Electric car group Better Place files for bankruptcy
Better Place, the electric car venture majority-owned by Idan Ofer’s Israel Corp, has filed for bankruptcy protection.
The company, once hailed as a visionary pioneer of battery-powered car networks, said on Sunday it had filed a motion with the district court in Lod, near Tel Aviv, to be dissolved and a temporary liquidator appointed.
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Better Place said in the motion that it was asking the court to protect its employees, customers and creditors “in light of its failure to raise additional funds and in the absence of sufficient resources for the continued operation of the business”.
“Despite significant efforts . . . revenues are still insufficient to cover operating costs, and in the light of the continued negative cash flow position, the board has decided that it has no option but to seek to make this application to the courts for an orderly liquidation of the company,” it said.
The group was founded in 2007 amid industry-wide enthusiasm for electric cars, prompted by rising oil prices and advances in lithium-ion battery technology.
Founded under the auspices of a World Economic Forum workshop by Shai Agassi, an Israeli-Californian former software executive, it raised almost $1bn from financial and venture-capital investors including HSBC and Morgan Stanley.
Better Place was given early support by Israeli president Shimon Peres – who spoke of electric cars’ ability to wean the country off Arab oil – and Carlos Ghosn, chief executive of Renault, which developed an electric version of its Fluence salon to supply Better Place’s car networks in Israel and Denmark.
The company’s business model rested on “battery swaps”, with electric cars’ depleted batteries being replaced by recharged units at switching stations.
Mr Agassi championed the idea as the only way of making electric cars deliver the same performance as conventional ones. The company launched trials in Australia, Hawaii and the San Francisco Bay area.
However, apart from Renault, other carmakers hesitated to endorse Mr Agassi’s battery-swap model. Better Place burnt through hundreds of millions of dollars of investors’ cash, but only managed sales in the low four digits. Across the car industry,sales of electric models launched since 2010 have been low because of their high cost and perceptions of limited performance.
Having staked his reputation on Better Place’s success, Mr Ofer, Israel’s richest man, subscribed to subsequent fundraising rounds as the business failed to take off.
He sacked Mr Agassi as chief executive last year, and the company has been through two other CEOs since.
“This is a very sad day for all of us,” Better Place’s board of directors said on Sunday. “We stand by the original vision as formulated by Mr Agassi of creating a green alternative that would lessen our dependence on highly polluting transportation technologies.”
However, the board added that realising the vision had proved “difficult, complex, and littered with obstacles, not all of which we were able to overcome”.
Dan Cohen, Better Place chief executive, said: “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.”
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