Shai Agassi has been pondering what it will take for electric vehicles to beat cheap gasoline-powered competitors. And he got some advice from former president Bill Clinton in 2006: giving away the car is a sure way to succeed.

Clinton offered this advice a year before Agassi launched Better Place, a company dedicated to powering EVs with swappable batteries and a subscription-based charging model. The company ousted Agassi in October and has pulled the plug on US and Australia operations, and is now focused solely on Israel and Denmark.

Writing over on LinkedIn, Agassi says he heard Clinton and current Israel president Shimon Peres speaking at a conference seven years ago. He approached Clinton and pitched his thoughts on converting Israel to electric mobility. At that time, Agassi was doing the numbers and figured he could sell an EV with a battery for about $32,000. He tried to convince Clinton that EV drivers would be saving enough money on what would have been spent on gasoline over eight-to-12 years to make purchasing a more expensive electric car economically sensible.

Clinton thought it was a waste of time. "By the time you will convince the rich folks in Israel to try it, then get the average folks in Israel to try it, then bring it to the US for our rich folks... the world will run out of time," Clinton reportedly said to Agassi.

Once that gasoline-engine car gets to about eight years old, it's going to be selling for less than $3,000, Clinton said. The EV has to be beat that price: "As a matter of fact, if you can give away your car for free, that's a sure way to succeed." Okay, that sounds good, but how do you give the EV away for free and still make money? "I don't know...you're the smart man around here," Clinton shot back before turning around and walking away.

It may sound strange, but Agassi sees Clinton's comment as the best business advice he's ever received. For Agassi, the comment wasn't really about selling the EV for free, but about finding a way to reduce the cost of the battery to, essentially, zero. It remains a compelling dream.


