A Palo Alto-based company will provide Israel with massive infrastructure to put electric cars on the road.
The car companies will provide vehicles, while Project Better Place will produce lithium-ion batteries and the facilities to recharge and replace batteries while on the go.
The cars will be available by 2011, and the Israeli government will provide a tax incentive to consumers who buy them until 2019.
The cars will be a cheaper alternative to gasoline -- which costs about twice as much in Israel as in the United States -- because electric power will be bought in advance, according to the company.
Consumers will purchase a battery and then pay a set monthly fee for a certain amount of power, similar to signing a cell phone contract for monthly minutes. This system makes drivers less susceptible to market fluctuations in energy price.
Project Better Place will create 500,000 separate recharging stations in the tiny nation, which is roughly the size of New Jersey.
While critics of electric cars have said the battery's short life makes it unfit for long-distance driving, Israel is small and its cities close enough to be a perfect testing ground, according to the company.
An on-board computer will tell drivers how much power is left and where to recharge nearby.
The cars Renault is to develop will perform similar to other 1.6-liter gasoline engines.
The batteries will last 60 miles per charge in urban stop-start traffic conditions and 96 miles on highways, a spokesperson for Project Better Place said.
Overall, the batteries will last 120,000-150,000 miles, at a cost of $15,000-$20,000 per battery, she said.
The company is spending $200 million on the venture, with funding from Palo Alto-based Venture Partners as well as Morgan Stanley, Israel Corp., VantagePoint and individual investors such as James Wolfensohn, former president of the World Bank, she said.
Project Better Place launched last October. Founder and CEO American-Israeli Shai Agassi earlier worked for software giant SAP AG, which has an office in Palo Alto.
Agassi could not be reached for comment Tuesday because he was out of the country, the company representative said.
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