UPDATE 2-Electric car venture Better Place files to wind up company

Sun May 26, 2013 6:28am EDT

* Better Place raised $850 million, once valued at $2.25 bln

* Sluggish sales led to company's failure

* Company unsuccessful in final round of fundraising

By Ari Rabinovitch

JERUSALEM, May 26 (Reuters) - Electric car company Better Place said on Sunday 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 $850 million from top-tier investors and just two years ago said it was valued at $2.25 billion.

But sales never took off, with only just over a thousand 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 realized 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 realization of this vision."

Carmakers 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," he said in a statement.

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.

MUCH FANFARE, FEW SALES

Sunday'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 and then onto markets like China and the United States.

But the large-scale deals never materialized. Only about 900 of its cars are on the road in Israel, and about 400 in Denmark.

Renault could not immediately be reached for comment.

A November earnings report published by conglomerate Israel Corp, which owns about 30 percent of Better Place, said the company had an accumulated deficit of $561.5 million 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, told Reuters 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 on Sunday it had decided not to inject more cash into the beleaguered company.

Other shareholders include HSBC, GE and Morgan Stanley.

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Comments (4)
Wal_Man wrote:
The electric car is a pipe dream regardless of government’s heavy handed emissions laws and big buck subsidies. Despite all the hype and good feelings, they aren’t better for the environment. The opposite really since they will draw resources that would better go to home heating than to making all that electricity they will need if they ever caught on. But since the government, despite it’s heavy investments of other people’s money, can’t make a market for it, the electric car has no future. It’s too costly at every turn: manufacture, power generation and recycling the batteries. There is also a fundamental element it has to overcome: Physics! EC developers have been caught in many a lie concerning their insistence that they have overcome the “Cold” issue. They haven’t.

We are wasting resources on a failed concept. If we had thrown this much effort and money at making gasoline engines work more efficiently, we’d have production vehicles out there getting 100 miles to the gallon. There’s you real goal. Too bad you’ve blown it again by expecting government to pick the winners in the marketplace.

May 26, 2013 10:17pm EDT  --  Report as abuse
Tony2238 wrote:
With all candor, the self-styled “environmentalists” who are pushing for ever stricter emissions standards aren’t interested in clean vehicle technology. They’re anti-humanists who want to drive 90 percent of humanity into ghettos, where their only transportation options will be mass transit and no private vehicles other than perhaps bicycles. Electric cars aren’t part of their dark vision for our future.

May 26, 2013 11:00pm EDT  --  Report as abuse
Mario147 wrote:
Big buck subsidies? You mean the BILLIONS that the US government gives to ExxonMobil and other petroleum companies for more than a century now?

Electric is coming – wind generation uses no fuel, and now large capacity batteries are being installed as well.

So sell that stock in filthy oil, coal, and nuclear. Or take a ride to hell with them if you want.

May 27, 2013 2:09am EDT  --  Report as abuse
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