Better Place shutting down U.S. and Australian operations, leaving just Denmark and Israel running

Project Better Place is turning out to be not-so-great a place to be, unless you’re working in the Israeli or Denmark operations.  On Wednesday (today) Feb 6, 2012, the company announced that in order to better focus on the Israel and Denmark operations, they would stop all work on projects elsewhere including the Australian operation, and to wind-down non-core operations in America.  This move followed several months of turmoil in the company, a couple layoffs, the ouster of founder Shai Agassi, followed by the ouster of several members of senior management.  The ousters included the CEO, Evan Thornley, who’d been moved from Better Place Australia to take over as CEO of global Better Place operations.

I’ve been predicting since October 2012 that Better Place appeared to be losing out on their relationship with Renault.  At that time Renault unveiled the Zoe, a compact electric car that had originally been intended to use the Better Place quick battery pack exchange system, but instead was unveiled with zero mention of that plan and instead a fast charger was in its place.  It occurred to me that Renault perhaps saw they didn’t need Better Place, but could go with fast chargers instead.  In November word became available that Better Place had run into serious troubles, had ejected founder Shai Agassi (see Shai Agassi resigns from Better Place board following resignation from CEO post), and the new CEO had been ordered to come up with a new business plan (see Better Place’s and new CEO rewriting business plan under orders from Israel Corp).  Also, the Renault Fluence Z.E. launch was delayed in Australia because Better Place Australia was not setting up the battery exchange network fast enough.

Now, Better Place has posted a press release (today) saying

Tel Aviv – Following the decision by Better Place to focus on delivering on its strategy in Denmark and Israel, where the complete infrastructure is in place and commercial operations are fully underway, consultations are underway with a view to securing an orderly wind-down of its non-core activities in North America and limiting any further investment in Australia beyond its current commitments.

The company’s priority in those markets is to ensure that existing engagements to key partners, customers, and suppliers will be honoured and Better Place retains the option to resume roll-out in these markets when circumstances permit. Better Place is committed to finding alternative arrangements for existing customers in these markets, allowing them to continue the joy of anxiety free, electric car driving.

Better Place continues to make progress in its two core markets, Denmark and Israel, where sales of new electric cars are gathering momentum. Better Place is working with its existing and potential partners on a number of marketing and other initiatives which should further accelerate recruitment of new members.

It was followed by a quote from the new CEO saying

Dan Cohen, CEO of Better Place, said today: “We have demonstrated that Better Place works as a concept. We need to prove to our customers, suppliers and investors that we have a sustainable, scalable model. To do so we are now focusing on realizing the full potential of what we have built, and that means concentrating our resources and energy in the near term, on Denmark and Israel, where we have customers on the road enjoying our switching and charging networks. At the same time, we had to make some difficult decisions on actions to be taken elsewhere in the world. We believe in the long term potential of both Australia and North America and are enormously encouraged by the enthusiastic response we get from all our customers. Therefore we will keep exploring solutions which will enable us to keep our long term options with regard to those markets open.
As for the previous CEO.. Evan Thornley.. their press release on Jan 16 said very little other than thanking Thornley for his work.  It almost seemed from that press release that they wanted to portray him as always intended to be an interim CEO.  But if so, then why did Thornley move his family to Israel?  He clearly thought that was going to be a permanent move for him and his family.

In early January the company held a public meeting reported on by “Brian of London” in which the since-then-departed Evan Thornley laid out Better Place’s situation and plans.  An interesting part of this is that Thornley has “made Aliyah” (part of the process of converting to Judaism apparently) and is close to finishing his conversion to Judaism.  He had started that process prior to joining Better Place, meaning there’s a bit more to the story of Thornley moving his family to Israel than just having taken over as CEO.

Thornley repeatedly said good things about Shai Agassi’s original vision.  He described the problem with Better Place as having been overly aggressive in setting targets, not the original vision.  Supposedly customer satisfaction, of the few customers they have, is high.

The vision for Better Place is to be “a service provider for all vehicles that have a plug.”  This is a little different from the vision of being an electric car retailer, selling cars that are made for Better Place by partners (Renault).  He claimed that “that battery switch is the best long term solution for electric cars.”  But before this can be established, “dual power train cars” (plug-in hybrids like Volt) will sell better than all electric cars.  But all electric cars are cheaper to make than dual power train cars, because of the simplicity.

An advantage Better Place brings is a great “demand management” system to better work with the power companies, tailoring when and how much electricity is used in recharging.  Additionally they have an excellent fault detection and repair system.

Hence, Better Place is not abandoning “battery switch” as their core concept.

An interesting choice of staff for Better Place is Peter Economides.  He’s the guy who worked with Steve Jobs to design the Think Different campaign that positioned Apple to become the powerhouse it is today.

During the Q&A session, Thornley made it clear there won’t be major new investments in switch stations in Israel until subscriber numbers go up.  That point is compatible with the decision to close down U.S. and Australia operations, since both would require massive investment to get going.  Obviously Better Place wants to preserve money at this moment.

On Jan 30, The Australian (see The future of electric car firm Better Place remains uncertain) described the potential for a shutdown of Better Place Australia as a “disappointment” or “heartbreaking” and described Thornley’s departure as him having “quit after a dispute with company’s largest shareholder and chair Idan Ofer.”

An article today (Feb 7) in The Australian (see Dream of electric car hits roadblock) goes into some details of the Better Place Australian operations now that its’ shutdown had been announced by Better Place.

About 25 per cent of the group’s Australian staff were made redundant before Christmas.
Better Place Australia had “posted a loss of $US64 million ($61.2m) in the last quarter and $US132m last financial year.”

Globally in excess of $850m has been spent on the concept over the past
five years after Israeli entrepreneur Shai Agassi developed the plan.
According to the San Francisco Business Journal (see BetterPlace will cease US operations, close Palo Alto office), Better Place will be completely shutting down their office in Palo Alto.  This location at one time was the headquarters for Better Place, and had 200 employees working there.  John Procter, a BetterPlace spokesman, said it was too soon to know how
long it would take to wind down the Better Place office in Palo Alto. He
confirmed there are fewer than 50 employees working there today.


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.
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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.

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