Electric car company Better Place said yesterday it had filed a motion in an Israeli court to wind up the company, bringing an end to a venture whose battery charging network had aimed to boost electric car sales.
Better Place partnered with Renault in 2008 to create an electric car system combining charging terminals with battery swap stations to increase the range of electric cars and put an end to drivers’ worries about running out of power.
It raised more than $850m (€657m) from top-tier investors and just two years ago said it was valued at $2.25bn.
However, sales never took off, with just 1,300 cars on the road in Israel and Denmark, the first two countries where it began operating.
“The [gasoline-free] vision is still valid and important and we remain hopeful that eventually the vision will be realised for the benefit of a better world,” the company’s board of directors said in a statement.
“However, Better Place will not be able to take part in the realisation of this vision.”
Car-makers have invested heavily in electric cars, but awareness is growing that hybrid and battery cars may not be enough to win the race to meeting rigid EU carbon dioxide emissions limits.
“This is a difficult day for all of us,” said chief executive officer 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.”
The company management, he said, requested the appointment of a voluntary liquidator who would decide on how to award compensation to customers and staff and maintain the network already in place.
Yesterday’s announcement came as no surprise. With its partner Renault, Better Place committed to a production run of 100,000 electric cars for Israel and Denmark, counting on large fleets to sign up.
At the same time, it developed plans to expand into Australia, China, and the US. But large-scale deals never materialised and only about 900 of its cars are on the road in Israel, with 400 in Denmark.
Renault could not immediately be reached for comment.
A November earnings report published by conglomerate Israel Corp, which owns about 30% of Better Place, said the company had an accumulated deficit of $561.5m, with more losses expected.
The company made changes and reduced its workforce. Founder Shai Agassi was removed as CEO in October, and his successor was replaced just four months later. Alan Gelman, chief financial officer and head of operations in Israel, said at the time that the company knew why it was floundering and was trying to turn a corner. “We at times were too focused on turning into a global company and expanded too fast, but we have to focus on local operations and selling cars,” he said.
After a failed final round of fundraising, Better Place turned to the Tel Aviv area court.
“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,” it said in a statement.
Israel Corp, the largest shareholder in Better Place, said in a statement to the Tel Aviv Stock Exchange yesterday that it had decided not to inject more cash into the company.