‘It’s All About Energy, Stupid!’

A123 has drawn attention from politicians as well. Last week, U.S. Energy Secretary Samuel Bodman dropped by. Earlier this year, Vieau was invited to the White House, where an admiring George W. Bush took a peek at one of the company's plug-in hybrids. "He said he had been waiting for the day that a car could go 40 miles on electricity and not be a golf cart," says Vieau.

Better PLC; vehicle power grid

Shai Agassi was cruising along in his software career, until, he says, he was asked an "annoying" question at last year's World Economic Forum, the annual meeting of global elites: "What would you do to make the world a better place?"

What came pouring out was a 21-page manifesto on the end of oil—and a business plan to remake the world's transportation infrastructure. Earlier this year, Agassi left his position as a top executive at the software giant SAP and launched "Project Better PLC" (Better Place), his company to build a network of battery-charging stations for electric vehicles. Owners of battery-operated cars will pull into a Better Place station and switch an empty battery for a charged one, eliminating one of the chief obstacles to electric-vehicle transportation: the limited travel range.

The "smart grid" Agassi envisions will also allow plug-in hybrid owners to sell their car's energy back to the grid at peak hours. This "vehicle to grid" (V2G) concept is also being studied by utility companies, including Pacific Gas & Electric and Tesla, the electric-car manufacturer. PG&E chairman Peter Darbee envisions a day when customers will become suppliers. "After you drove to your office and parked at the appropriate receptacle, you could put in a sell order like you do today with stocks, so that if the price gets to say, 14 cents per kilowatt hour, your sell order goes through and we draw power on your car."

While the development of a mass-market electric car has been slowed by battery problems, Agassi says it makes sense to start building the grid now, just as cell-phone carriers built transmission towers before everyone owned a cell phone. He plans to start testing cars next year. "If you build the network, they will come," he says. Agassi has raised $200 million in venture capital so far, and while he is so far coy about where "Better" will build its first recharging stations, he has hinted that his native Israel, where gas costs around $6.50 a gallon and government policy promotes electric-vehicle transportation, would make a logical test market. Other "transportation islands" where exorbitant gas prices and favorable government policies make the cost of battery-operated cars more competitive include Singapore, Iceland, Denmark and Japan. No matter the language, Agassi is betting on a new way to say "fill 'er up."