Green Wombat will be mostly off the grid in Australia, riding some waves and communing with the wombats, until January 14.

See you in the New Year.

photo: Think

Think Global, the innovative Norwegian electric car company, has temporarily halted production of its City urban runabout and laid off half its workforce as it considers a sale to survive the credit crisis, Think CEO Richard Canny told Green Wombat Tuesday.

“Think is in a situation where we can’t grow anymore,” Canny said from Think’s Oslo headquarters, where the management team was still working at midnight. “We have started an emergency shutdown to protect our capital and our brand. We’ll need a new and stronger partner, whether that is a 25% owner or a majority owner or someone who buys the company.”

The Norwegian government said on Tuesday that it would not make an equity investment in the automaker but is considering Think’s request to guarantee up to $29 million in short-term loans. “Even a small participation from the Norwegian government will give investors confidence,” Canny said, noting that the company needs to raise $40 million to continue manufacturing its electric car. “The financial crisis has hit at a very critical stage as we’re ramping up production and when external financing is hard to bring into the company and internal funding is limited.”

He said a rescue package might include aid from from the Norwegian government and an infusion of cash from new investors or strategic partners. “We’re putting a hand out. People who would like to work with us should pick up the phone.”

Ford (F) acquired the startup in 1999 and sold it a few years later. Norwegian solar entrepreneur Jan-Olaf Willums and other investors rescued Think from bankruptcy in 2006, aiming to upend a century-old automotive paradigm by changing the way cars are made, sold and driven to create a sustainable auto industry.

As Green Wombat wrote in a 2007 feature story on Think, “Taking a cue from Dell, the company will sell cars online, built to order. It will forgo showrooms and seed the market through car-sharing services like Zipcar. Every car will be Internet-and Wi-Fi-enabled, becoming, according to Willums, a rolling computer that can communicate wirelessly with its driver, other Think owners, and the power grid. In other words, it’s Web 2.0 on wheels. ‘We want to sell mobility,’ Willums says. ‘We don’t want to sell a thing called the Think.’

The company sells the car but leases the battery so buyers don’t have to fork over cash upfront for an electric vehicle’s single most expensive component - an idea subsequently adopted embraced by everyone from Shai Agassi’s Better Place electric car infrastructure company to General Motors (GM).

The failure of the new Think would be a blow at a time when the auto industry desperately needs to reinvent itself. While Think is a niche player and faces formidible competition as Toyota (TM)  and other big automakers go electric, it has pioneered  the idea of a new automotive infrastructure that includes tech companies and utilities like PG&E (PCG).

Whether Think can survive the global financial crisis remains to be seen, but Willums, who stepped aside as CEO recently but remains on the board, is a prodigious networker with deep contacts in Silicon Valley and elsewhere. In little more than a year he raised around $100 million from an A-list of U.S. and European investors that includes General Electric (GE), Keiner Perkins Caulfield & Byers and Rockport Capital Partners - the latter two marquee venture capital firms formed a joint venture with Think to sell the City in North America. Canny said the U.S. expansion plans are now on hold.

The question now is whether Think’s investors, absent a government bailout, will step up to save the company just as it has started to gain a foothold in the market. In a presentation made Monday, Canny, a Ford veteran, said eight to 10 two-seater City cars a day had been rolling off the company’s assembly line outside Oslo.  Think has a blacklog of 550 orders and 150 cars will be delivered by January.  The company was set to begin selling a 2+2 version of the City in mid-2009. (Think had planned to begin selling its next model, a five-seat crossover car called the Think Ox, in 2011.)

“There are limited possibilities of funding working capital through bank credits without extra guarantees in today’s financial market,” Canny said, noting that the company hopes to resume production in the first quarter of 2009. “Think’s automotive suppliers are severely hit by the overall industry crisis, leading to tougher terms of parts delivery to Think.”

Green Wombat will throw out one potential savior of Think: Google (GOOG). Many aspects of Think’s innovative business model were born at a brainstorming session that the search giant hosted in 2006 for Willums at the Googleplex in Mountain View, Calif. Given that Google.org, the company’s philanthropic arm, has poured tens of millions of dollars in green energy companies and electric car research, an investment in Think would be another way to drive progress toward its goal of a carbon-free economy.

