Better Place stumbling badly, will they survive or will they become an asterisk in electric car history?

The Project Better Place model was always interesting, but I was never confident that the company would work out. The service the company offers, fast battery exchange for electric cars, offers electric car drivers a convenience similar to what gasoline car drivers enjoy at the ubiquitous gasoline stations. A fast recharge within a couple minutes, and away the driver goes with a full “tank of fuel”. But I saw that model as addressing two medium-term problems with electric cars: a) battery pack cost, b) recharge time. Because both of those would be addressed over the long term it seemed Better Place had a short window of time in which it would play a valuable role.It may be that we’ll never see that idea tested because Better Place may be on the verge of dying as we speak. In October, founder Shai Agassi was forced out

and since then the Israeli press has been full of stories about problems at Better Place. The current news is that the new CEO, Evan Thornley, is rewriting the Better Place business plan under demands from The Israel Corp

to come up with a viable plan or else funding will be cut off.The problems are:

The company badly missed sales projections of 4,000 Fluence ZE sales in 2012 in Israel; instead the company has sold less than 500 of those cars
The company is running a much steeper deficit than originally projected
Investors are openly wondering when Better Place will become profitable, and are losing confidence

An interesting and important side note is a data item in a report on the Globes

website. This report talks of worries expressed by the Barran Group, the company building Better Place’s battery exchange stations in Israel. Each station is costing 1.1 million NIS, which is $250,000 US per today’s exchange rates. This means that Better Place’s infrastructure costs more to build than does the typical fast charging station network operator, whose stations cost under $100,000 apiece to install.

That tells us that a battery exchange network has a higher capital cost overhead than does a fast charging station network. Especially when you consider that installed costs for fast charging stations are falling (slowly). This makes sense because the Better Place system requires more equipment than does a fast charging station.

These problems tell us that Better Place is failing to convince Israeli car owners to buy into the electric car concept. That’s even though Israel seems like the perfect place to launch electric cars.

In the short-medium term we’ll expect to see more electric cars with fast charging capability, especially as the SAE DC Fast Charging system becomes available in cars. This will erode the need for a battery exchange system because it removes one of the issues Better Place seeks to address.

I already noted this when discussing the Renault ZOE following the 2012 Paris Auto Show. The ZOE had always been positioned as participating with the Better Place battery exchange system, but at the Paris Auto Show nary a peep was mentioned about that feature. Instead the 43 kilowatt three phase AC (AC level 3) fast charging system was given the limelight, because that feature allows a half hour full recharge. Renault is planning to build a network of those fast charging stations throughout France, for example. That led me to post a kooky theory of the week suggesting Renault is backing away from Better Place, which would leave Better Place in a world of hurt over supply of compatible electric cars. That is, except for the plan between Better Place and Coda for Coda to supply electric cars for an electric taxi service in the SF Bay Area. Another kooky theory says Coda may start supplying cars to Better Place.

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About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.