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Report: Better Place to file for bankruptcy

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After around $850 million in funding and six years in existence, the electric car infrastructure startup Better Place is expected to file for bankruptcy within the next several days, Fortune reported Friday. The Israeli business journal Globes also reported yesterday that Better Place’s main investor Israel Corp had been mulling over whether Better Place will be able to continue its operations.

The Globes piece estimated that Better Place would need another four years and $500 million to reach break even. Better Place just raised $100 million back in November 2012, with much of it coming from Israel Corporation. Before that deal, Israel Corp owned about a third of the company and held a $160 million loss.

Better Place IsraelIf Better Place files for bankruptcy, it will be a sober end for a startup that was founded by the charismatic Shai Agassi in an attempt to get the world’s drivers off of gas-powered cars. Better Place’s business model was built around an electric car with a swappable battery, and the installation of both battery swap stations and battery chargers around a designated area. Customers pay for the electricity to charge the car via a subscription service (like cell phone minutes) and the electric cars themselves were supposed to be highly subsidized.

However, the plan took more money and more time than originally expected. The company aimed too broadly, and when it finally decided to highlight its flagship roll out in Israel, sales to Israeli customers were slow going. Better Place ousted its founder and CEO Agassi late last year, and shortly after that Agassi left the company. The company’s following CEO also left after three months.

Along with Israel Corp, Better Place has raised money from GE, UBS, VantagePoint Venture Partners, Lazard Asset Management, Morgan Stanley, Agassi himself, and others. Agassi told me in February of this year that he still believed in the business model of swappable batteries and subscriptions for electrons.

9 Responses to “Report: Better Place to file for bankruptcy”

  1. hymotion

    The battery swap idea was always a long shot. Car companies consider the battery to be core to their design. They were never going to be willing to standardize of a size/shape determined by Shai Agassi.

    I am stunned they were still about to raise money in 2011 and 2012. I thought this company ran out of gas years ago.

  2. Lynn Sidransky

    We were getting ready to buy a beter place car what does the bankruptcy mean for people who own cars . Will the battery service stations be kept operational ?

  3. Garry Golden

    This is why – despite all the hype associated w/ fuel cells — I have not left from basic assumption that the only viable business model for EVs is molecule-fuel based. There is a problem when you cannot make money off electricity that is too cheap to recover costs of plug-in infrastructure. That it only costs pennies to recharge my EV is a problem for the whole of the industry b/c you won’t find companies to bring infrastructure to market.
    Molecule fuels– dare we say it hydrogen (some Commenter insert flame here) — or H2 rich fuels are the only path. Fuel cell EVs are preferred by all engineering giant countries- Korea, Japan, Germany b/c of lower cost-to-mass; better performance; and better cost curve in long run (80% in MEAs; reduce Pt and you have cheap fuel conversion device). I loved Shai’s enthusiasm– but electrons are a cost. Fuels are a product. You can make money and refuel EVs. Will there be plug-in EVs in our future– of course (small form factors; fleets) but now can we move onto the end game. Fuel-based FCVs. Fuel cells are not dead. H2 is not a dead end. There is a biz model in fuels and fuel conversion which never existed — and cannot exist for plug-ins. :-)

  4. And yes, Tesla is going the way of Solyndra, Fisker and Better Place. To a better place that is. It’s only a matter of time. Just like with dotcom bubble and burst, what goes around, comes around.

  5. Albert Hartman

    In light of Fisker, Better Place, and all the other e-vehicle flameouts, Elon Musk’s achievements with Tesla are even more impressive.