From software exec to electric car revolutionary: Exclusive interview with Shai Agassi

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Shai Agassi has a record of accomplishing huge tasks in record time — from completing his college degree by 18 to founding several successful software companies before 30. In recent years, he has shifted his intense focus to the global problem of climate change.

He discusses his blow-by-blow plan to propagate the electric car in today’s TED Talk. It’s a remarkable move for a highly successful young businessman, and in this interview with the TED Blog he explains how his country and his children, with a little help from TED, pushed him to try to change the world.

Here’s an excerpt:

“The first week my wife and I went to Costa Rica, and the second week to my first TED. I was awed and inspired by what I saw on stage. I sat back and watched 50-odd people, and 1,000 others in the crowd, applying themselves to serve humanity. When I came out of that TED, I knew for sure what I had to do. I wanted to be one of those people.”

Below, our full interview:

Could you begin by talking a little about your personal journey — from a highly successful software entrepreneur to founding Better Place with a vision of clean energy?

This was at a time in my life when I was at SAP and asked to be president if I should want it. While I was considering this, I was invited to join the World Economic Forum’s Young Global Leaders where they asked us all to come up with a project or a vision for how we want make the world better by 2020. I took it really seriously. I began to think, “What do I do best? What are my passions? And where do these meet to create economic interest?” Basically, I was using Jim Collins’ theory from “Good to Great.”

My passions were an intersection between peace in the Middle East and climate change. I know how to understand a technology problem, break it into its components and solve it. I also knew I couldn’t make peace solely through technological inventions. So, I started digging and found that Israel signed a peace treaty with the United Arab Emirates after the country had diversified their economy, instead of being solely oil-based. This diversification had brought about modernization. I realized that if you land the price of oil, countries will diversify their economies and as a result, modernize.

When I started this, I asked “How would a country operate without oil?” So, I began thinking from scale. I looked at biofuels, and they don’t scale. I looked at hydrogen, and discovered that it’s actually a wasteful process and not clean. Then I got to electric vehicles. I wrote a white paper on it, expecting that this would become a project for government.

But, while I was still working for SAP, I met Shimon Peres — the President of Israel — in D.C. in 2006. He invited me to come to Israel and present my ideas. When I went there and met with Ehud Olmert, the Prime Minister at the time, he sort of challenged me and said, “Find the money, fund your own company and we’ll let you implement it.” I decided to quit SAP and start this idea that was originally written for a government agency. Olmert told me that governments just didn’t do these kinds of big things.

And, you know, you’ve got to pay you dues to your past and your future. Israel is my past. My two boys are my future. I realized that I needed to do something for my future when I went to see Al Gore’s presentation.

What do you think about the Tata Nano? Do you see an cheap, oil-fueled automobile like this as a possible detractor or distraction from your plan?

I’ve actually spoken to Ratan Tata about why he wanted to do it, and I think his motivation was right. I find him similar to Henry Ford in his desire to increase social mobility by creating an affordable vehicle.

For the kid working in a call center, making two to three thousand dollars, they might be able to save about three or four hundred dollars a month. When they decide what they are saving for, their first thought is not to buy a dishwasher. Their first aspirational appliance or big purchase is a car.

As a result of this, we will also see India become a dominant force in the industry. This will begin a interesting shift, forcing companies to come down in the price of the shell of the car. Once the Tata car has set its manufacturing price at $2,000, most car companies will need to get their lowest end models down to about $5,500 in order to compete.

There’s an interesting effect on our plan as well. Extending the cost of the battery over time will subsidize the cost of each car, but what about used car buyers — people who can’t afford to buy a new car? They still might not be able to afford the car, with the subsidy. However, if the entire cost of the car goes down, it may be possible to subsidize the full cost of the car. Ratan Tata has enabled a transition, by creating a prototype for a cheaper car structure — for cheaper wrapping.

How long are the entire life cycles of the batteries? What happens when they no longer hold a charge?

