Israeli electric car firm Better Place, which hoped to revolutionize driving habits in Israel and worldwide, officially filed for bankruptcy with the Central District Court on Sunday morning.
“This is a very sad day, on which our efforts to realize a universal vision to cut energy dependence on pollutants failed,” the Better Place board of directors said in a statement. “Unfortunately, the path toward realizing that vision proved difficult and we encountered many obstacles… [with the] technical aspect we were successful, elsewhere we were not, despite the investment of tremendous effort and resources.”
No investors had been found to participate in the next round of financing for the ailing company, according to the controlling shareholder in Better Place, Israel Corporation, which also declined to further invest in the electric car company, Globes reported on Sunday.
According to the report, Better Place would need another four years and a $500 million investment to potentially break even.
“Unfortunately, after a year in the commercial stage, we realized that despite the great customer satisfaction with the product, we weren’t well-enough received with the general public and didn’t get sufficient support from car manufacturers,” the board said.
The company’s decision to file for bankruptcy followed a long series of blows and setbacks to its business model, among them the dramatic departure of its founder and CEO, Shai Agassi.
Earlier this month, Better Place suffered a blow when Renault CEO Carlos Ghosn said in an interview that the company would dramatically slow its production of electric cars with swappable batteries — the kind of cars Better Place has built its business on.
Going forward, Ghosn said at the time, the company would continue producing vehicles with swappable batteries in the countries where they were currently marketed — Israel, Denmark, and Portugal — but only if there was demand.
Last October, entrepreneur Agassi, who started the company, stepped down as CEO and resigned from the company’s board, amid layoffs that cut the number of its employees in Israel and worldwide by more than half.
In April main investor Israel Corporation reported that the company had lost $454 million in 2012 alone, with just $7 million in revenue in 2012 and an operating loss of $386 million. Better Place was also issued a “going concern” warning, meaning that its viability could not be guaranteed past the next year.
In the company’s five years of existence, it has lost nearly $800 million, and it burned through 90% of the cash it had at the beginning of 2012 — ending up with just $34 million, after starting the year with $293 million.
In its original overview, Better Place had hoped to be selling hundreds of thousands of cars a year in Israel by now, produced by Renault-Nissan, its manufacturing partner. It was betting that the electric-powered vehicles would prove attractive based on cheaper cost, comparable acceleration, similar speeds, and environmental advantages over conventional gas-guzzlers.
It planned a nationwide network of plug-in “charging spots” and battery swap stations. It also touted partnerships developing in France and the US, harboring particular hopes of an electric car revolution pushed by the Obama administration.
However, Better Place had sold barely 2,000 vehicles. According to its agreement with Renault, the company was supposed to sell 115,000 by the end of 2016 — and was subject to major fines and penalties if it did not.
Yifa Yaakov and David Shamah contributed to this report.