The One That Crashed and Burned

Not all electric car startups end up like the infamous Tesla. A majority crashed and burned for several reasons. When you look at the supercharging stations that Tesla has plopped around the country to create a vast charging infrastructure, don’t be shocked since this idea hasn’t been brought to market for the first time.

In fact, Better Place, a defunct electric car startup, pioneered the concept. Launched in 2007 by Shai Agassi, Better Place had the novel idea to have a bunch of mass market electric cars that had the ability to swap their battery packs at charging locations. They wanted to create a refueling process similar to how normal gas cars were fueled up at a gas station.

Things were going great when they launched that year. There were some really in depth concepts created and a great Power Point pitch deck to go with the company. Better Place was raking in cash and accumulated a total of $775 million from hungry investors which included GE and Morgan Stanley.

To give you guys some context, this was around 2008 and 2009. Clean tech ideas, like electric cars were just emerging. Cash was being poured into these startups because investors felt that their money was going to better places (no pun intended) rather than into shady subprime mortgages that caused unrest in the general public. So, they kindly infused cash into these green startups that seemed promising.

And Better Place did seem promising at the time. There was great traction in Israel, where they got approval to create a full electric grid for their cars in Tel Aviv. California, Denmark, and other tech loving regions praised Better Place and committed to putting the technology into their cities.

Now, let’s get to the cars. Better Place came to an agreement with Renault-Nissan who would supply the cars while the techies would outfit them. The result was many prototypes for the battery swapping tech in the Nissan Rouge and the Renault Laguna. But the only working car was the Renault Fluence Z.E. that had 80 miles of range.

80 miles may not seem like a lot, but with the subscription based program that included all of the charging for the car itself, drivers were supposed to swap their batteries frequently in conjunction with the regular charge. The base price was $32,000 in places like Israel and $9,000 for four years of the charging subscription package, yet Better Place was running into trouble because they were still loosing money on every car that they sold.

So, the demise of Better Place. It was a culmination of factors. From the undeveloped market, to a stupidly high burn rate, and even the incompetence of the team, Better Place shut its doors in 2013. This supposed king of electric cars had its remaining assets after the bankruptcy ruling sold for a mere $475,000!

The electric car market is a vicious one, and Tesla demands respect. They have come a long way and are still going places. So, we should not overly criticize Tesla whenever it stumbles and instead remember an example of a company that was in deep trouble, Better Place.