With today’s lithium-ion batteries, 10 percent of the cost is in the chemicals and 30 percent of the cost is the energy required to make them. So, in order to prolong the life of the battery we need to conserve the components and the energy used to make them.

Now, remember the battery is no longer bound by the life of the car. We can also extend the battery’s original visible range. Usually, when a battery is at 80 percent of its original capability, it’s considered dead. We said, “That doesn’t make any sense.” Instead, when the battery has gone 90 miles or so, we might take it to a different geography where it could have a second life — for example, Hawaii, where people can’t travel long distances.You will see much longer cycles in general, after which the batteries will be used as static storage devices.

So we’re trying to extract as many miles as we can and then recycle the resources of each battery.

As batteries become fuel, is lithium the new oil? Will a country like Belize with large deposits see an economic upswing with your plans?

Well there are three things wrong with comparing lithium to oil. The first of these is that you don’t burn lithium. The aggregate sum of lithium remains the same. Then, remember that it takes 100 million years and great pressure to get living creatures at the bottom of the ocean to create the correct opportunities to produce oil. And, of course, you can’t really reuse carbon once you’ve burned it.

Lithium can also be found democratically. There are large deposits in places like Belize, but really there are sufficient deposits in a number of places. The cost of extraction is also lower and it is relatively easy to extract.

So, this is why we must be careful with the comparison. Lithium is actually the 35th most common element on Earth, with a much better extraction process than oil.

As someone with a vested interest in finding the most efficient forms of renewable energy, what did you think of Saul Griffith’s high-flying kites to harvest wind energy?

I thought the talk was very cool. I have no real idea of how practical it is, but I do hope that Saul’s right.

Now, all energy in this world comes from the sun, with the exception of that produced by the moon. So, the first order of magnitude is solar energy. There are eight terawatts of photons hitting the surface of the Earth, not counting the oceans. Saul says there are 1.2 terawatts of wind energy, which is not a small amount but there is a difference.

Wind is the first derivative of the sun — the effect of molecules moving from hot places to cold places. The next derivative is waves — those that result from wind on water. Each derivative down results in a reduction of the original amount of solar energy. All forms of energy have their place, but the others are pretty far from mass commercial use.

Solar panels are no longer affected by scientific problems. The problems are in the mechanics and installation — the cleaning, the positioning. Solar is still bound to become the most prevalent renewable energy source in the years to come.

Are you excited about your TEDTalk going online? And what was your experience of TED?

Well, actually I have a small TED story. When I was making my decision to leave SAP, I quit for the first time in January, 2007. But, I was sent back home to think about it. Basically, my resignation was not accepted. I tried to quit again after that, and I was offered another two-week vacation.

The first week my wife and I went to Costa Rica, and the second week to my first TED. I was awed and inspired by what I saw on stage. I sat back and watched 50-odd people and 1,000 others in the crowd applying themselves to serve humanity. When I came out of that TED, I knew for sure what I had to do. I wanted to be one of those people.

When I came back in 2009, my experience was very different. I was no longer anonymous. Not only was I on stage, but I have one of those last names that puts you at the front of every program, so everybody seemed to know my name. Everybody wanted to talk me about Better Place. Both experiences were fantastic.

You started college at 15, finished at 18, went on to be a hugely successful software entrepreneur and it’s said that you raised millions of dollars in record-breaking time to begin Better Place. How do you do all this? Do you sleep?

Well, I sleep — but not a lot. I’ve been blessed. I started at a young age. When I was young, my dad was in school, so I was surrounded by students and learning. I was further blessed to go to college at 15 and graduate at 18. My goal then was to make enough money by 30 that I would never have to work again.

When I sold my first company at 30, I could have done whatever I wanted to do. Then everything was different, because I didn’t care if things worked or not. SAP was a dream — the problem came when the Better Place question hit me. There are very few people who get to have their kid dream, stop, and then go serve the world while they still have the stamina to get on and off planes constantly. If I get to solve one problem in the world, then it probably is a better place.