Amid the daily drumbeat of mass layoffs, here’s some sunny news: Solar startup Suniva cut the ribbon Thursday on a photovoltaic cell factory outside Atlanta.

As solar factories go, Suniva’s plant - the first such facility in the Southeast - is relatively small, making 32 megawatts of solar cells annually until  production is fully ramped up to 175 megawatts in 2010. But the factory will create 100 green collar jobs and it follows the opening of  SolarWorld’s new solar cell fab outside Portland, Ore., that will  produce 500 megawatts’ worth of solar cells, and thin-film solar startup HelioVolt’s factory in Austin. Meanwhile, Solyndra, a Silicon Valley thin-film solar startup, is expanding its production facilities while Bay Area rival OptiSolar is building a Sacramento factory that will employ 1,000 workers to produce solar cells for the power plant the company is building for utility PG&E (PCG). (Leading thin-film solar company First Solar (FSLR) operates a factory in Ohio as well as plants in Malaysia.) But Chinese solar giant Suntech (STP) last week said it has put plans for U.S. factories on hold due to the credit crunch.

The Suniva grand opening comes on a good news-bad news day for the solar industry. On one hand, President-elect Barack Obama is expected to nominate alternative energy proponent and Nobel laureate Steven Chu, director of the Lawrence Berkeley National Laboratory, as Secretary of Energy. But the solar industry faces a tough year ahead. On Thursday, research firm New Energy Finance, echoing other analysts, predicted prices for polysilicon - the base material of conventional solar cells - would fall 30% in 2009. That’s bad news for conventional solar cell makers like SunPower (SPWRA) and Suntech if they’ve locked in silicon supplies at higher prices but provides an opening for further growth for thin-film solar companies that make solar cells that use little or no polysilicon.

“We expect to see significant drops in the price of modules next year,” wrote New Energy Finance CEO Michael Liebreich.  “Any manufacturer who does not have access to cheap silicon and who has not focused on manufacturing costs is going to be in trouble. The big shake-out is about to begin. The next two years will change the economics of PV electricity out of recognition.”

photo: Southern California Edison

While demand for solar panels is expected to continue to grow by double-digits in the years ahead, 2009 could be a make-or-break year for some companies, according to an analysis from HSBC Global Research.

After grappling with a shortage of polysilicon - the base material of conventional solar cells - for the past couple years, the industry now faces falling prices. The spot market for polysilicon has plummeted 35% since October, writes HSBC alternative energy analyst Christine Wang, who predicts prices will fall 30% next year.

That’s bad news for solar module makers who locked in long-term contracts at higher prices - which looked like a smart move when polysilicon was in short supply and prices rising rapidly. “The winners will likely be the companies with competitive cost structures, scale, good product  quality, strong balance sheets, and strong customer relationships,” according to Wang. “We believe that new entrants and small players will suffer the most as they lack brand recognition.”

The culprits are the usual suspects - the global financial crisis as well as some cutbacks in subsidies from countries like Spain. Solar cell companies that have rapidly ramped up production over the past two years now may be saddled with too many high-priced products.

Wang downgraded Chinese solar giant Suntech (STP) and set a price target of $4.50 - down sharply from HSBC’s earlier target of $55. Suntech was trading at near $10 Monday afternoon but still nearly 90% off its 2008 high.  (SunPower (SPWRA), First Solar (FSLR) and other solar cell makers have also seen their share prices nose-dive.) “High portion of polysilicon based on contract prices will hurt Suntech,” writes Wang, who estimated that 80% of Suntech’s polysilicon supply is locked into contracts “on less favorable fixed prices.”

Falling panel prices is good news for solar system installers like Sungevity and Akeena Solar (AKNS) and their residential and commercial customers. When Green Wombat ran into Akeena CEO Barry Cinnamon in San Francisco at the announcement of Better Place’s Bay Area electric car project, he said he was in no rush to enter into long-term contracts with solar cell suppliers as he expects prices will continue to fall in 2009.

