When Shai Agassi launched his electric vehicle infrastructure venture, Project Better Place, he already had a whopping $200 million in commitments. According to media reports (via Globes, Reuters), Agassi just received another commitment for $30 million from Ofer Shipping Holdings.
Ofer is owned by Sammy and Idan Ofer and Udi Angel, and according to the Globe’s article this is a separate infusion from another investment that will be made by Ofer’s subsidiary Israel Corp. (ILCO). Israel Corp already decided to invest $100 million in the venture in exchange for 33.3% of the project. We contacted Project Better Place for more info on this fundraising and will update the story when we hear more.
Agassi’s Project Better Place will likely require even more capital than these hundreds of millions to build out the infrastructure for its battery-charging stations for electric vehicles. Infrastructure plays in any industry require an enormous amount of capital, especially in a green field business that involves partnerships with car and battery makers.
A lot of VCs and energy executives we’ve chatted with have been skeptical of the startup’s wildly ambitious plans, and doubts surround not only the sheer massive amount of capital the venture will take, but also the numerous country regulatory hurdles the startup will have to jump. And that’s not considering the fact that the venture is being led by a founder with little history in the energy or car industries. Shai Agassi was once expected to be the future leader of SAP.
Though if the plan can succeed it could be revolutionary. The sticking point of electric vehicles is their range per charge and immature battery technology. Project Better Place intends to offer the vehicle charging service to electric vehicle owners, the way mobile phone companies sell cell phone service. (Agassi even told the New York Times, “If you think of Tesla as the iPhone, we’re AT&T.”) Subscribers to the network would be able to get subsidized vehicles, but consumers would still own their cars.
WSJ says that the company would buy and own the batteries and that Agassi expects the subscription to be less than the economics for current gas-based cars. And the company says that over the next two years, it will build out the infrastructure and put hundreds of thousands of vehicles into its network. Over the next 10 years, the company hopes the system will be widespread. Good luck. (Be sure to check out Shai Agassi’s blog, too).