Get Ready for the Car 2.0 Era

The CEO of electric vehicle startup Better Place, Shai Agassi, declared last week at San Francisco’s City Hall that we’re on the verge of delivering the era of “Car 2.0.” Before you cringe over the overuse of the Silicon Valley lingo used to describe the next generation of digital technology — Web 2.0 and Mobile 2.0 — here’s why we’re giving Agassi’s term a passing grade: With the news that Better Place plans to build a $1 billion electric vehicle charging network in the Bay Area with the support of city and state policies, the region that brought you the 2.0 moniker stands poised to usher in a whole new transportation paradigm for the digital age.
So what would Car 2.0 look like? The next generation of cars will be networked — both to the power grid and to communication networks — and will have the ease and functionality of our consumer electronics. And as startups and companies in Silicon Valley start working on the next generation of vehicles, IT and software tools will be used to deliver vehicle innovation. Tesla has already been trying to brand its cars as being developed in the Valley and aimed at disrupting Detroit, while Better Place has gone a step further, pulling some of the top talent from the software industry — including Agassi himself, who hails from SAP (s SAP).
Gadi Amit, the founder and principal designer for San Francisco-based NewDealDesign, which is helping design Better Place’s charging stations, battery swap stations and vehicle plug interfaces, says his firm is taking a cue from the user experience of gadgets and cell phones. The company already has a long history of designing consumer electronics like Dell’s (s DELL) eco PC, Fujitsu cell phones and the mobile device the Ogo 2.0. For Better Place’s charging stations that means using things like blinking LED lights and making the charging experience a couple-click “painless” process.

The electric cars themselves will largely look like regular cars but will plug into charging stations — about half the height of a parking meter — throughout the Bay Area, which will be able to charge two cars at a time. The charge will be controlled by smart software and a communication network, which will determine how much electricity will be used at any given time so that the utility can manage the load on the power grid. We’re not sure exactly what standards Better Place will use, but so-called smart charging is being worked on by several companies. V2Green, which was recently acquired by GridPoint, is currently using cellular networks to connect information between the vehicle and the utility.
While software like V2Green’s and Better Place’s will help usher in the next-generation of networked vehicle, the car becoming digital and smart has been a growing trend over the past couple of years. In-car GPS systems have grown in popularity and have become standard in new cars. As consumers have grown accustomed to always-on electronics, startups like Dash Navigation and big tech companies like Microsoft (S MSFT) have been working with car companies to build web-type experiences for vehicles. And every year at the annual Consumer Electronics Show, there are more car companies and vehicle gear than the year before.
But are consumers ready to embrace Car 2.0? According to a report from UC Berkeley’s Global Venture Lab, “The Electric Vehicle Charging Infrastructure Rollout Strategy,” in the Bay Area, the first users of a network like Better Place’s will live in densely populated areas, and will drive a high number of miles per day, likely via long-distance commutes.
Those users are also likely be sensitive to environmental decisions — and costs — but will have a significant amount of disposable income. A good indicator of whether someone would sign up for the network is if they’ve participated in a carpool, says the report. These early adopters will be the most likely to start using an EV network, but will also offer Better Place the best return on investment.
In the Bay Area, the report suggests that Santa Clara, Alameda and San Mateo would be good first options for an EV network. San Francisco, meanwhile, is unlikely to be one of the first locations to get a lot of charging stations because the driving distances within the city are shorter, and most residents live in apartment buildings. San Francisco residents might be a good candidates to buy electric vehicles, but could be more attracted to charging the cars at their workplaces, which are often in the Silicon Valley and Santa Clara regions.
Ultimately Amit says Better Place wants to focus on making the charging stations, vehicles and battery swap stations low-cost, yet well-designed. These chargers are for “mass deployment,” he says, and are “not just for the rich and famous.” We’ll see how much Better Place’s cars and subscription plans cost before seeing if they could reach mass adoption. And when/if Better Place’s $1 billion network gets built, the Bay Area and Silicon Valley are going to get the first crack at Car 2.0.