Better Place was a venture-backed international company that developed and sold battery charging and battery switching services for electric cars. It was formally based in Palo Alto, California, but the bulk of its planning and operations were steered from Israel, where both its founder Shai Agassi and its chief investors resided.
The company opened its first functional charging station the first week of December 2008 at Cinema City in Pi-Glilot near Tel Aviv, Israel. The first customer deliveries of Renault Fluence Z.E. electric cars enabled with battery switching technology began in Israel in the second quarter of 2012, and at peak in mid September 2012, there were 21 operational battery-swap stations open to the public in Israel.
Better Place filed for bankruptcy in Israel in May 2013. The company's financial difficulties were caused by mismanagement, wasteful efforts to establish toeholds and run pilots in too many countries, the high investment required to develop the charging and swapping infrastructure, and a market penetration far lower than originally predicted by Shai Agassi. Fewer than 1,000 Fluence Z.E. cars were deployed in Israel and around 400 units in Denmark, after spending about million in private capital. After two failed post-bankruptcy acquisition attempts, the bankruptcy receivers sold off the remaining assets in November 2013 to Gnrgy for only $450,000.
History
Launch The company was publicly launched on October 29, 2007, as Project Better Place, by Shai Agassi, the company's founder and CEO at the time. According to Agassi, his vision was inspired by a question asked by Klaus Schwab at the 2005 World Economic Forum in Davos, Switzerland: "How do you make the world a better place by 2020?"Better Place: "leadership team: Shai Agassi" As of January 2011 it had raised $700 million, and about a third was spent in setting up the battery switch stations. Also, several countries and states had offered tax breaks.
Better Place announced deployment of electric vehicle networks in Israel, Denmark and Hawaii in 2008 and 2009. The company planned to deploy the infrastructure on a country-by-country basis, and said it was in talks with more than 25 additional regions around the world. Australia, Ontario, Oregon, and California also announced deployment of Better Place electric car networks.
In January 2008, Better Place announced a memorandum of understanding with Renault-Nissan to build the world's first Electric Recharge Grid Operator (ERGO) model for Israel. Under the agreement, Better Place would build the electric recharge grid, and Renault-Nissan would provide the electric vehicles.
Bankruptcy
On October 2, 2012, Agassi resigned from his role as worldwide Better Place CEO, and was replaced by Evan Thornley, CEO of Better Place-Australia. Agassi briefly remained on the company board, but a week later he resigned from that position as well. A few days after Thornley's appointment, Better Place asked its investors for a round of emergency funding, totalling about $100 million. On October 29, 2012, Ynet reported that Better Place would that week lay off 150 to 200 of its 400-person staff in Israel as it sought financing to combat its cash-flow problems.
In late January 2013, Thornley was fired by Chairman Idan Ofer, and Dan Cohen was named acting CEO by the board. As a consequence of the financial problems, the Australian rollout was put on hold, as the company decided to concentrate on its two existing markets. However, on 26 May 2013, Better Place filed for bankruptcy in Israel. Following the decision of the board of directors of the global company, Better Place Danmark A/S also decided to initiate bankruptcy proceedings on the same date.
The company's financial difficulties were caused by the high investment required to develop the charging and swapping infrastructure, about million in private capital, and market penetration significantly lower than originally predicted by Shai Agassi, who expected 100,000 cars on Israeli roads by 2010. Fewer than 1,000 Fluence Z.E. cars were deployed in Israel and around 400 cars in Denmark. Under Better Place's business model, the company owned the Fluence Z.E. batteries, so the court liquidator would have to decide what to do with customers who do not have ownership of the battery and risk being left with a useless car.
Post-bankruptcy acquisition attempts and liquidation In July 2013, an attempt to acquire Better Place was made by the Sunrise group that comprised entrepreneur Yosef Abramowitz and the Association for the Advancement of Electric Transportation in Israel. Court filings showed that the acquisition would be worth 18 million Israeli shekels () for Better Place's assets in Israel, and 25 million Israeli shekels () for its intellectual property, held by Better Place Switzerland. The deal was canceled by the court after the Sunrise group failed to make the first agreed payment of 3.52 million shekels (), even after an extension.
In August 2013, the Central District Court ruled that Better Place Israel would be sold to Success Assets Ltd., owned by Tsahi Merkur, for 11 million shekels (million). To effect the acquisition, Merkur was to sign a personal guarantee within seven days for the full amount of the acquisition, and a personal guarantee for a letter of indemnification covering the guarantees made by Better Place Israel's subsidiaries to the Ministry of Transport. Within 21 days, Merkur was to deposit with the company's special managers an opinion on a property on which a commitment to register a lien of up to 5 million shekels would be placed. By 30 September 2013 he was to make a payment of 2 million shekels. On 17 October 2013 the deal was canceled after Success Assets failed to make the required payments.
