The chicken-or-egg debate over electric cars and the public charging spots needed to power them is soon to be unscrambled in Hawaii.

Better Place of Palo Alto, Calif., said this week that it will build 10 public charging stations and roll out a small fleet of electric cars in Honolulu in early 2011. At the moment, there are no public charging stations for electric vehicles in the state, a step considered critical to creating a market for electric cars.

The project will be a joint effort with the Sheraton Waikiki Resort and Hawaiian Electric Co., which will operate an initial fleet of seven vehicles.

The charging stations will be based at the Sheraton, which will use two vehicles as guest shuttles, and at three HECO sites in Honolulu. The utility will use the remaining five vehicles.

The announcement comes almost two years after Better Place, which describes itself as an electric vehicle services provider, signed an agreement to work with Hawaiian Electric Co. on the infrastructure and energy needs to power public charging spots and battery-swapping stations.

The company’s ultimate goal is to have 50,000 to 100,000 charging spots in the islands by 2012 at a cost between $75 million and $100 million. The small-scale launch is expected to cost $1.1 million, with about $500,000 in funding from the U.S. Department of Energy.

“This project marks the beginning of our initial, pre-commercial infrastructure deployment in Hawaii,” Jason Wolf, vice president of North American operations, said in a statement. “It supports the state’s goal of leading the nation in renewable energy use, which Better Place will integrate into the grid via electric cars.”

Better Place does not make or sell electric cars, but instead builds infrastructure while working with car manufacturers, including French automaker Renault, to enable their vehicles to connect to Better Place’s system. Better Place would own the batteries needed to run the cars and lease them to drivers based on usage needs.

The pilot project in Honolulu will aim to measure vehicle performance, battery-charging metrics, the impact on the electrical grid, driver behavior and test the software systems that will manage the charging network. The Hawaii Natural Energy Institute at the University of Hawaii will be a research partner.

Better Place also will launch its first full-scale EV network in Israel in next year, where it plans to have 30,000 public charging stations. The company also is building a network in Denmark, where it has 55 public charging stations.

Other developments on the EV scene in Hawaii include the upcoming launch of several all-electric vehicles later this year, including the Nissan Leaf and Chevy Volt.

To encourage buy-in, a state rebate program and a federal tax credit — both funded by the American Recovery and Reinvestment Act — can together help knock off as much as $12,000 from the purchase price of qualifying electric vehicles.

Another player, Korean car manufacturer CT&T, plans to open a $50 million electric car plant on 30 acres in Kapolei by the end of next year. Hawaii is part of a major U.S. push by the company, which hopes to have 40 U.S. plants producing 300,000 vehicles annually by 2015.

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