Better Place Reports Loss Of $454 Million In 2012, Is “Going Concern”

1 year ago by Jay Cole 9

This Idea Has Caused The Death Of Over $800 Million Dollars

This Idea Has Caused The Death Of Over $800 Million Dollars

Ever since the Project Better Place concept was revealed to the public by its founder, Shai Agassi, in October of 2007, we have patiently been waiting for all of their venture capital money to dry up and for the company to cease to exist.

Shai Agassi, Removed As CEO Of Better Place 6 Months Ago After Only Losing XXX Million

Shai Agassi Was Removed As CEO Of Better Place 6 Months Ago Despite Building Almost Two Dozen Swap Stations And Losing Only $590 Million

However, despite endless waves of red ink splashing up against it shores, the company seemed to be able to tap endless resources to continue to live on, despite having no readily available business model, or proof on concept, to support its existence.

Now on its 4th CEO in under a year, after front-man Shai Agassi was dismissed from his role as CEO at Better place six months ago, the results just keep getting worse, and it appears they are finally running out of backers, as Israel Corp’s (the last investor-whale to be caught by BP) most recent financial report has revealed that Better Place has received a ”going concern” warning.

Rather than explain how bad things are at Better Place, or how dire their results have been to date, we will just outline some highlights:

  • $454 million lost in 2012
  • “going concern” warning
  • $812 million lost since inception
  • 2012 revenue:  $7 million
  • 2012 operating loss: $386 million

We are going to pause the “hit list” of failure here to point out that Better Place has lost $812 million dollars, while only selling 798 Fluence ZE battery swappable electric vehicles…that is over a million dollars per car (for a car that they themselves did not actually produce), while perhaps building maybe 40 functional swap-stations.

  • BP has cut 1/3 of employees in 2012, and is down to 600, with another 600 10% set to leave
  • has abandoned all worldwide markets except Israel and Demark (Hawaii charging network recently sold to OpConnect)
  • Renault has indefinitely postponed the Fluence ZE’s introduction in Australia because of BP’s failure to build swap-stations
  • 90% cash burn in 2012, from $293 million to start out the year, down to $34 million by 2013
This Concept (and a $125 million investment) Was To Eliminate All Petrol Vehicles In Demark

This Concept (and a $125 million investment) Was To Eliminate All Petrol Vehicles In Demark

Despite all these factors, and writing down the value of it’s Better Place investment (from a net investment of $293 million to $16 million), Israel Corp puts a brave face on its most recent investment of $66 million into the project…and is considering lighting some more money on fire another round of financing:

“As the lead investor in Better Place, the company is satisfied with the progress in the past few months and is positively examining a further investment in light of the fact that Better Place is dependent on continuing financing through capital or debt until it can produce positive cash flow from its ongoing operations.”

Seriously fellows?  Isn’t it time to just call time of death?

Globes

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9 responses to "Better Place Reports Loss Of $454 Million In 2012, Is “Going Concern”"

  1. Mark H says:

    Wow, that’s pretty harsh Jay. Actually, I am harsher than that. IMO, the “idea” of a battery swap is DOA. The concept dealt with the issue of long trips and customers who parked on the street and did not have access to a charger. I can however imagine a street in the future with inductance chargers that are smart and capable of billing the customer in use.

    The concept of the battery swap did not however consider those who “do” have access to a home charger and IMO did not consider how fast quick chargers would evolve. Tesla was still trying to fit the sheet metal together while providing the first generation supercharger capable of providing well over 100 miles of range in under 30 minutes with their 85kWh battery. Now Better Place is dealing with an infrastructure like going to a gas station. This is “old school”. This is the big hindrance of CNG and hydrogen (IMO) http://insideevs.com/ev-vs-ice-fuel-time/

    Just imagine where we will be with quick charging in five years? Furthermore, the concept underestimates the popularity of the PHEV.

    They might have been much better off concentrating on a single test area for $800,000,000 is just too much cash to burn. Again, infrastructure building of battery swap stations is a lot more expensive than providing public chargers “especially” when they are a supplement to your charging needs.

  2. Herm says:

    How are electric car selling in Israel?.. I think Denmark is doing well

    1. Jay Cole says:

      Juut breaking down Better Places 800-odd cars, it has about 600 Fluence ZEs in Israel, 200 in Denmark.