Still, not all the news is gloomy for the industry. Wang expects that the financial crisis won’t derail government support for solar, given climate change pressures and state mandates to increase the use of renewable energy. The move by utilities like PG&E (PCG) and Southern California Edison (EIX) to sign long-term contracts for electricity from photovoltaic power plants will also keep demand high in coming years.

Wang projects solar cell demand will grow 45% between 2008 and 2012. “Developed countries are increasingly focused on environmental protection and curtailing the causes of climate change, and we do not believe this trend will shift just because of a (hopefully) short-term financial crisis,” she wrote.

The credit crunch is taking a toll on the United States’ nascent solar industry, scuttling big renewable energy projects and curtailing expansion plans, solar executives said Wednesday as they proposed the inclusion of green incentives in the Obama economic stimulus plan.

Spanish energy giant Abengoa, for instance, has put on hold plans to build its 280-megawatt Solana solar power plant outside Phoenix to supply electricity to utility Arizona Public Service (PNW) in a $4 billion deal, said Fred Morse, senior advisor to Abengoa Solar.

“We have serious issues getting financing,” said Morse during a conference call held by the Solar Energy Industries Association. Congress in October passed a 30% investment tax credit crucial to the solar industry. But Wall Street’s meltdown has scared off investors that normally would finance large solar projects in exchange for the tax credits.

“The investment tax credit was passed but unfortunately there was no ‘I’ in the ITC,” Morse added. “We have trouble finding tax-equity investors, the financing is gone.”

Suntech America president Roger Efird said that after Congress passed the investment tax credit, the Chinese solar cell maker immediately doubled its sales force in the U.S. That expansion has now hit a wall.

“Plans to double our sales force by the end of 2009 are currently on hold, primarily because business has slowed in fourth quarter because of the credit crunch,” he said. “We had been considering establishing manufacturing in the U.S. The timing of those plans depend on the growth of the market in the U.S. and how long it takes to get through this downturn.”  Suntech’s (STP) stock - like those of rivals SunPower (SPWRA) and First Solar (FSLR) - has been walloped by the market chaos and is down 94% from its 52-week high.

Ron Kenedi of Sharp Solar said the dealers and installers who buy the Japanese solar module maker’s products have had a hard time securing credit to finance their operations.

In response, the solar industry’s trade group on Wednesday proposed that the federal government cut through the credit crunch by adopting tax and investment policies to stimulate the solar sector and create 1 million jobs.

The centerpiece of the plan is a $10 billion program to install 4,000 megawatts of solar energy on federal buildings and at military installations. “The Department of Defense alone could jump start this industry and it could have widespread impact on the use of solar, similar to what it did for the Internet,” said Nancy Bacon, an executive with Michigan thin-film solar cell maker Energy Conversion Devices (ENER).

Bacon noted that the federal government is the world’s largest utility customer, spending $5.6 billion annually on electricity. “This would create 350,000 sustainable jobs,” she said. “The solar industry is ready to deploy these systems immediately.”

The Solar Energy Industries Association also wants Congress to enact a 30% tax refundable tax credit for the purchase of solar manufacturing equipment to encourage solar companies to build their factories in the U.S. That would result in an estimated 315,000 new jobs. Making the current investment tax credit refundable would also help loosen up financing for solar projects, the association said.

Other policies on the SEIA agenda:

• Establishment of a national Renewable Portfolio Standard that would require states to obtain a minimum of 10% of their electricity from green sources by 2012 and 25% by 2025, with 30% of the total coming from solar.
• Rapid deployment of new transmission lines to connect cities to remote areas where wind and solar power is typically produced.
• Expedited approval of solar power plant projects on federal land in the Southwest.
• Creation of an Office of Renewable Energy in President-elect Obama’s office to coordinate the procurement and permitting of solar power and transmission lines.

“We are working closely with the Obama energy transition team and have been in contact with Congress,” said SEIA president Rhone Resch. “These polices are exactly the kind of shot in the arm our economy needs today.”

photo: Better Place

Silicon Valley startup Better Place on Tuesday announced a deal with Hawaii’s governor and the state’s biggest utility to build an electric car charging network throughout the islands.