In November 2013, the court-appointed receivers decided to sell the remaining assets of Better Place in parts and liquidate the business.
Business model
History of the battery swap concept
The steam car, the internal combustion engine automobile, and the electric car emerged as the main competing technologies in the late 1890s until the 1920s. The concept of exchangeable battery service was first proposed as early as 1896 in order to overcome the limited operating range of electric cars and trucks.
The concept was first put into practice by Hartford Electric Light Company through the GeVeCo battery service and was initially available for electric trucks. The vehicle owner purchased the vehicle from General Vehicle Company (GeVeCo, a subsidiary of the General Electric Company) without a battery and the electricity was purchased from Hartford Electric through an exchangeable battery. The owner paid a variable per-mile charge and a monthly service fee to cover maintenance and storage of the truck. Both vehicles and batteries were modified to facilitate a fast battery exchange. The service was provided between 1910 and 1924 and during that period vehicles using it covered more than 6 million miles. Beginning in 1917 a similar service was operated in Chicago for owners of Milburn Light Electric cars who also could buy the vehicle without the batteries.
Electric forklifts have used battery swapping since at least 1946 and a rapid battery replacement system was implemented to help maintain 50 electric buses at the 2008 Summer Olympics in China.
Better Place business model Better Place implemented a business model wherein customers entered into subscriptions to purchase driving distance similar to the mobile telephone industry from which customers contract for minutes of airtime. The initial cost of an electric vehicle might also have been subsidized by the ongoing per-distance revenue contract just as mobile handset purchases are subsidized by per-minute mobile service contracts. Better Place's goal was to enable electric cars to sell for $5,000 less than the price of the average gasoline car sold in the United States, or the impact of electric cars would be minimal. For example, the Prius hybrid had been sold for 13 years at a price of $4,000 more than other gasoline cars and had captured less than 2% of the worldwide car market.
The Better Place approach was to enable manufacturing and sales of different electric cars separately from their standardized batteries in the same way that petrol cars are sold separately from their fuel. Petrol is not purchased upfront, but is bought a few times a month when the fuel tank needs filling. Similarly, the Better Place monthly payment would cover electric "fuel" costs including battery, daily charging and battery swaps. Better Place was to allow customers to pay incrementally for battery costs including electric power, battery life, degradation, warranty problems, maintenance, capital cost, quality, technology advancement and anything else related to the battery. The per-distance fees would cover battery pack leasing, charging and swap infrastructure, purchasing sustainable electricity, profits, and the cost of investor capital. All battery problems would be handled by Better Place which would then bundle the costs and bill their customers monthly for providing all the infrastructure.
The Better Place electric car charging infrastructure network was based on a smart grid software platform using Intel Atom processors and .NET Framework, or comparable vendors. This platform was first of its kind in the world and was to enable Better Place to manage the charging of hundreds of thousands of electric cars simultaneously by automatically time-shifting recharging away from peak demand hours of the day, preventing overload of the electrical grid of the host country. According to Agassi, Better Place would be able to provide electricity for millions of electric cars without adding a single electricity generator or transmission line by using smart software that oversaw and managed the recharging of electric cars connected with Better Place. A critique of the company's business model was later published.
Better Place encouraged governments to mandate the use of international standards and open access to recharge across charging networks to facilitate competing networks. Standardization efforts such as SAE J1772, however, had not yet yielded global consensus . Better Place displayed Charge Spot charging stations that used a connector with the same pin layout as SAE J1772-2009 but housed in a non-standard, triangular plug. They also displayed a wall mounted charging station using IEC 62196 Type 2 receptacle. Battery pack switching outside of Better Place's network was not to be allowed. Better Place said it had pre-sold enough contracts to make its first deployed network in Israel profitable at launch.
Energy sources Agassi stated that the company's plan was to have the network's electricity generated entirely by renewable energy from solar arrays and wind farms if necessary, thus invalidating the "long-smokestack" accusation leveled against electric vehicles which rely on the nonrenewable sources of the electricity. However, achieving the 100% renewable energy goal would have depended on the local electric grid's energy sources.
In Israel, where the first Better Place deployment took place, the electric grid is based mostly on fossil fuels, rendering the renewable energy vision practically impossible in the short term.
Cars and batteries
The first prototype car was the Renault Laguna with a battery instead of a fuel tank and an electric motor instead of an internal combustion engine. The battery for electric vehicles was a Lithium iron phosphate ion device. The range of the car running on just one battery was from about to . By replacing the battery at a battery switch station, the range between longer charging stops was to be limited only by the geographical distribution of the battery-swapping infrastructure.
The second demo car was the Nissan eRogue, an electric car based on the Renault-Nissan Rogue, halfway between a sedan and an SUV in size.