electric car concept at the show, the Pivo2.

Agassi, a former executive with German business software giant SAP, is CEO of Project Better Place, a firm dedicated to delivering the infrastructure to support electric cars. Its investors include U.S. investment bank Morgan Stanley.

In addition to providing charging stations, Project Better Place also would set up 150 battery-replacement outlets.

"Clearly, the ability to charge in public places is important," said Ron Cogan, editor of GreenCar.com. "But it takes a while to get a reasonable amount of charge." Other challenges, he said, include the high cost of lithium-ion batteries.

On its Web site, Project Better Place said its objective reflected two trends, the rise in oil prices and the falling cost of cutting-edge batteries. "For the first time, the per mile energy cost for an electric vehicle has fallen below that of an internal combustion engine-powered vehicle," it said on its site.

"Within a decade, the cost of energy production and storage for the lifetime of an electric vehicle will fall below the fuel costs for a single year of a traditional automobile."