Better Place files for liquidation

Better Place Ltd. said on May 26 that it has filed for liquidation, citing the lack of commercial success of a novel battery-switching system for electric cars that the Israeli company had developed in a partnership with French automotive group Renault SA.
The financial collapse of Better Place, 28%-held by shipping-to-fertilizer conglomerate Israel Corp., is a blow for Renault and its chief executive Carlos Ghosn who had championed the technology as one of the pillars of the French automaker’s ambitious €4 billion (US$ 5.25 billion) electric-vehicle strategy.
Founded by Israeli entrepreneur Shai Agassi in 2007, Better Place developed a system where electric-car owners could drive their vehicles to a network of stations around Israel and replace the car’s battery with a new one in about the same amount of time it takes to fill a gasoline tank on a regular car. The quick drop system was supposed to remove one of the main obstacles to the adoption of electric vehicles, namely the several hours it takes to recharge a flat battery.
Better Place raised around US$850 million from investors that included HSBC Holdings PLC, General Electric Co., Lazard Asset Management, Morgan Stanley, and VantagePoint Capital Partners as well as Israel Corp. The first cars equipped with Better Place technology were Renault Fluence ZE sedans.
In late 2012, Better Place said it had not sold as many cars as expected and said it would seek an additional investor. Around the same time, Agassi left the company. His successor, Evan Thornley, quit after two months. Earlier in May, Renault said it would not equip models other than the Fluence with the battery-swapping technology. The automaker’s first compact rechargeable electric car, the ZOE, has just gone on sale in France.
Better Place struggled partly because it only had a few dozen battery-switching stations in Israel and Denmark. The company abandoned projects in the U.S. and Australia while the specially adapted Fluence sedans were too large given the small-car preference of local consumers. The battery-switching system also could not be transposed to other vehicles. Better Place’s business model was based on car owners paying a fee according to the number of miles they drive, which Agassi likened to a mobile-phone subscription.
Better Place initially ordered 100,000 cars from Renault but the automaker has so far sold only around 2,500.
“Unfortunately, after a year’s commercial operation, it was clear to us that despite many satisfied customers, the wider public take up would not be sufficient and that the support from the car producers was not forthcoming,” said Dan Cohen, Better Place chief executive, in a statement.
Renault said it will continue to explore all charging technologies including quick drop. “This decision does not at all call into question the electric-vehicle strategy of the Renault-Nissan Alliance,” the company said in a statement.
(May 27, 2013)