Bankruptcy For Electric Carmaker Better Place
May 27, 2013

Electric Carmaker Better Place Filing For Bankruptcy

redOrbit Staff & Wire Reports - Your Universe Online

Six years after launching with dreams of creating vehicles capable of ending the world´s dependence on fossil fuels such as oil, electric car manufacturer Better Place has announced that they are going out of business.

Rumors of the company´s impending demise, first reported by Friday by Dan Primack of Forbes, were confirmed by the company´s board of directors in a written statement released on Sunday.

“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,” they explained, according to CNET´s Dan Farber. “Unfortunately, the path to realizing that vision was difficult, complex and littered with obstacles, not all of which we were able to overcome.”

Agassi, the founder and former chief executive of the company, created Better Place in 2007 with the hopes of building a network of battery-exchange stations for electric vehicles, Primack explained — ideally replacing traditional charging stations and eliminating the mileage limitations for battery-powered cars. Better Place believed that electric cars would become far more popular due to the economic struggles facing traditional automakers and the rising prices of oil, and that the company would have the supply to meet that rising demand.

The company had the support of Israel´s President Shimon Peres, according to Bloomberg´s David Wainer. It joined forces French with automaker Renault in 2008, according to Farber, and raised approximately $850 million from investors such as General Electric and HSBC Holdings, according to the Associated Press (AP).

Even so, they were never able to find a foothold, Wainer said, as the company´s January 2012 product roll-out featured just 100 electric cars made available to Israeli customers. As Farber put it, “When oil hit $125 per barrel and General Motors (GM) filed for bankruptcy within just 18 months into Better Place's existence, it failed to successfully execute.” The company had reportedly amassed losses exceeding $560 million.

The company has filed a liquidation motion with an Israeli court, and according to Forbes, current CEO Dan Cohen has told customers that they “will recommend that the liquidator, once appointed, continues operating the station network temporarily so that customers are given a reasonable amount of time to make alternate plans.” Cohen is the firm´s third CEO in less than a year, following Agassi and Evan Thornley.