The agreement comes less than two weeks after Better Place CEO Shai Agassi and the mayors of Northern California’s three largest cities unveiled a plan to build an electric car infrastructure for the San Francisco Bay Area. Better Place also has signed similar deals with governments in Australia, Denmark and Israel.

Agassi said the network of charging posts and battery swapping stations will be ready by 2012. That’s roughly the target date for Better Place’s other projects, which means the year-old startup will be simultaneously building electric car networks in four countries while raising billions of dollars in project finance.

Renault-Nissan will supply electric cars for the network. Better Place will own the car batteries and charge drivers for the miles (or kilometers) driven. By removing the battery from the purchase price of electric cars - the most expensive component - Better Place hopes to sell vehicles at prices competitive with their fossil-fueled counterparts.

Appearing with Agassi at a press conference at the capitol in Honolulu, Hawaii Governor Linda Lingle said the Better Place partnership offers the state the opportunity to slash the $7 billion it spends annually on imported oil and provide a market for renewable energy. Hawaiians pay some of the highest gasoline prices in the U.S. and the state has set a goal of obtaining 70% of its energy from solar, wind and other renewable sources by 2030.

“It’s not a simple goal - we’re looking to end our dependence on oil,” said Agassi, who shed his customary dark suit for a gray polo shirt and wore a lei. “Any form of renewable energy - wind, solar, geothermal - is here in Hawaii.”

“This will be the blueprint where six or seven million visitors will come and experience first-hand what it’s like to drive an electric car,” added Agassi, 40, a former top executive at business software giant SAP. “You couldn’t ask for a better advertisement.”

Utility Hawaiian Electric (HE), which supplies 95% of the state’s power, will generate renewable electricity equal to what the Better Place network consumes and work with the company on developing the charging infrastructure.

“The price of oil is irrelevant to us - we have to reach a clean and secure energy future,” Lingle said.

Better Place’s latest deal came on the same day that General Motors (GM) and Ford, which have asked for a multi billion-dollar bailout from Congress, (F) announced plans ramp up production of hybrid and electric cars.

“It’s a win-win-win - the only loser in the equation is oil and that’s ok,” said Hawaiian Electric executive vice president Robbie Alm. “Green cars will provide the market for renewable energy.”

Photo: SolarWorld

When Green Wombat met with SolarWorld COO Boris Klebensberger last month, he noted that the German solar cell maker opened for business in 1998 just as oil prices hit an all-time low. “The company was founded by five crazy guys who people thought were on drugs, ” he laughed.

They still might. SolarWorld, now the world’s fifth-largest solar module manufacturer, has made an unsolicited $1.3 billion offer to buy General Motors’ German-based Opel division. And why would a renewable energy company want to get into a fossil fuel-dependent business? To build green cars, of course.

“The automotive industry is down a deep well and when you’re in a deep well you have to find a new product for the future,” SolarWorld CEO Frank Asbeck told Green Wombat as he was getting out of taxi Wednesday in Rome to attend the dedication of a SolarWorld solar array at the Vatican. “The next cycle will be renewable energy. The switch will be from automotive to electromotive, or as we call it, sunmotive.”

If the Pope can go green, why not another tradition-bound global institution?

If SolarWorld’s bid seems comically low for a century-old automotive powerhouse, consider this: As of Wednesday morning General Motors’ (GM) total market capitalization stood at $2.2 billion. That’s not a typo — Sergey Brin and Larry Page probably have that much rattling around the change drawers of their Priuses (TM). SolarWorld’s market cap, in contrast, is $1.6 billion.

The SolarWorld bid does come with a rather large catch, however. The company wants GM to make compensation payments of 40,000 euros (about $51,500) per Opel worker for a total of 1 billion euros ($1.3 billion) — what the automaker would have to shell out under German law if it shut down. Opel has been something of a jewel in GM’s crown, but it has suffered from its parent’s mistakes and now Opel executives themselves are asking the German government for a billion-dollar bailout.

