New Better Place Post-Mortem Pins All Blame on Agassi’s Megalomania


A few days ago, Fast Company’s Max Chafkin published what is IMHO the most detailed and insider-informed analysis of Better Place’s spectacular collapse.

In sharp contrast to many previous analyses, which were silly regurgitations of conventional wisdom – Chafkin’s piece takes an actual look at the company itself, the implications of key decisions taken, and behind-the-scenes insight when he managed to obtain it.

Better Place Founder And Original CEO, Shai Agassi Shakes Hands With Hawaii Governor Linda Lingle In 2008

Better Place Founder And Original CEO, Shai Agassi Shakes Hands With Hawaii Governor Linda Lingle In 2008

Perhaps the best news for us EV enthusiasts is this: the “EVs to the masses” concept itself emerges largely scot-free. Rather, it is founder and CEO Shai Agassi himself who takes nearly 100% of the blame for his company’s collapse.

This conclusion, too, is in sharp contrast to the prevailing media “wisdom”, which sought to tarnish EVs with the Better Place failure (more about the company’s swappable-battery concept, at the end), and still looks at Agassi as some sort of a sage.

The list of erratic, hasty or even hair-raisingly stupid actions taken by Agassi seems to go on forever. Here’s a bite-sized selection from the article:

  • At each and every step he prioritized spin and marketing, over bread-and-butter business and logistics.
  • Over-promising and mis-reporting again and again and again, in a way that seldom had any touch with reality, and usually involved “creative math”.
  • Alienating automakers so thoroughly, that he got stuck with only one “unsexy” maker and one “unsexy” model (using Chafkin’s terms).
  • Lowballing the cost of battery-swap stations by at least 4x: over $2 million versus the official number of $500k, which hasn’t changed in company publications until its bitter end.
  • A generally reckless approach to budget and contracts, apparently because “we have so much money and are about to take over the world anyway”.
  • Last but not least: engaging in nepotism and fostering a yes-man culture with essentially zero accountability at the top – in a manner that drove away leadership figures, and denied the company some semblance of internal checks and balances until it was too late.
The Original Better Place Demo Center In Israel

The Original Better Place Demo Center In Israel

On a personal level I feel vindicated, because Chafkin’s piece largely confirms my own “pre-post-mortem” article written in fall 2012 when the bad news from Better Place started coming out. My article was based on piecing together a picture from far fewer data sources.

Cost?  Not $500,000!

Cost? Not $500,000!

In particular, I inferred the >$2 million per station estimate from the Israel Corp’s mandatory reports in Q1-2 of 2012 (Israel Corp. was Better Place’s largest shareholder, and is publicly traded). The high cost of swap stations had a huge impact: it made the difference between a company with serious problems, but that nevertheless gets into viable pilot mode – and a company that reaches that pilot literally on its last breath.

Agassi himself staunchly refused to contribute to the article, which is sprinkled with nuggets of information from disgruntled former senior employees. Some of them gave their full names. Another one (anonymously) says he tried to diagnose Agassi’s behavior, and concluded that it perfectly matched the formal definition of narcissistic personality disorder.

You might think at this point that everyone in the story just piled on Agassi. No, there’s a lot of introspection and mea culpa as well among the interviewees. Chafkin himself stops short of calling a spade a spade and explicitly blaming Agassi; rather, the reader is left to draw that conclusion.

To reiterate: in its most critical aspects the Better Place fiasco has little to do with electric vehicles per se. Rather, it is about do’s and don’ts in the world of start-ups. Start-ups usually lack money, which hampers the development of what are often great ideas and promising products. But as the Better Place story demonstrates, too much money too early can also be lethal.

The endless showering of Better Place with money, praise and open doors when they barely had a concept and really had no idea what BEVs are, has led to lazy thinking and general misbehavior at the top. It turns out that regardless of how much cash you raise, as long as you don’t have a solid product with a solid market, you haven’t got nothing. At the end of the day they did develop a product that was technically viable – but did not answer any relevant market need.

