Once the very symbol of Israeli green innovation, the Better Place electric car company filed for bankruptcy on Sunday, asking the Lod District Court to dissolve it.
“Despite significant efforts,” the firm announced, “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.”
“This is a difficult day for all of us,” Better Place CEO Dan Cohen said.
Despite its innovative vision and accomplishments, he said, the latest, unsuccessful round of fund-raising left the company financially unviable.
“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,” Cohen said.
The announcement spells uncertainty for Better Place car owners, who bet on the company’s continued operation to provide electric infrastructure for their cars. Without battery switch stations, the cars will be limited to about 120 km. before needing to be plugged in.
It will be up to the courts and the liquidation team to determine how to compensate them, a task complicated by the fact that some purchased four years of kilometers for their car batteries ahead of time, while others bought them on a pay-as-you-go basis; some purchased their cars, others had them on lease.
Founded by former SAP executive Shai Agassi in 2007, Better Place captured global attention with its vision for making electric cars viable by building a battery-swapping infrastructure to rival standard gas stations. It had plans to launch in Australia, Japan, China, Europe and the US.
With Agassi’s inspirational vision touted on TED (Technology, Entertainment, Design) talks internationally and a vaunted place in Start- Up Nation, the much-touted tome on Israeli innovation, the company won accolades from the likes of the World Economic Forum and raised some $850 million over the years.
In 2008 it contracted Renault to produce a Better Place car, the Renault Fluence ZE, in hopes that others would also eventually begin producing cars to match its stations.
Yet when the car came onto the market in Israel and Denmark, where the company had invested millions in infrastructure, the public was slow to buy. To date, it has sold only some 900 in Israel, and 400 in Denmark.
Amid slow progress, management disagreements and a growing concern over the company’s financial situation, the board ousted its visionary founder, Shai Agassi, in October, replacing him with Evan Thornley, the CEO of Better Place Australia. Thornley himself stepped down in January, to be replaced by Cohen, and the company soon discontinued its global activities to focus on success at home.
When Better Place withdrew funding from its Australia operation in February, it had some 150 battery charge sites in Melbourne, Sydney, Canberra and the Hunter Valley.
Despite a handful of hopeful signs in Israel, such as a leasing program that boosted sales, and agreements to furnish fleets of cars to government bodies, the company failed to get a footing in the car market. On Sunday, its controlling shareholders at Israel Corporation decided that they would no longer invest in the operation.
“The technical challenges we overcame successfully, but the other obstacles we were not able to overcome, despite the massive effort and resources that were deployed to that end,” the board of directors said in a statement.
“The vision is still valid and important and we remain hopeful that eventually the vision will be realized for the benefit of a better world. However, Better Place will not be able to take part in the realization of this vision.”