GM has dismissed the SolarWorld bid out of hand while some financial analysts called the offer a PR stunt. If it was a joke, it’s been a costly one: the company’s shares initially plunged 19% after Jefferies questioned management’s credibility and downgraded its stock.

“We’re not making jokes,” Asbeck says. “We say we’ll give a billion and General Motors gives a billion. We are strong enough in renewable energy to give scale to old fossil fuel industry.”

While SolarWorld has no plans to make a sun-powered car like the experimental racer (pictured above) it built, Asbeck says the company would retool Opel to increase production of green cars by 5% each year, transitioning from plug-in electric hybrids like the Chevy Volt to all-electric vehicles. “We think extended range cars are the car for the next five years,” he says, noting that Opel management would be left in place but given a new mission.

SolarWorld’s chances of acquiring Opel might appear slim, but Asbeck’s strategy is sober. Just witness Silicon Valley startup Better Place’s success at signing deals with the governments of Israel, Denmark, Australia and California to build an electric car infrastructure and its alliance with Renault-Nissan to produce battery-powered vehicles. Even Ford (F) executive chairman Bill Ford has been developing a green strategy for the auto industry, according to The New York Times.

“I think that times have changed and we as a solar company can export our spirit of building a new industry,” says Asbeck. “Opel can be the first green car company in Germany.”

In case you missed it, this Green Wombat story appears in the current issue of Fortune.

A house that thinks

The high-tech networks that Reliant Energy is installing in the homes of its 1.8 million customers will help them save electricity.

By Todd Woody, senior editor

(Fortune Magazine) — Inside a white-brick house nestled in Houston’s leafy Montrose neighborhood, a gray handheld video display sits on the living room coffee table. But this is no ordinary remote control. Called the Insight and made by Tendril, a Boulder startup, the device communicates wirelessly with the home’s utility meter, letting you track real-time information about the cost of the electricity you consume.

The house is actually a demonstration project set up by Reliant Energy (RRI), a reseller of electricity with $12 billion a year in sales. Glen Stancil, Reliant’s vice president for smart energy R&D, taps the Insight’s screen. “Right now we’re spending $1.40 per hour,” he says, noting that the electricity prices and usage are updated every ten seconds. (Customers can also access the same data on the web or their iPhones.)

Stancil presses another button. “The bill so far is $86, and for the month it looks like it’s headed to $367,” he says. The Insight system also warns that you’ll fork over another $100 this month if you crank up the air conditioner a couple of notches. So keep your hands off the thermostat.

That’s just the kind of behavior that Reliant Energy CEO Mark Jacobs would like to see. Until now, Reliant has made its money by entering contracts with utilities for a fixed amount of power at a fixed price and then reselling it to its 1.8 million customers. If demand unexpectedly soars on a hot afternoon as everyone turns up the air conditioning, Reliant often must buy extra power on the spot market, where prices can spike as much as 60%.

That cuts into profits. “It’s like running a beachfront hotel, charging the same room rate all year round, and then building more rooms to guarantee that everyone has a room on the busiest weekends,” says Jacobs.

In November, Reliant started installing the Insight in homes, which means it will be able to pass along those high spot prices to its customers, or better yet, in sweltering Texas, let customers buy a month’s worth of cool at a set price - say, 72 degrees for $200 or 74 degrees for $160.

The Insight offers another advantage - Jacobs believes it will encourage his customers to cut back on electric use and save money. “What if you knew you could run your clothes dryer at five o’clock, and it would cost $3,” says Jacobs, “or you could wait until eight o’clock at night, and it would be only a dollar?”

PG&E (PCG), Southern Edison International (EIX) and other utilities are rolling out smart meters but have yet to to integrate them with smart energy systems for the home. But Reliant operates in a competitive, deregulated electricity market. If homeowners get cool technology that helps them avoid the unpleasant surprise of a big electric bill, Jacobs believes Reliant will retain more customers. And then there’s the green angle. “We as an industry are the single largest emitter of greenhouse gas, and our goal is to help our customers use less, spend less, and emit less,” says Jacobs.

