Systems thinking revolutionises car industry

I have just been to see Shai Agassi, founder of Better Place, who claims he will wean the world off oil by stimulating the mass adoption of electric cars.

At the heart of the Better Place approach is the exchangeable battery, which allows the electric car to be refuelled on the garage forecourt in minutes, rather than taking hours to recharge. Sophisticated software will send drivers to the nearest swapping point and modulate the draw-down on the electricity grid. And the pricing formula promises to make this cheaper than conventional motoring.

Agassi intends to revolutionise the car industry. He is launching next year in Israel, followed by Denmark, and then Australia.

Better Place is a fascinating example of a systems approach to innovation, combining technology change, software, and a new business model. Agassi carefully mapped his system, before picking the intervention that could disrupt the whole system. He successfully harnessed a major incumbent – Renault Nissan - to come on the journey with him, immediately gaining scale and credibility. And he has spent time assessing the wider impacts of his approach on energy demand to maximise the sustainability benefits.

This is a tantalising proposition. It does rely heavily on tax breaks, and of course it helps to be rich and well connected like Agassi when starting such a venture. But if it works, it will show that an entrepreneur disruptor, taking a systems approach, can change a major global industry.

Better Place features in our Megacities on the Move toolkit as an example of the approaches cities need to take to now, to plan for the challenges of the future. For more on our Six Solutions for Sustainable Urban Mobility click here.