Israel to keep electric car recharging fees low

The move will mean that the Israel Electric Corporation will greatly undercut the rates that Better Place, the electric car infrastructure company, is offering.

Better Place offers subscribers a much higher rate than the equivalent of household electricity rates expected to be offered by competitors, including Gnergy. Better Place and its founder and CEO, Shai Agassi, have been pioneers in promoting the concept that motorists can rid themselves entirely of the internal combustion gasoline-powered engine by making the switch to electric-powered cars that can be refueled by recharging the battery or by replacing it at a refueling station.

Yesterday Water and Energy Resources Minister Uzi Landau signed off on the change in regulations that will bar motorists from simply recharging their electric car batteries at home, but will make the service available by firms such as Better Place and Gnergy.

The Israel Electric Corporation will also offer public recharging facilities. The regulations bar a supplier such as Better Place and Gnergy from requiring that their customers use only their own company's facilities.

It should be noted that even though recharging an electric car at household electricity rates through the IEC or Gnergy will make the actual fuel bill for the car significantly less than motorists general pay in gasoline, the price advantage of operating an electric car will be reduced by the major cost of renting the electric car battery itself.

A calculation by TheMarker reveals that when shorter distances are driven, gasoline-powered cars are still cheaper to operate, but as the number of kilometers increases, the advantage of electric power gradually emerges.

Better Place is offering its customers the advantage of cheaper insurance in connection with the operation of the Renault model, for example, compared to gasoline-powered cars, and maintenance costs are also lower on electric cars.

Better Place also provides the battery-replacement infrastructure that enables motorists to travel greater distances by popping out their old battery on the road and installing a new one.

Gnergy has not yet begun offering charging station services, but it is expected to do so shortly, in partnership with Kardan's Pango, the firm that offers payment of parking meter fees through customer's cell phone. The electricity charging firm will be called Pango Charging.

Gasoline is heavily taxed in Israel. There was concern in the electric car industry that similar levies would be imposed on electricity for electric car batteries to compensate the state for the loss in revenues the government would incur if electric car use takes off and gasoline consumption declines.

For the moment, at least, that appears not to be the case.