For Jacobs, a 46-year-old Goldman Sachs (GS) veteran, smart energy technology is just the wedge to shake up what he calls “an industry in the Dark Ages” while opening new markets for his company, whose stock has been walloped by the one-two punch of Houston’s Hurricane Ike and the credit crunch.

Hurdles, however, remain. Will consumers already suffering from information overload want to obsessively monitor their electricity habit? Will a sweating Houstonite on a 104-degree day say to hell with the cost and crank up the AC anyway? Jacobs isn’t worried. He believes nothing influences behavior better than knowing the true price of what you’re buying.

Electric cars are as good for the economy as the environment and could put $80 billion in consumers’ pockets by 2030, according to a new study from the University of California.

Not surprisingly, the oil industry would take a $175 billion hit under the scenario sketched by UC Berkeley’s Global Venture Lab, while a booming battery business would gain $130 billion as the internal combustion engine sputters out. “There will also be significant changes in the balance of payments among nations as petroleum imports decline,” the authors wrote. “We find the net imports of the U.S. will decline by $20 billion.”

The report makes several assumptions to arrive at its optimistic conclusions: The Cal researchers are counting on 39% of cars on the road to be electric by 2030 and powered by electricity generated from renewable sources like wind and solar.

Electric car owners would save an estimated $7,203 in operating costs, mainly because with no engines to maintain, battery-powered vehicles rarely see the inside of mechanic’s garage.

Left unexplored in the report was the impact of electric cars on the United States auto industry. If General Motors (GM), Ford (F) and Chrysler survive - and that’s a big if these days - they stand to benefit assuming they retool for the electric age and produce cars consumers want to buy before rivals like Toyota (TM), Honda (HMC) and Renault-Nissan beat them to the punch. But their dealer networks are sure to suffer once their lucrative repair and maintenance business evaporates.

Another winner in the electric car economy will be solar and wind companies and utilities, particularly those like PG&E (PCG) and Southern California Edison (EIX) that are making multi billion-dollar investments in renewable energy.

One of the biggest assumption the Cal report makes involves the rise of a U.S. battery industry. “We don’t have a battery industry today,” said Shai Agassi, CEO of electric car infrastructure startup Better Place, on Friday at a panel Green Wombat moderated for the University of California’s Global Technology Leaders Conference. “Either we make them here or they’re going to be made in China.”

Agassi and the mayors of San Francisco, San Jose and Oakland on Friday announced that Better Place would build a $1 billion network of charging stations throughout the Bay Area. Renault-Nissan has agreen to provide Better Place with the hundreds of thousands of electric cars it’ll need to put on the road make its business model profitable.

photo: Better Place

Photo: Better Place/Acey Harper

SAN FRANCISCO - It was a day when the shift from the past to the future was almost palpable.

It started Thursday morning in Berkeley where Green Wombat was moderating a panel of tech luminaries gathered at the University of California’s Global Technology Leaders Conference. As Shai Agassi, founder of electric car infrastructure company Better Place, makes the case for harnessing Silicon Valley’s technological innovation to Detroit’s manufacturing might to create a sustainable car industry, dispatches from the automotive apocalypse roll down my BlackBerry: Ford (F) shares sink to $1.01…GM’s (GM) stock falls to its lowest level since World War II…U.S. automakers beg for a bailout…California Congressman Henry Waxman ousts Michigan’s John Dingell — the Duke of Detroit — from his 28-year chairmanship of the powerful House Energy and Commerce Committee.

Agassi slips out of the conference and an hour later I catch up with him across the Bay at San Francisco City Hall where he and representatives of Governor Arnold Schwarzenegger and the mayors of San Francisco, San Jose and Oakland announce a $1 billion project to build a regional network of electric car charging stations. Better Place has signed similar deals with governments in Israel, Denmark and Australia, but California is the company’s first foray into the U.S. market. Planning for the Bay Area network begins in 2009 with construction scheduled to start in 2010 and commercial rollout set for 2012.

The mood is ebullient. “This is the start of a regional effort to become the capital of electric vehicles in the United States,” proclaims San Francisco Mayor Gavin Newsom before an audience that includes representatives from state and federal environmental agencies, green groups. Silicon Valley business leaders and officials from GM and Toyota (TM).