Better Place Founder Shai Agassi Was Eventually "Removed" As CEO Of Better Place By Its Board

Better Place Founder Shai Agassi Was Eventually “Removed” As CEO Of Better Place By Its Board

This is because Agassi et al. never really cared to learn who their market is or what its needs might be. Had they done that – rather than impose their preconceptions on it – perhaps they’d realize what was obvious to, e.g., BEV insiders like Nissan and Tesla: battery-swapping is a niche use case for road trips and heavy-use vehicles. Given minimally acceptable (and much cheaper) charging infrastructure, the vast majority of family-use BEVs would need to go near a battery-swap station maybe a few times a year, if that.

As a case in point, we paid an extra $2k to have a CHaDeMo quick-charge port in our Nissan Leaf. In 20 months of driving, we have used this port only a handful of times. I’m glad we have it, but you cannot build a business model around selling us quick-charging or battery-swaps. Not until there are millions of BEVs on the road.

This basic realization could have made the difference between sink and swim: while Better Place could have still waved the “unlimited range BEV” banner as a promotion message, far fewer swap-stations would have been needed, and far more cash left in hand to survive the pilot roll-out. Instead, the company went for a rapid, massive nationwide deployment in two countries simultaneously. In Israel in summer 2012, they reached the ridiculous situation where there was a completely functional swap station, crew and all, for every 20-30 Fluence ZEs on the road. Some of these stations were hundreds of kms away from the home of the nearest such vehicle.

It was a truly bizarre climax to a story that left anyone who didn’t pay close attention, completely baffled.

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8 Comments on "New Better Place Post-Mortem Pins All Blame on Agassi’s Megalomania"

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I think at least with Tesla they waiting to at least have 50,000 cars on the road in the US before they start building battery swap stations. And even then I only picture them building maybe two or three of them in a small area first before they go wide spread.

This guy here really has a lot in common with the owners of the James River & Kanawha Canal system in that they kept on under estimating the costs to build it and traffic was very light in that it went no were.

I’m sure much of that is true but I still maintain the biggest problem was a business model that people could not trust. Who wants to buy into an expensive car that locks you into paying a single provider for your fuel for the life of the car? What if they raise charging prices? What if they don’t install as many chargers & swap-stations as they say they will? What if they go bankrupt? (which they did)

He kept saying it was like the cellphone market. Well, with a cellphone the most you can lose out on is the low price of the cellphone.


Agreed. There were a lot of marketing faux-pas in the intra-Israeli scene that I didn’t go into, and that’s one of them. I just didn’t want to make the post too long. Chafkin does address that aspect.

I never understood the need or expected any great acceptance of battery swapping, and was not surprised to see this failure. Battery technology was always likely to negate the need and only coupled with a lease model would it make sense. With only a tiny share of an already tiny percentage of vehicles (EVs) this was always going to need a very long term view.

What’s not to understand? Have you seen the Tesla demo? Swapping in 85KWH of charge in 90 seconds completely destroys the “can’t refuel fast” argument.

That said, I agree that it is not necessary . . . but it would be nice if it became available eventually when the EV biz is much bigger and various standards are formed. It will be especially good for larger vehicles.

+1 to the “Battery swapping doesn’t make sense” theme. The only reason I could see battery swapping as useful is to replicate the ICE filling station model. While it might give some comfort to help bridge people into the EV world, charging at home or work makes all the sense in the world. Swapping seems complex and unnecessary. I predict that Tesla builds at most a couple of swap stations before killing the program.

Their main problem was definitely their business model. They basically formed an unnecessary middle man. The idea of battery leases, to spread out the cost, isn’t a bad one. But then that could be handled by the manufacturer directly.

When you add a middle man, you add cost to the consumer. Ironic that the supposed goal of Better Place was to reduce the costs of EVs for the consumer.

I tend to agree that the main problem was management and in particular Agassi’s megalomania.

A responsible, clear-eyed management can replace a poor business model with a better one, in time to save the company – surely with nearly $1B on hand.