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JERUSALEM -- It was an audacious idea that came to
symbolize Israel's self-described status as "Start-Up Nation," a company
that believed it could replace most gasoline-powered cars with electric
vehicles and reduce the world's reliance on oil - and all within a few
years.
But it all came crashing down.
The
company, Better Place, started out as a source of pride and a symbol of
Israel's status as a global high-tech power, but it suffered from a
local brand of hubris and overreach. On Sunday, it announced plans to
liquidate after burning through almost a billion dollars and failing to
sell its silent fleet of French-made sedans to a skeptical public.
"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,"
the company said. "Unfortunately, the path to realizing that vision was
difficult, complex and littered with obstacles, not all of which we were
able to overcome."
It capped a stunning fall
from grace for Better Place and its founder Agassi, a former high-tech
whiz kid who sought to change the world by building a revolutionary
network of battery-swapping stations.
Agassi,
45, believed that in an era of global warming and rising oil prices,
environmentally friendly electric cars could be the wave of the future,
if only a way could be found to overcome the limited range of their
batteries.
Better Place offered an elegant
solution. The vast majority of travelers who commute short distances
could plug in their cars at home or work each day to keep their
batteries recharged. For longer distances, customers could stop at the
swapping stations, remove their used battery and replace it with a fully
charged one in a matter of minutes.
Agassi's
native Israel was chosen as the company's main laboratory, and a network
of several dozen stations was installed, offering travelers nationwide
coverage.
Israel was a particularly ideal
testing ground, thanks to high fuel prices, a supportive government, its
relatively small size and dense population centers. The cars were
expected to appeal to Israel's tech-savvy population, and the ability to
weaken the political clout of its oil-rich enemies was an added plus.
The
project won the support of President Shimon Peres, received generous
financial incentives from the Israeli government and an endorsement from
former President Bill Clinton.
Agassi, a
former top executive at software maker SAP, became a celebrity CEO. He
was a central character in "Start-Up Nation," a best-selling book about
Israel's high-tech industry, he was named to Time Magazine's list of the
100 most influential people in 2009 and became a fixture at
international conferences such as the World Economic Forum in Davos,
Switzerland.
In roughly five years, Better
Place raised some $850 million from investors like General Electric Co.,
HSBC Holdings PLC and the European Investment Bank. Israel Corp.,
controlled by billionaire Idan Ofer, was the largest shareholder. Agassi
persuaded French car maker Renault to make a customized electric
version of its Fluence sedan.
Agassi promised
to 5,000 of his cars on Israel's roads by the end of 2011 and predicted
that a majority of cars sold in Israel would be electric by 2016.
"The
end of the oil era will not come because we ran out of oil - it will
come become we don't want to use oil any more to drive," Agassi told The
Associated Press in a 2011 interview. "I can guarantee you that we will
finish the need for oil as an energy source for cars before we run out
of oil in the ground."
The numbers never
panned out. Only about 1,000 Better Place cars are on the roads, and the
company ran into trouble with investors. Last October, Agassi was
forced to step down, and the company never gained its footing. Reached
by the AP on Sunday, Agassi declined comment.
Better
Place claimed to be the first nationwide network of battery-swapping
stations. Other countries, such as Germany, have public networks of
charging stations, while in other places, travelers typically recharge
their vehicles at home.
For the most part,
electric cars have not enjoyed their expected success anywhere. The
battery alone in an electric car costs as much as a new gasoline-powered
car, and electric vehicles are not selling nearly as fast as once
projected. General Motors expected to sell 60,000 Chevy Volts globally
last year, but sold just half that many. Sales of Nissan's all-electric
Leaf grew 22 percent around the world last year to 26,000, short of
Nissan's projected 50 percent growth.
One exception has been American electric car maker Tesla Motors, which recently posted its first profitable quarter.
Among
Better Place's mistakes, the company misjudged consumers' willingness
to embrace the new technology. There was the issue of "range anxiety,"
the fear of some that the batteries, with ranges of about 160
kilometers, or 100 miles, would conk out in inconvenient places.
Others
balked at the price. The cars sold for roughly $32,000, comparable to
other sedans in Israel. And the pricing plans, roughly $300 to more than
$500 a month depending on mileage, did not provide enough savings to
overcome the doubters.
Sunday's announcement
left many questions unanswered, especially what will happen to its cars
and charging stations. Better Place has also installed a network of
stations in Denmark and has operations in Australia, the Netherlands,
China, Hawaii and Japan.
Several hundred
workers in Israel are expected to lose their jobs, and stunned customers
said they did not know whether they would be able to continue driving.
Local celebrity Arik Zeevi, a former Olympic judoka, said he was sorry to see the company go.
"I
really like the idea of not being dependent on gas. That is something
that really speaks to me, and beyond that I really enjoy driving the
car. It is an amazing experience," he told Channel 2 TV. "I will be
really bummed out if I need to give that up."
In
its court motion Sunday, Better Place said it was seeking the
appointment of a temporary liquidator. In light of its failure to raise
additional funds, the company asked for the court's assistance in
protecting the rights of its employees, customers and creditors.
"On
a personal level this is one of the hardest moments of my career," CEO
Dan Cohen said Sunday. "The feeling this morning is one of loss because
we didn't reach the finish line, the finish line is still far away."
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