Renault to invest up to 1 billion in electric car

"This is the cost for a three-year car program," Shai Agassi, the founder and chief executive of California-based Project Better Place, said on the sidelines of a news conference to introduce the electric car prototype.

Renault and Nissan signed a deal with Better Place in January to begin mass producing electric cars as a part of a project to develop alternative energy sources and slash oil dependency.

Better Place will build the first electric grids in Israel and Denmark, with initial deployment slated for 2010.

Denmark's DONG Energy recently signed a letter of intent with Better Place to introduce the electric cars to the Scandinavian country, where the batteries will be charged using wind power.

DONG Energy is the world's largest offshore wind power operator, with several wind farms in Denmark and Britain.

Agassi said that up to 20 percent of Denmark's electricity production comes from wind but that 7 percent was not being used - enough to power every car in Scandinavia.

A few dozen cars will be available in Israel later in 2008, mainly for demonstration.

In Israel, much of the electricity is generated using fossil fuels such as coal, though natural gas is now being introduced. But Agassi said the plan was to use solar energy generated in Israel's Negev Desert to power the batteries.

"If all of Israel traveled by electric cars, you would need to add 6 percent of electricity production," Agassi said.

Renault will provide Better Place with vehicles while Nissan, through its joint venture with NEC, has created a lithium-ion battery pack. The project will also use batteries made by A123 Systems.

The batteries, weighing about 200 kg, will have a range of 160 to 200 km before needing to be recharged or swapped.

Agassi said the project was open to anyone who wants to join.

The initial $200 million investment in Better Place is led by holding company Israel Corp, and includes Morgan Stanley, venture capital firm Vantage Point and a group of private investors.

Better Place in Israel will deploy more than 500,000 charging spots, including at the homes and offices of its clients, and hundreds of battery exchange stations.

Moshe Kaplinsky, CEO of Better Place Israel, said a study conducted by Israeli consultancy and research institute Geocartography Knowledge Group, showed that two thirds of the public have a positive opinion of electric cars.

"We are not operating in a climate of indifference. The Israeli public is interested in what we are doing," Kaplinsky said. "We need to stop our dependence on oil."

In Israel, where most of its oil comes from Russia, 1.2 million households own cars and 210,000 would consider purchasing an electric car, the study showed.

Agassi said Better Place was in discussions in other countries to introduce similar projects.

European countries are interested in Better Place for environmental reasons while Asia is seeking to reduce pollution, and Africa sees huge potential to generate solar energy in the Sahara Desert, Agassi said.

North America is seeking to reduce its oil dependence.

"What happens when oil producers say: 'We don't take dollars anymore,'" Agassi said.