  3. David Murray says:

    I’ve always thought battery swap was a bad idea. It always sounds really good to people who are unfamiliar with the electric car business. Even my 7th grade science teacher mentioned the idea of battery swap back in the 1980′s. Unfortunately the reality of making a business case out of it is a whole different problem. And honestly it creates more problems than it solves.

  4. Roy_H says:

    I along with many others seriously questioned the battery swap concept when BP was first announced. I still have arguments with co-workers who when I evangelize EVs respond with statements like it won’t be practical until either 5 minute charge or battery swap is everywhere. They just can’t imagine a different model than filling up their car at a gas station. These are the type of people who thought investing in BP was a good idea.

    However, since the investment is done, and the money spent I wonder how close BP has come to completing the infrastructure in Denmark and Israel. If it is complete, or even minimally complete (that is enough swap stations to serve long-distant travelers) then it seems they could drastically reduce their work force and stop almost all capital expenses. All they need to do now in these countries is sell cars. Despite the huge losses, they should be able to scale back and run profitably.

    I really have no idea how many swap stations they have, but I imagine that for these small countries, a dozen stations would be enough. Only 2 employes required per station (1 employee for each of 2 shifts), a few employes devoted to bookkeeping, sales and maintenance would round out to about 100 total. Only have to sell about 4000 cars a year.

    Oops! I guess I went and talked myself into a corner as they are not selling any where near 4k cars/yr. Although you’d think 4k cars should be easy.

  5. Gary H says:

    While this article sounds rather harsh, I think it is appropriate given the facts. However, I do wish that it could have panned out better for the company. I can imagine it working in the right market niche, for fleets of vehicles that are in continuous use such as taxis, buses, and delivery trucks that can’t afford the downtime associated with recharging – even with L3 charging. In this specific use case, the bar is set very high for EVs to compete with conventional refueling – 30 minutes in the best case versus a couple of minutes to refill a gas, CNG, or diesel fuel tank. The Better Place model addresses this need by providing the quick turnaround. For example, I was talking to a taxi driver about EVs. Once he was done with his shift, he would turn his car over to the driver of the next shift. These cars make money only when they’re moving and 30 minutes would be an unacceptably long delay.

    For public transit, I have heard of a couple of techniques that could make electric bus operation more cost-effective than a bus with a big battery that must last the whole day. One is opportunity charging at the endpoints of each trip, when the driver has a layover and can charge for 10-15 minutes. This allows the on-board battery to be smaller, reducing the capital cost of the bus as well as reducing weight which improves the energy efficiency of the bus. The Better Place model would also work in this situation to allow smaller batteries to be used since they could be swapped out quickly throughout the day. I’d be very curious to figure out how many batteries would be needed and of what size to support this type of operation, and to compare it to an opportunity charging scenario and to a big-battery scenario – unless someone already has done this!

  6. Mimar Sinan says:

    For an >EVinsider you seem to be too harsh on the guy and the concept…

    Nobody said that it will be easy. Especially when your largest shareholder is a business man who also owns oil refineries.. From the beginning it seems contrary to the nature. Don’t forget the fact that 7 out of 10 most powerful companies in the world are fossil fuel producing, remainders tightly related to burn it, only one being unrelated (a fruit company). You wouldn’t expect them to let those kids disrupt their business, would you?

    Nonetheless, this shift has to operate and it’s already too late. Burning something to drive or generate energy must be banned other than for cooking and for heating! That’s the only way we can finish with fossils.

    Yes the energy density of fossils are a discouraging fact for not advancing the battery driven EVs, but at the same time we’ve come a long way from Lead Acid (10x for Lithium, as well as the abundance, nontoxic, recyclable nature of it) so that shouldn’t be a brake on advancing the electrification of transport.

    160 km of range is more than enough for 90 percent of drivers (other 10 percent are encouraged to continue burning whatever they like) Although, I’d prefer them keeping some of the emissions inside the car, instead of polluting outside behind the times and what lies ahead!

  7. Martin T says:

    What a surprise? Over priced and I always thought there would be a battle for those limited “charging” spots, Battery swap is a pipe dream (some of us hate leasing of any type).
    That’s why I bought a Volt – charge at home and it’s all smiles! :-)

  8. JPWhite says:

    A concept ahead of its time?

    Getting folks to buy an EV in the first place isn’t easy. Maybe a swap service will work when there is a large number of EV’s on the road and they are accepted as a mode of transport by the masses.

    As others point out here, BP’s biggest competitor is its own customers. I charge at home 87% of the time, so I consider the infrastructure to be mostly complete :-)