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Better Place files for liquidation

No Better Place: The high-profile global EV infrastructure firm says its “vision is still valid”, but now concedes it will not be able to take part in its realisation.

Lack of funds, car-maker battery swap support, sends Better Place into liquidation

27 May 2013

UPDATED: 27/05/2013 5:15PMGLOBAL electric vehicle infrastructure company Better Place has this week filed for liquidation, citing an absence of sufficient resources and a failure to raise enough funds to continue operating.

The announcement has come less than four months after Better Place’s Israeli-based management revealed it was pulling back on further investment in its Australian business and shutting down “non-core activities” in its American operation based in California’s Silicon Valley.

As previously reported, the company shifted its focus earlier this year to its core markets of Israel and Denmark after racking up $US600 million ($A623m) in accumulated losses.

It has also overhauled its senior management team, with founder Shai Agassi replaced last October as chief executive by Australian Evan Thornley, who in turn lasted only four months in the job.

The lack of commercial success of the company’s battery swap system for electric cars, which was developed in partnership with Renault, is at the core of this week’s decision to file a court motion in Israel to appoint a temporary liquidator.

While electric vehicle development is now deeply embedded in the product development programs of the world’s major car manufacturers, almost all of them have chosen not to have their EVs compatible with a battery swap system.

80 center imageLEft: Renault's Fluence ZE used Better Place's battery swap service.

Renault has also now switched its EV engineering focus to fixed batteries, leaving its Fluence ZE – a car that was put on indefinite hold for Australia late last year – as the only model in the French brand’s stable capable of using the battery swap system.

Earlier this month, Renault-Nissan chief Carlos Ghosn was quoted as saying that no other EVs in its line-up were expected to have the ability for its battery to be changed at a quick-swap station.

In a statement released on Sunday, Better Place CEO Dan Cohen, who replaced Mr Thornley in January, said the management team had requested that the voluntary liquidator, once appointed, “decide as quickly as possible to award compensation to customers and staff and maintain the functioning of the network”.

“This is a difficult day for all of us,” he said.

“We have come a long way in order to bring about a global vision. From the start, Better Place was a breakthrough for the infrastructure of the electric car industry and successfully completed the development of its technology and infrastructure. Israel was the first place in which an electrical car could travel without limit.

“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.

“Against that background, the most recent fundraising round was not successful. In recent months, the management of the company did all that it could to keep the business operating.

“Today, in the light of our obligation to our staff, customers and creditors, we are applying to the court for the appointment of a temporary liquidator.”

Better Place said that over the past six months, its current management team had “made fundamental changes in the company, focused its strategy, goals and markets and at the same time has continued to seek additional financing for the business and secure additional models to supplement its current offer”.

However, the company said that revenues were 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”.

The board of directors said in a statement: “This is a very sad day for all of us. We stand by the original vision as formulated by Shai Agassi of creating a green alternative that would lessen our dependence on highly polluting transportation technologies.

“Unfortunately, the path to realising that vision was difficult, complex and littered with obstacles, not all of which we were able to overcome. The technical challenges we overcame successfully, but the other obstacles we were not able to overcome, despite the massive effort and resources that were deployed to that end.

“The most important thing of all was that the intention was the right one. The purpose and concept of the business was to deliver a positive change in the world in which we live. We know that there is no certainty in any venture. It requires daring, courage, determination and resources in order to turn a venture into a sustainable industry.

“The vision is still valid and important and we remain hopeful that eventually the vision will be realised for the benefit of a better world. However, Better Place will not be able to take part in the realisation of this vision.”

In Australia, the RACV, Lend Lease Ventures, energy group ActewAGL and several private investors pumped a combined $27 million into Better Place Australia.

The company had planned to develop its first battery-swap station in Canberra, where it has already installed a number charging points and signed a deal with electricity supplier ActewAGL for green power.

But the battery swap station – enabling drivers of suitable cars to drive in and have a freshly charged battery installed in a matter of minutes – was never built.

In a statement issued today, Renault said Better Place’s decision to file for liquidation “does not at all call into question the electric vehicle strategy of the Renault-Nissan Alliance”.

“Electric vehicles are a revolution in mobility,” the company said. “Renault is exploring all the charging technologies from quick drop to several alternatives.

“The Alliance is the world leader in terms of electric vehicles, and the volumes of Renault’s EVs continue to progress month after month.”

Renault also said its retail network in Israel and in Denmark will continue to provide aftersales servicing for the Fluence ZE and these vehicles’ batteries.

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