For his part, Agassi says, ” We believe this is not just a model for California, but a blueprint for the United States.”

The blueprint works like this: The mayors of the Bay Area’s three largest cities agreed to expedite permitting and installation of electric car charging stations, standardize regional regulations to promote an electric car infrastructure and offer incentives to employers to install chargers at workplaces. The mayors also agreed to pool purchases of municipal electric car fleets.

Better Place will raise the capital to install thousands of charging spots on the streets of San Francisco, San Jose and Oakland as well as stations between California cities where drivers can swap depleted batteries for fresh ones when they make longer trips. The Palo Alto-based company will own the car batteries and charge drivers for the miles driven. Automaker Renault-Nissan is developing electric cars for the Better Place network.

The big idea: Only by building an electric car infrastructure first will automakers produce the tens of millions of electric cars needed to make a significant dent in greenhouse gas emissions and the nation’s dependence on foreign oil.

That business model elicited some skepticism earlier in the day at the Berkeley conference, where Michael Marks, former CEO of electric carmaker Tesla Motors, questioned Agassi’s claim that Better Place would be able to provide electric cars that cost no more than gasoline-powered vehicles. And Jim Davidson, co-founder of Silicon Valley private equity firm Silver Lake, asked if Better Place would essentially be tapping the power grid to create a monopoly. (No, Agassi said, the Better Place network would be open to all electric cars.)

When Green Wombat sat down with Agassi and Newsom in the mayor’s offices Thursday afternoon, I asked Agassi, who brings a charismatic messianism to his mission, how Better Place would raise the billions needed to roll out an electric car infrastructure in California amid a global economic meltdown. He noted that in Australia Better Place signed up investment giant Macquarie Bank to create an infrastructure fund to finance that project while in Denmark a utility will provide financing.

“We will do the same thing here; we’re working with Morgan Stanley (MS) and Goldman Sachs (GS),” Agassi says, recounting a conversation he recently had with investors who he said were eager to put money in Better Place projects.

If anything, Newsom, 41, and Agassi, 40, and their allies regard the confluence of the financial crisis, the great Detroit car crash and the consolidation of green power in the incoming Obama administration and Congress as a once-in-a-lifetime opportunity to launch a disruptive technology on a global scale and transform the U.S. automotive industry.

“We’re uniquely positioned in that our local representative is Speaker of the House,” notes Newsom, referring to his close political ally, San Francisco Democrat Nancy Pelosi, who on Thursday sent a message of support for the Better Place initiative. “That can elevate what we’re trying to achieve out here.”

There’s no doubt that Newsom has a knack for game-changing politics. (He launched the gay marriage movement in these offices.) But the nuts and bolts of getting the bureaucracy to fall in line will be a harder challenge, as anyone who has ever tried to get a permit to do a home renovation in San Francisco can tell you. And not all of San Francisco’s collaborations with Silicon Valley tech companies have gone well — witness the collapse of the citywide Wi-Fi initiative Newsom undertook with Google (GOOG).

Agassi hesitated when I asked about plans to extend the Bay Area electric car network to the rest of California, noting that negotiating agreements with the nearly 100 municipalities that make up Greater Los Angeles poses a challenge. “I got a call the other day from the mayor of L.A. asking where are we,” Agassi says. “We hope to eventually make it an electric charging corridor from California to Seattle to Vancouver.”

On Thursday, Agassi and the politicians took pains to paint the Better Place initiative as not a California versus Michigan thing, or new economy versus old. And they just may be right. For in a strange way, by building an electric car infrastructure, California is offering Detroit a rescue package of its own: Supplying the network lays the groundwork for the mass production of electric cars that could be the auto industry’s salvation.

That may be counter to conventional wisdom, but perhaps Robert F. Kennedy Jr., environmentalist and advisor to Silicon Valley’s VantagePoint Venture Partners - a Better Place investor - put it best on Thursday at the press event when he upended the East Coast view of the Golden State: “When you come to California, you find people in touch with reality.”