Agassi's plan to be the Google of batteries

There's more to Shai Agassi's electric car startup, Better Place, than meets the casual glance. As the ex-SAP executive made clear while announcing the $200m seed capital he has secured, he wants his new baby to become "the Google of batteries".

That means more than simply becoming the default company supplying charging points for battery vehicles.

First, Agassi's dream involves creating the battery equivalent of petrol stations, where drivers can swap an entire, depleted battery pack for a freshly charged replacement - removing the requirement to spend hours recharging at the finite power rates available from the grid.

This plan will require that Better Place has deep relationships not just with carmakers - who must build vehicles with standardised swappable batteries - but also with the utility companies supplying the power. Agassi says that Better Place will use distributed software in the cars and in the infrastructure to " flatten demand", to avoid a future peak where hundreds of thousands of commuters might arrive home of an evening and all plug in their cars.

This flattening of power draw will, presumably, mean that owners who habitually head out for dinner after an hour or so will see their cars charged preferentially - and perhaps at a price premium. This may take some explaining.

Secondly, Agassi and his investors envisage the switch stations and the batteries in customers' parked cars being used as a distributed electrical storage system, feeding power back into the grid to help the utility companies meet peaks in demand. This will be another surprising thing to get across to sceptical consumers – that their car might be temporarily feeding power back into the grid to boil their kettle in the evening, rather than trickle charging in the garage.

And lastly, Agassi talks of borrowing the business model of the mobile phone carriers, by treating the purchase of hardware as part of a larger transaction involving an ongoing commitment to spend. In this way, he hopes to make his electric cars cheaper to buy than petrol equivalents - an essential step to overturn such an entrenched alternative.

This means that Better Place will need to slide itself between the customer and their electricity bill when it comes to recharging at home, applying a charging surcharge, or a fee per mile, so that the subscription element of the billing has a chance to repay hardware subsidies over the long term. It will not be enough for Better Place to make its money from the switch stations. Again, it may be tough to get across to consumers that they are paying more for the electricity that comes out of their own wall socket because they've signed up for a five-year charging agreement.

Agassi’s plan is audacious, visionary and potentially highly lucrative. But even putting technology aside, it requires some very big wins in public perception and marketing for it to succeed.