The encyclopedia · Product & Design · Product decision · 2013
Better Place raised $850M for EV battery swapping — nobody wanted it
Better Place raised $850M from top investors to build battery-swapping infrastructure for EVs — only 1,400 cars ever used it and the assets sold for $450,000.
Better Place
What happened
Better Place was founded in 2007 by Shai Agassi, a former SAP executive, with a vision to build a battery-swapping network for electric vehicles. Drivers would pull into a station and have their depleted battery replaced with a charged one in under 60 seconds. The company raised approximately $850 million from prominent investors including HSBC, Morgan Stanley, VantagePoint Capital Partners and Israel Corporation.
Renault built the Fluence Z.E. as the first car compatible with Better Place's switchable battery. Better Place placed a non-binding order for 100,000 vehicles. In reality, fewer than 1,000 Fluence Z.E. cars were deployed in Israel and about 400 in Denmark — against Agassi's forecast of 100,000 EVs on Israeli roads by 2010. Battery-swapping never achieved meaningful adoption.
Better Place filed for bankruptcy in Israel on 26 May 2013 after spending all $850 million. After two failed acquisition attempts, the remaining assets were sold in November 2013 for $450,000. The battery-swapping infrastructure was dismantled. The Renault Fluence Z.E. was discontinued.
Why it happened
- Battery-swapping required a massive upfront infrastructure investment that could never be recouped at the tiny scale of adoption that materialized
- Renault built only about 1,400 compatible cars — far below the 100,000 vehicles Better Place had forecast, making the network economically impossible
- EV adoption in Israel and Denmark was far slower than Agassi predicted — fewer than 1,000 cars on Israeli roads by 2010 against a forecast of 100,000
- The company tried to establish operations in too many countries simultaneously, burning cash on market entry without a viable core market
The lesson
A visionary infrastructure bet fails when the demand it depends on does not materialize in the time the money lasts — and the more visionary it is, the less time there is.
Sources
- Better Place (company) — Wikipedia
- Death of Better Place: Electric car co. to dissolve — The Jerusalem Post
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