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Israeli Electric Car Company Better Place Files for Bankruptcy
The once-promising electric car company Better Place has filed for bankruptcy. The company sought to put in place a large and innovative electric vehicle network with interchangable batteries, which could be switched out and replaced in about the same amount of time it takes to fill up a tank of gas. But that concept never truly came to fruition, partly because it never attracted enough buyers to become a commercial success. On Sunday, the company announced plans to liquidate.
Under the Better Place business model, vehicle owners would own the cars, but Better Place would maintain ownership of the batteries. People would be able to drive up to charging stations to swap out batteries for fully-charged ones, enabling them to drive long distances—a problem that other electric car companies haven’t fully addressed. But unfortunately, the Israeli public simply didn’t buy into the program.
The move comes just one year after Better Place rolled out its electric vehicle charging network in Israel, and it had plans to expand to Australia, California, Canada, Denmark, and Hawaii. But as of March, Better Place had only sold 750 cars in Israel, and it had piled up losses of more than $500 million. The first cars to use Better Place technology were Renault Fluence ZE sedans. For its part, Renualt has said that it will continue to produce electric vehicles.
The reason that Better Place failed while Tesla is suddenly turning a profit has to do with Better Place’s business model, argues Todd Woody at Quartz. Better Place had to spend hundreds of millions of dollars just to get its charging network up and running, whereas Tesla was able to slowly scale up operations. “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,” said Better Place Chief Executive Dan Cohen in a statement.
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