Better Place Not A Good Investment
Shai Agassi thought Better Place was the secret sauce to spice up electric vehicle sales: Swappable batteries as a service, the answer to high battery prices (hidden in a pay-as-you-go model,) range anxiety and long charge times. Instead, Better Place emerges as a novel way to destroy money. Better Place posted third-quarter loss of $71.2 million, greater than $65.8 million a year earlier. The total loss for the January to September period stands at $203 million, Reuters says. Better Place accumulated losses of $561.5 million.
Out of the 100,000 electric Renault Fluence Better Place wanted to put on the streets of Israel and Denmark, only 500 have been delivered so far. No wonder Better Place replaced its chief executive and founder Shai Agassi in October.
Israeli media have reported that fleet owners are backing out of a deal with Better Place.
Better Place investor Israel Corp and expects Better Place “to have losses and negative cash flow in future periods.” Better Place needs money. It wants to raise $100 million in an issue of preferred stock, two-thirds are supposed to come from Israel Corp, which hasn’t lost the faith.
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As every other bleeding edge idea with a grand scale in mind, they were killed by progress. Electric cars become more and more "normal", batteries live longer and hold more, onboard generators and quick charging solve range anxiety issues, and all of a sudden we're in a world that doesn't care about swappable batteries because there's no need. Imagine having battery swap stations for your cell phone... Would be cool when it wasn't profitable to have such a network, and now that we have enough cell phones we don't need it because batteries are so good. Too slow and too unambitious to succeed, as funny as it sounds. Had they opened a 10000 cars a month factory 2 years ago, things would have been very different. Now, it's a walking corpse.
"Instead, Better Place emerges as a novel way to destroy money." Of course it has. EV owners like me have already made up their mind to charge at home or at specific other locations, without hoping for a vehicle and charging paradigm that Better Place offers. The Better Place concept is about ten years too late. EV makers maybe could have embraced the switchable battery design if there had been earlier cooperation for such a standard. Now, it's too late, and we're stuck with only the J1772 plug standard. Besides, I still think the business model for Better Place is too complex, with too many variables to manage to make it work.
It's OK, bankruptcy is practically cool these days.
This will never make money. It was never meant to make money as an actual business. It was an enviro-hustle that managed to get much bigger than anyone dreamed. We knew this day one, that people kept falling for it is the only part that was newsworthy. Anyone who listened to Agassi's interviews day one, could tell he was a con-man on par with Malcolm Bricklin, or Enron. That the product being offered was never going to sell any more than a Segway, and Segways actually are useful. As I said 4 years ago, the only "BetterPlace" when this is all done will be Agassi's bank account.