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    • 1 Second Ago
  • 51 Comments
      • 1 Year Ago
      Its like the cellular phone business model...sell minutes, or miles in the base of batteries...
        Spec
        • 1 Year Ago
        Except that you have to pay $20K+ for the phone and you can never switch to a different cellphone carrier.
      Jim1961
      • 1 Year Ago
      Clinton makes an off the cuff comment that nobody, including Clinton, takes seriously, Agassi comments on that comment and ABG calls it news. Amazing!
      carney373
      • 1 Year Ago
      Interesting idea. After all Gillette loses money on the handle, makes it up later on the blades. Same idea with game console makers - lose money at least in the first few years on the console, make it up later on the games. Printer manufacturers make money on their proprietary overpriced ink cartridges (which constantly change with each model to stay ahead of generic knock-off makers - no standardization). So either hugely discount the car or outright give it away, as long as you can somehow lock in the driver into your and only your method of giving that car energy to move.
        Spec
        • 1 Year Ago
        @carney373
        But the thing is that you can accomplish the same thing with a loan or a lease.
      delsolo1
      • 1 Year Ago
      Its time to ween Big Oil off their subsidies, in addition the true cost of gasoline should be reflected at the pump.
        Marcopolo
        • 1 Year Ago
        @delsolo1
        @ delsolo1 'Big Oil' receives no subsidies, but if you removed all subsidies from the oil industry, the US pump price wouldn't increase by more that 1 cent per gallon. Like Shai Aggassi, quoting inaccurate slogans and fantasies, is not helpful.
          Marco Polo
          • 1 Year Ago
          @Marcopolo
          Spec, Tax deductions are a principle of business. You can't single out one industry you don't like, and discriminate. But, would it help EV sales ? If higher gasoline prices were the only factor, then those countries like the UK with much higher fuel prices would be flooded with EV's ! Since that's not the case, other factors must exist.
          2 wheeled menace
          • 1 Year Ago
          @Marcopolo
          Big oil receives plenty of subsidies, in the form of tax breaks, oil wars, and the majority of federal decision makers being in their pocket and all too often, looking the other way when they pollute.
          EZEE
          • 1 Year Ago
          @Marcopolo
          Spec/2Wheel How about a flat end user tax, no exceptions, no loopholes? You want to do business in the USA, this is the price. Period. As far as the military and foreign adventures....lets see. As the left wing, libertairian, and right wing (me) person, my proposal would be: 1. Let Europe and everyone else defend themselves. They have gotten a free ride for way to long. Eff em. 2. In exchange for a big cut in defense (yes,I said it), lets expand drilling in the USA, plus Alaska. Maybe some fracking in remote areas. 3. In exchange for the extra drilling, I will agree to shut down keystone, and put in incentives for homes to install wind or solar. 4. Te drilling will go to make up any shortfall from non-western hemisphere oil sources. 5. Every penny of the defense cuts goes toward paying down the debt, with only inflation adjusted changes to entitlements, There. How does that work? Something to make everyone happy and something to piss everyone off. Best deal possible.
          Spec
          • 1 Year Ago
          @Marcopolo
          Big oil does receive some subsidies. There are various federal 'drilling technology' programs and what not. But they are relatively trivial. However, they do receive huge tax breaks though that they clearly do not need. People are going to buy their product and they are not in tough times so they can give up the tax-breaks. But the real big 'subsidy' they get is the US military in the Persian/Arabian Gulf.
      Marcopolo
      • 1 Year Ago
      @ Letstakeawalk Very noble, and very much in the spirit of social justice and St Francis. From a moral viewpoint, you are certainly on the side of the Angels. However, sadly real human economics don't work like that ! Socialism, always fails (even benign socialism). The US is no longer rich enough to afford to continue to implement 'something for nothing' programs ! The US is in a trade and economic war against the PRC, a resurgent Russia, the EU. The US needs every citizen to become productive, at get back to the principles that made the US the greatest power on earth. Hard work, innovation, competition, self-reliance, discipline, creativity, opportunity through endeavour, pursuit of excellence, economic growth, creation of wealth, and private philanthropy. Like you, my parish priest would be shaking his head in despair on hearing such sentiments. But the reality is the 'poor' can become a self perpetrating industry. The same inner city 'slums', and dangerous 'hoods', become transformed by private property developers, into desirable, safe, neighbourhoods, by the difference in attitude of the people who live there. I left the UK when the economy was reduced to third world status, by the disastrous policies of the UK socialists, and trade unionists. The obsession of how to cut up the 'economic cake', equally, only led to the cake getting smaller, until not only was there almost no cake, but no one wanted the type of cake produced ! The Thatcher revolution rescued Britain economically, at great cost and much pain. In my own career, I've rescued businesses, which had became run for the benefit of the least productive employees, not the shareholders or customers. The pain of reform is real, but in the end, the gains are worth the sacrifice.
      Marcopolo
      • 1 Year Ago
      @JakeY Battery leasing isn't free ! It's just another form of finance. The cost must always be recovered by the service provider. Better Place is close to bankruptcy.
      Marco Polo
      • 1 Year Ago
      @Electron As usual, you have no facts to back up what you say, so you just write personal abuse. ( Oh, btw, "perennial " means flowering each year ! )
      Ryan
      • 1 Year Ago
      If you are going to spend all that money to build a company, it is important to have some customers first. And if you try and sell a car or solar panels for too much money and just burn through the investments without implementing anything, what is the point? It might be an 75% early adopter subsidy, but it will get them out there, it will drive demand, it will make people look into it, and you can get customers using the battery charging/changing places around town to support more. You could even put big advertisements on the cars and they will get driven. The car sharing model is also an interesting one for early EVs to get them out there in big cities. But I think that tourists would use those more than the locals who have to drive to work 5 days a week at a set time.
      Letstakeawalk
      • 1 Year Ago
      I think my proposal that EVs be given away to the poor - who would most benefit from getting away from having to buy gasoline - mirrors Mr. Clinton's thoughts.
        Letstakeawalk
        • 1 Year Ago
        @Letstakeawalk
        My actual suggestion was a sliding scale for incentives, based on income. People with lots of money, who can easily afford an EV, get nothing. Those who have little, and would benefit the most, get a big incentive, possibly enough to cover the cost of an entry-level BEV. "It's a nice way of subsidizing something without saying you're subsidizing it." We're already heavily subsidizing BEVs. I'd rather subsidize the poor than the rich. But I'm well aware of your personal opinion, that there shouldn't be any subsidies at all, for anyone. " Also, wouldn't it be screwy for one person to pay $32k for a new electric car, and another person to get it for free?" We already provide free food, free housing, free health care, and free education - just saying. The benefit to the poor of not having to pay for reliable transportation could allow them to use their limited income in a better way than by buying gasoline. "Maybe you ought to think about two or three wheeled vehicles, as they are dramatically less expensive, cheaper to charge, and cheaper to maintain." "What's wrong with 2 wheels?" LOL - you obviously have me mistaken for an opponent to bicycles and walking. Re-read my name. The best solution for the poor is to provide them access to work, shopping, and educational opportunities where they don't need any motorized form of transportation at all. But that has a different economic cost, as a government is required to buy and maintain land that otherwise would be very valuable. Around here, the city has been closing down inner-city projects, selling the land to developers (retail and residential), and rebuilding the housing projects out in the suburbs. Many of the working poor are no longer able to walk or ride a bike to work or school...
        2 wheeled menace
        • 1 Year Ago
        @Letstakeawalk
        Maybe you should start a charity then.
      Anderlan
      • 1 Year Ago
      Rideshare? That is, rental only? The way to stop oil before we run out of time is to put quickly and massively rising fee on the stuff (fossil carbon) and return it to everyone equally. Money stays in the economy, import tariffs and export subsidies can be legally levied on other nations that don't play along. But conservatives don't believe in any type of government action (except when they DO ACTUALLY believe in heavy-handed government action on whichever issues they seem to like, and whichever issues big business pays conservative politicians to like). We are so damned stupid.
        Spec
        • 1 Year Ago
        @Anderlan
        Yep, a fee-bate system would be great. Reduce pollution, reduce CO2, reduce the trade-deficit, create jobs in new technology areas, improve national security (by reducing dependence on oil from unstable regions), etc. It makes much too much sense to be adopted as policy. People will just hear 'raise taxes on gasoline' and freak out.
      Letstakeawalk
      • 1 Year Ago
      I'm going to use Mr. Clinton's response - smarter people than me can figure out how to best make it work. First thought: Give the carmakers a write-off for donating EVs.
      Electron
      • 1 Year Ago
      Hmm, the perennial voice of big oil/self (?) appointed thought police has been typing until he was blue in the face again in light of suspicions that technologiesmay be shelved that are less than welcome to vested interests...That makes it very likely that this is in fact very common practice.
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