Palo Alto-based Better Place along with San Francisco Mayor Gavin Newsom, Oakland Mayor Ron Dellums and San Jose Mayor Chuck Reed announced the deal, which sets out to install charging stations in homes, businesses, parking lots and government buildings by 2012.
The company said it will also build mechanized battery swapping centres where robots will remove and replace the batteries in cars that are compatible with the system. These stations will allow electric car drivers to travel longer distances without recharging.
The initiative would make the Bay Area the first region in the U.S. to create an electric car network.
Gov. Arnold Schwarzenegger supported the deal, which the company hopes to someday take statewide.
"This type of public-private partnership is exactly what I envisioned when we created the first-ever low carbon fuel standard and when the state enacted the zero emissions vehicle program," Schwarzenegger said in statement. "This partnership is proof that by working together, we can achieve our goals of creating a healthier planet while boosting our economy at the same time."
The company also unveiled a prototype electric Nissan Rogue SUV, the second prototype developed under Better Place's partnership with automakers.
Better Place has already struck similar deals with Israel, Denmark and Australia to create electric vehicle infrastructure in those countries. The company models itself on mobile phone network providers like AT&T Inc. and compared its charging stations and battery swapping stations to cell phone towers.
"We put in the infrastructure, and the big carmakers make the electric cars for us," said Joe Paluska, the company's head of policy and communications.
"This is an opportunity for California to apply its strength in technology and innovation to Michigan's manufacturing might," he said. "We now need a strong national policy set by the new administration to help the U.S. revive its auto industry and it's economy."
Until now, the knock on most electric vehicles is that they were prohibitively expensive because the batteries cost $10,000 or more.
Paluska said the new prototype vehicles solve that problem Â– the replaceable batteries in the prototype cars would be owned by the company, not the consumer. But, like cell phone companies, Better Place would charge drivers a subscription fee to use its recharging facilities.
For their part, the mayors vowed to help streamline local permitting and regulations to hasten the installation of hookups in the region, and to provide incentives for local businesses to install charging outlets for employees.
"Our goal is to make the Bay Area Â– and eventually California Â– the electric-vehicle capital of the world," Newsom said.
Also at the announcement was environmental advocate Robert F. Kennedy Jr., who said the effort was "simple, elegant and genius" because it will provide a blueprint for the rest of the nation.
"If you do it in California, it's easier for me to go to Mayor Bloomberg in New York... (or leaders) in Washington, D.C., and say this is something we've got to do nationally."