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Published on May 1st, 2014 | by Andrew Meggison


Shai Agassi & Project Better Place’s Downfall

May 1st, 2014 by  

Originally published on Gas.


How would you run a whole country without oil? Israeli entrepreneur Shai Agassi wanted to find out, and the result was a company called A Better Place. Through a network for charging stations and robotic battery swapping stations, Agassi had grand ambitions to banish oil from the world. But his grand ambitions fell far shore, taking with it more than a billion dollars of investments and leaving behind a legacy of unfulfilled promises that Fast Company explores in an excelent, in-depth article.

Project Better Place was not an electric car company, but rather an electric infrastructure company in the form of charging stations and automated battery swap out stations that utilized robots to change out EV battery packs in five minutes. Better Place bought modified Renault electric vehicles with a battery range of 80 miles, and the goal was to install enough battery-swapping stations to allow a driver to go from Tel Aviv to Eilat, about 200 miles away, with only 15 minutes worth of stops. At its height, A Better Place had a $2.25 billion valuation based around Agassi’s promises.

A Better Place was not just some Israeli hidden secret either. Shai Agassi was all over the news for sometime, appearing on TED talks, being featured in the New York Times, on the cover of Wired Magazine in 2008, and even had a spot on the Colbert Report. All this exposure paid off big time as other nations came calling on Agassi. Demonstration projects were planned in China, Japan, and even the State of Hawaii. Better Place was even at the U.S. Capitol during the 2009 auto industry bailouts – because why bail out GM when you could throw support behind this new industry?

That didn’t happen of course, and when Department of Energy did ­offer loan guarantees to some EV and clean tech startups rolled out, Better Place was not on the list. Why? Agassi’s attitude alienated him from automakers like GM, who showed interested but were turned off by the outspoke CEO. Better Place’s failure to partner with am automaker with a U.S. presence (which Renault doesn’t have) kept it from securing needed funding.

Meanwhile, Better Place was blowing money on obscene pet projects like a GPS navigation system called osCAR that cost some $60 million to develop. Meanwhile, the actual electric cars themselves were doughy, short-ranged, and slow, hardly inspiring the kind of emotion Better Place was hoping for. Charges of cronyism were levied at Agassi, and after failing to get funding from the U.S. Agassi scaled back American and Australian operations, moving back to Isreal to focus on the company’s home market, as well as Denmark. But it was too little, too late.

In 2010 A Better Place moved to Israel and opened a visitor center in Tel Aviv complete with test tacks that attracted 100,000 tourists, including U.S. congressmen, senators, and governors. But by January 2012, Better Place was bleeding an estimated $500,000 per day. In the two months that followed, Better Place sold only 100 of their battery-swappable Renault Fluence Z.E. sedans By early 2013, Better Place filed for bankruptcy, and the company sold less than 1,500 EVs, with just 21 operational battery swap stations that have since been shuttered.

Late last year, the remnants of Better Place were sold for just $450,000.

There’s a lot more to this story and it’s absolutely worth reading the whole piece to get an idea of the madness that went on behind the scenes at Better Place. For an idea with so much promise and ambition, it’s a shame things ended the way they did.

Source: Fast Company 

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About the Author

Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison

  • JamesWimberley

    Didn’t Better Place pioneer the battery leasing idea, which Renault/Nissan have introduced on a large scale with the Leaf? I agree the battery swapping idea was a non-starter. It’s been tried with more reason for buses (which have a small fixed number of garages in any fleet), but BYD has made that half-way house obsolete already..

    • Benjamin Nead

      Not sure about Europe, James, but I’m pretty sure, here in the US, Nissan offers the complete Leaf either for outright sale or leases the entire vehicle: no vehicle-minus-battery purchase with separate battery lease. If anyone here knows differently, please chime in with details and I’ll stand corrected.

      The main piece from which the above Clean Technica article alludes
      to . . .


      . . . provided a fascinating overview on Better Place’s many and varied problems. I learned a lot from reading through it completely and now realize what a mess (even if you liked certain aspects of Better Place’s business model) the whole operation was. Shai Agassi’s hubris was, apparently, one of the main obstacles in the way of success.

      Regarding battery leasing and/or swapping ideas: I think one of the best comments on that was found in the Fast Company writeup . . . “Agassi’s central thesis – that people wanted to buy car service the way they buy phone service – was flawed. “Nobody loves their wireless carrier,” says a Better Place designer. “They love their iPhone.”

  • Benjamin Nead

    Better Place’s demise is a complex story. But, at it’s essence, the idea was about as practical as swapping gasoline tanks out of internal combustion cars whenever the fuel got too low. The business model bet on the hope that battery technology would never advance to a point when longer range and/or faster charging cars would arrive . . . or that there would be enough of these battery swap robot shacks deployed before those issues would be resolved. It also assumed (or its supporters hoped) that vehicle manufacturers would make EV batteries of the same physical size and electrical interface. The only sort of scenario where vehicle traction battery swapping like Better Place’s would work is in fleet services, such as electric taxi cabs.

    • Doug

      After I used a Tesla Supercharger a few times, I quickly realized that battery swapping is unnecessary. It’s much less complicated and expensive to simply get an 80% charge in 20-30 min off an modestly priced quick charger or supercharger.

  • patb2009

    The most devastating comment was “Shai Numbers”, that the numbers Agassi would throw around seemed utterly disconnected from reality.

    Agassi had the chance to partner with Chevy to build nationwide charging stations, which would have given them some US presence.

    I think the real problem was they had too much money too early, if they had far less, they could have focused on Israel, gotten the program working and worked to fit into critical niches such as taxis, municipal vehicles and mail vehicles. expand from there, prove it out, and get into other island economies.

    • Ronald Brakels

      Yes, with their Australian foray, which didn’t have a great deal of substance, it was clear (to me at least) that unless they could offer a price point that was attractive to taxis and lock in a significant customer base that way, they would not succeed Down Under. They didn’t and they failed.

    • zeev kirsh

      no the problem is that battery swapping is fundamentally inefficient for 5 to 6 different reasons.

      on top of that, batteries are not yet good enough to scale, but assuming the R&D on batteries eventually produces a process and material scaleable enough for mass production on a scaleable price——-then the charging network schema is then the next issue to tackle.

      as it stands, the current electricity networks we have are significantly under-utilitzed, and there remains much spare capacity to take advantage of. why? because the grid is built for peak loads. and the amount of electric cars is pretty insignificant as to be a big part of what comprises the peak load. so during off peak ( which is most of the time) the grid is highly underused.

      battery swapping was dead on arrival, and the many critics of battery swapping were ignored by aggasi’s investors to their peril.

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