Agassi became inspired to enter the electric car market at the World Economic Forum meeting three years ago, when he left software giant SAP.

Their biggest investor was HSBC, which took 10% of the company for a $125 million. Other investors included Morgan Stanley, as well as investors from the first round of financing, led by the Israel Corporation, which now has 30% of the company.

When asked how a company which has no revenues, hasn’t begun operating and has no proven business model, can round up that much worth from investors, Agassi said:

“The round indeed reflects a valuation of $1.25 billion, which is three to four times more than the valuation during our last round two years ago. … In terms of the speed with which the value was created – there haven’t been any companies like this. This is the largest investment since the crash in 2008 and the largest investment ever in clean-tech.”

Ok, but THAT kind of valuation?

“That’s a very interesting question. Look … we’re selling kilometers. The people selling kilometers until now were the oil companies.”

What’s selling kilometers? What does that mean?

“When you go to a gas station nowadays, you buy kilometers. It looks like a model whereby someone fills up the tank and pays, but ultimately, it’s a purchase of kilometers, 500 to 600 kilometers. It’s the same business, an energy distribution network, which is currently called oil companies or gas companies. The global kilometer market is currently worth $3 trillion a year, and [gas stations are] living on profit margins of 1% to 2%… Now, we’re buying the raw goods at a price that’s constantly decreasing … and we’re starting at very high profit margins, much more than 1%.”

Explain again about that valuation, what with no revenues and all?

“The total value of the Israeli kilometer market is about $10 billion. It’s being sold in servings of NIS 6.5 per liter – for us, the market share is 500,000 cars that get a lot of mileage – half of the distance traveled in Israel. These are leased cars, and the cars of people who drive 30,000 to 40,000 kilometers a year. That’s worth $5 billion …. We can get to that market share with profit margins of 40% to 50%.”

How do you get to profit margins of 40% to 50%? What about returning the investment, what about operations?

“I buy a battery and electricity, and I sell kilometers. On the way I’ve laid a lot of infrastructure in order to translate one into the other …. And my profit margins are constantly improving and eventually become very large because batteries keep getting cheaper and electricity keeps getting cheaper, while the price of a kilometer increases since there isn’t much cheap fuel left in the world.”

With Agassi’s plan, drivers will need to recharge every 150 kilometers – they’ll come to a recharging station, where a robot will remove the empty battery and insert a full one. The entire process takes two minutes, and most drivers won’t need to recharge more than once every two weeks.

When the project launches, hopefully in the second half of 2011, Israel will have 70 recharging stations. The infrastructure, that is the recharging stations, plus setting up chargers at customers’ homes, will cost the company $150 million. That being said, the company hopes to return the investment within 18 months.

It shouldn’t take more than 15 minutes to set up a charger at a customer’s house. Customers will not pay for electricity usage. They’ll pay a flat cost.

The charging stations will recognize cars based on a SIM-card-like device.

“The program that manages electricity consumption is amazing, because this is essentially the first time that cars will have a computer running Windows 7 inside them and a constant cellular Internet connection…This changes the complete driving experience. You can do things like navigation with other cars.”

Will the drivers like it? Will the masses get used to it?

“These changes happen in all fields. The large [car manufacturing] companies are looking at the changes and not moving. They’re like deer caught in the headlights. Look at the newspapers versus Google, look at pharma versus biotech, at the music industry.”

While the driver may lose due to the inconvenience of having to charge every 150 kilometers Plus, the up side is that electric cars will be less expensive: around NIS 100,000, he cites as an example, or NIS 20,000 to NIS 30,000 less than current car prices in Israel.

What is the word from Amdocs, Nice or Comverse?

“They see a decrease in costs, they see a fixed price for car maintenance. Remember that a year and a half ago, the price of gas suddenly jumped. And they also see a marketing opportunity for their company – an opportunity to be innovative leaders.”

And how will they sell it?

“First of all, the worker will benefit from the lower valuation of the car for income tax purposes.”

Agassi also said that Gas stations have no reason to fear the new business model – at this point, most of their revenues come from

“selling sandwiches and ice cream.”

If they become recharging stations, they shall maintain the traffic that powers their stores.

What about oil refineries? The company’s main investors are Sammy, Idan and Eyal Ofer. They also control the oil refinery in Haifa.

“Idan told me during our first meeting: ‘You told me that the days of the refineries are numbered, so why should I let someone else kill them? I want to be the person who kills them, because if this works, electric cars will be more profitable for me than refining oil.’”