Electric Car Company Folds After Taking $850 Million From GE And Others
REUTERS/Nir Elias
A Better Place car.
JERUSALEM (AP) — Israel's trailblazing electric car company Better Place announced Sunday that it is shutting down, less than six years after unveiling an ambitious plan that promised to revolutionize the auto industry by reducing the world's dependency on oil.
Better Place was perhaps Israel's best known clean-tech company and a leading symbol of its "startup" nation status. Israel, along with Denmark, was the company's test market for developing nationwide networks of charging and battery-swapping stations that it hoped would eventually spread globally. But the company experienced repeated delays in getting off the ground and experienced weak demand for its cars after burning through millions of dollars.
The announcement that the company was filing for liquidation comes less than eight months after company founder Shai Agassi was forced out. The project won the support of Israeli President Shimon Peres, received generous financial incentives from the Israeli government and made Agassi a dynamic celebrity CEO.
The company's vision of drastically reducing oil dependence, cutting carbon emissions and blazing a trail for more environmentally friendly means of transportation won it worldwide praise and high-profile endorsements from people such as former President Bill Clinton. But it also faced skepticism from industry insiders who warned of technical pitfalls, such as limited battery range.
In a written statement, the company's Board of Directors said the venture's intentions were still valid but the execution had faults along the way.
"This is a very sad day for all of us. We stand by the original vision as formulated by Shai Agassi of creating a green alternative that would lessen our dependence on highly polluting transportation technologies," the company said. "Unfortunately, the path to realizing that vision was difficult, complex and littered with obstacles, not all of which we were able to overcome."
When reached by The Associated Press, Agassi refused comment Sunday.
Better Place raised some $850 million from investors like General Electric Co. and HSBC Holdings PLC and the European Investment Bank. Israel Corp., controlled by billionaire Idan Ofer, was the largest shareholder in the venture.
In Israel and Denmark, the networks are almost complete, while the company also has operations in Australia, the Netherlands, China, Hawaii and Japan.
Israel was a particularly ideal laboratory, thanks to high fuel prices, a supportive government and its dense population centers. In Israel, 90 percent of car owners drive less than 45 miles, or about 70 kilometers, per day and all major urban centers are less than 100 miles apart, making the use of battery operated cars more feasible than in countries with longer average commutes.
For people making longer trips, the country was dotted with several dozen mechanized battery-swapping stations, where a new battery could be placed in the vehicle in just a few minutes. Green cars were also particularly attractive to Israel, which hopes to weaken the political clout of its oil-rich enemies.
But fewer than 1,000 cars made it on to the road and the company's distinctive charging stations remained largely empty. French automaker Renault has sold a sedan, the Fluence, which was customized to use the stations and was priced in Israel at roughly $32,000, on par with other sedans.
In its motion to court Sunday, Better Place said it was seeking the appointment of a temporary liquidator. In light of its failure to raise additional funds, the company asked for the court's assistance in protecting the rights of its employees, customers and creditors.
"From the start, Better Place was a breakthrough for the infrastructure of the electric car industry and successfully completed the development of its technology and infrastructure. Israel was the first place in which an electrical car could travel without limit," said CEO Dan Cohen. "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."
Copyright (2013) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Associated Press text, photo, graphic, audio and/or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. Neither these AP materials nor any portion thereof may be stored in a computer except for personal and non-commercial use. Users may not download or reproduce a substantial portion of the AP material found on this web site. AP will not be held liable for any delays, inaccuracies, errors or omissions therefrom or in the transmission or delivery of all or any part thereof or for any damages arising from any of the foregoing.
More From Business Insider
