Battery capacity might not matter for the future of electric cars if Shai Agassi's vision is realized.  Agassi is one of Time Magazine's Heroes of the Environment 2008 and he's proposed a mashup of the automotive and mobile phone industries known as the Electric Recharge Grid Operator. The proposed ERGO would blanket the country with a network of "smart" charge spots, one day replacing the corner gas station.  Agassi runs Better Place, a mobility service provider that has a subscription-based model.

Drivers will subscribe to a specific plan and plug in anytime, anywhere, anytime, for less than the equivalent cost for gasoline.  Like with mobile phones today, industry will create a variety of plans -- unlimited miles, a maximum number of miles each month, or pay as you go -- all for less than the equivalent cost for gas. Providers will offer plugs at offices, malls and even in customers' homes. For long distance journeys beyond the battery's range, there will be stations where depleted batteries could be exchanged free of charge.  Read about how it works.

Agassi suggests that operators should offer cars at steep discounts, or even give them away as cell phones are today.  The profit would come from selling electricity, not technology. 

Israel will be the perfect testing ground for Agassi's concept.  Better Place got backing from Renault and $200 million in initial funding from Morgan Stanley and industrialist Idan Ofer, who owns Israel's largest oil refinery. With only 150 filling stations across the country and its closed borders, it will be easy to roll out.  As an added incentive, some of the world's top oil producers are unfriendly to Israel.  

Agassi predicts that by 2015 no more gasoline cars will be sold in Israel.  Israelis will be driving electric cars, but they will be very different than the heart thumping Tesla Roadster that goes from 0 to 60 in less than 4 seconds, or the bizarre little Meyers NmGs that are popping up around Redmond.  Agassi says, "We're not trying to build a cool car, but to end the dependence on oil."  Better Place will offer several Renault car models and subscription pricing packages and subsidize the car as part of their package.

Many of Agassi's colleagues from his previous life at SAP have joined him in what they describe as essentially a software company.  They're building a network that allows cars to tell the grid how much charge they are carrying and how much more they need. The grid needs to know where each car is and where to direct the driver to fill up. A thornier problem is the constant electronic negotiation with energy utilities (much of it solar) over how much power they can take, and when and where to do so.

BetterPlace

ERGO may not be ready roll out in the Americas just yet because of the large areas with low population densities. But Better Place estimates that the cost to develop this infrastructure in the U.S. is estimated at only about $500 per car. That seems low to me to get the US off of oil for transportation.  Plus, it means the creation of a new green job market that will stimulate the economy while freeing from the confines of a natural resource in decline.

As for Israel, where 90% of car owners drive less than 70 kilometers per day and all major urban centers are less than 150 kilometers apart, the plan has a good chance of success, particularly with strong backing from the government and the exorbitant cost of gas in Israel.  European counties will likely be next.  According to their Web site, Better Place is in active negotiations with approximately 25 countries, many of the major automakers and local partners in each target market.

Wired Magazine has a wonderfully in-depth article, Driven: Shai Agassi's Audacious Plan to Put Electric Cars on the Road.