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Better place files for bankruptcy

Better place files for bankruptcy

Better Place, the visonary electric vehicle venture owned by Idan Ofer's Israel Corp has filed for bankruptcy protection. The company had pioneered the development of a network of battery swopping stations, and the collapse is a major set back for the development of electric vehicles around the world.

The company was formed in 2007 by Israeli entrepeneur Shai Agassi, who came up with the plan to model the market for electric vehicles based on swapping of batteries in a network of stations, not dissimilar to car washes. The idea was the result of a challenge by President Shimon Peres to a number of entrepeneurs to come up with a solution to make the world a 'better place' and intended to stimulate the demand for electric vehicles as the world's motorists seemed reluctant to take the plunge.

Agassi's groundbreaking idea was to disassociate the cost of the battery from the captial cost of the vehicle. His point was that when a buyer purchased a traditional vehicle, the fuel is then purchased when required, whereas the cost of a traditional EV included the cost of the battery which is an expensive item ( the incremental cost of electricity is much lower than the cost of petrol or diesel). The idea was to base the charging for EV fuel on the mobile phone market - ie a contract is entered into whereby the user pays at the end of the month for the amount of miles used rather than minutes.

The idea of the swapping station was the solution to the main problem faced by current EV's the limited range of current Ii-ion batteries. As the current range of most vehicles is around 100 miles, most  EVs are only really of use for short commuter journies where a recharge can be conducted before the return journey is made. As there is a shortage of charging posts, and the time taken to recharge would interrupt most long distance journies, the Better Place solution of a quick visit to a swapping station seemed to be a direct comparison with a visit to a petrol station.

The firm raised almost $1billion from financial and venture capital partners including HSBC and Morgan Stanley. Early support was given from Renault , who developed an electric version of it's Fluence salon to supply the Better Place networks in Israel and Denmark. Further trials have also been conducted in Australia, Hawaii and in the San Francisco bay area.

Mr Ofer subsribed to subsequent fundraisings as Better Place burnt through the intitial funds at an alarming rate. Shai Agassi was sacked as chief executive last year. So far 27 switching stations have been build in Israel, the problem has been the shortage of cars that have been sold to take up the offer. Only 500 have been sold in Israel, rather than the 40,000 that were predicted by now. Many people are reluctant to be the guinea pig or sucker - the Yiddish word being used in some places is 'Frier' or chump!

Agassi predicted that $10 billion would be transferred from one industry to another within a generation, and Israel was an ideal place for the green revolution to begin as the country leads the world in the development of many renewable technologies. 

Installing a grid of switching stations, and creating a demand for 100,000 custom built Renaults was audacious and costly. it is to be hoped that the business can be restructured allowing the networks in Israel and Denmark to be fully exploited, as this business really was a 'game changer', one that could have transformed the word's dependence on fossil fuels and it's failure is a sad day for those who believe in the growth of low carbon transport around the world. 

Click here for earlier articles on Better Place including video clips of the first switching station in Israel.

For any advice and assistance for issues like these please do call Jeremy on 0844 2722322 or submit a comment below. Jeremy will come back to you at the earliest convenience.

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