As I wrote a few weeks ago, servicization — converting owning goods into services — is a hot topic that introduces some interesting operating problems. One of the typical examples is Better Place, an Israeli firm that aims to servicize owning an electric car. Yes, you will own the car but you won’t own the battery. Instead you will swap the battery just as you might swap an empty propane tank for your gas grill.Vodpod videos no longer available.
As with all these servicizing examples, I wonder how well this plan will work. I see the real advantage. If all I need to do is drive from home to work, owning an electric car is viable. Given a range of, say, 100 miles, I can take a car to and from work as well as run a few errands during one day and then have the night to recharge the battery. If I aim to make a long drive, however, an electric car is going to be a problem. Charging up every 100 miles or so, would really slow down a trip. Zipping in and swapping the battery solves the problem. Just like swapping propane tanks is quicker and more convenient than getting them refilled, changing batteries provides convenience and flexibility.
But would anyone sign up for this? I think that there is a break down with the propane tank analogy. The propane tank is not proprietary; I can swap my tank over at the True Value store or at the supermarket even though have different suppliers. The batteries are proprietary. Signing up with Better Place locks you into doing business with them for as long as you own the car. Move some place where they haven’t built their network or if they raise their rates, you are pretty much out of luck. It will be interesting to see what they promise in terms of price stability or compatibility with other networks in order to encourage customers to sign up.