Newsletter: Return of the tech that didn’t work 10 years ago

Is cleantech replaying its worstest hits?

23 August 2021

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If at first an idea doesn’t succeed, wait a few years, raise a bunch of VC cash and try again.

That’s the unexpected philosophy behind a resurgence in electric-vehicle battery swapping. Ample (not to be confused with EV charging startup Amply) just raised $160 million for its contrarian EV charging concept, Eric Wesoff reports.

On paper, the idea has some appeal:

People like driving electric, but they don’t like waiting for ages to charge their cars.
Swapping fully charged batteries happens fast, delivering a customer experience as good as or better than a gas station.

The reason this is contrarian is it was the same idea pioneered by Israeli startup Better Place, which imploded nearly a decade ago in one of the biggest cleantech bankruptcies ever.

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In that sense, the Ample investment parallels investor interest in Heliogen, which is hoping to bring back concentrated solar power after that tech lost out to mainstream PV solar panels years ago. That startup is going public, chasing a $2 billion valuation.

Just because something didn’t work at an earlier stage of the market doesn’t mean it never can. But the onus is on these companies to prove why things will be different this time around.

Some reasons for Better Place’s downfall may not apply anymore:

That company came very early on in the adoption of EVs, so there was a much smaller customer population to attract.
Better Place took a capital-intensive approach, building out a nationwide network of highly engineered battery swap stations before it was clear the business model worked.

I stumbled upon an abandoned Better Place station at a highway rest stop during a reporting trip to Israel in 2018. It was built to last, and the swapping area now doubles as a garbage receptacle.

Many of the dynamics that Better Place struggled with still hold true, though:

The business model involves innovating on hardware while also becoming a real estate developer and operating customer-facing charging stations. That’s doable in theory, but requires a lot of different skillsets.
Success also requires convincing car makers to play along, which is never an outcome that should be taken for granted.

Eric asked co-founder Khaled Hassounah how Ample hooks up its batteries to the wide variety of cars on the market and heard this unconventional response:

“At this stage, everybody builds more or less the same battery, even though they try to convince us otherwise.”

That’s a very different message than, say, what carmakers and battery companies are telling the world, which is all about sophisticated fine-tuning and competitive differentiation. And certainly, car batteries come in different sizes and shapes, but Ample says it has a way to standardize across all that.

Another problem is that this vision conflicts with the dominant form of battery ownership—namely, anyone buying an EV is sinking a bunch of their cash into the battery. To then turn around and let Ample yank that expensive asset out and replace it with other batteries that are supposedly just as good requires a capacious degree of flexibility from both customer and vehicle warranty.

Then again, a move away from the current battery ownership model could make a lot of sense.

Electric-bus-maker Proterra offers a battery lease program, so transit agencies can buy the bus, but pay a service fee to use the battery, lowering the upfront cost.
Ample is testing its product with Uber in San Francisco. Fleet owners with pain points around charging time could see business benefits to something like this.

The actual battery swap was never the obstacle for Better Place. And Ample says it designed an easier way to do it. It also says its stations are modular and can be plopped down in a parking space without heavy construction: “A whole city deployed in weeks”!

Minimizing infrastructure needs for EV charging is a good idea. But that timeline takes an exceedingly optimistic view of permitting and land acquisition. And there’s still the question of how much power is needed to charge a city’s worth of Ample stations, which absolutely will have impact on local grid operations.

But it’s a new decade, so why not give it a try?

By the way, I’m going to be off newsletter duty for the next few days as I recharge my batteries — or swap them out, if you prefer. Have a restful week, and I’ll see you back here next week!