Cleantech Market Intelligence
EV Industry Better Off Without Better Place
I’d like to say I was surprised to hear that $850 million bust Better Place has entered bankruptcy, but the company’s audacious vision for electric cars was a longshot from the start. Founder Shai Agassi started in 2007 by raising hundreds of millions and quickly staffed up a global operation as the company attempted to prove that being able to swap out a car’s battery pack in minutes was a requirement for EVs to succeed. This message ran contrary to the rest of the industry’s strategy to convince motorists that EVs could be sufficiently charged for local travel through a combination of overnight home charging, public charging, and the occasional fast charge.
But as I wrote 3 years ago, the risky strategy of positioning battery swapping as a panacea (while denigrating fast charging) was not a good one for consumers, and was only suited to specific applications. For taxis or fleets, where maximizing time on the road is crucial, the extra cost of building a network of battery swapping stations could make sense. Better Place could not even gain traction in its home turf of Israel, a small country where employers purchase many of the vehicles.
Better Place could only have succeeded if multiple auto manufacturers had designed cars for battery swapping, and once it was clear that only Renault would be a partner, the implosion clock started ticking.
Beyond Battery Swapping
As owners of the Nissan LEAF, Tesla Model S, and other battery electric cars have realized, public charging, supplemented with occasional fast charging, is sufficient for most local driving needs. With Better Place gone, consumers will no longer receive mixed messages about what is required to keep EVs on the road.
Over the last few years I’ve spent hours chatting with many very bright and committed people at Better Place who were underutilized and mismanaged. Better Place failed to go beyond being an incredible marketing engine and leverage its other assets that could have increased its prospects. The company’s software and communications system, which recognizes electric vehicle driving patterns and monitors performance, could have been licensed to other EV charging companies. Despite the nearly billion dollars Better Place raised, the company made very little effort to develop an energy storage solution for its reserve battery packs, which could have generated revenue from utilities or grid operators. While neither of these options was a guaranteed success, they could have diversified the revenue stream during the years that the company was hemorrhaging cash.
We haven’t heard the last of battery swapping though. If the cost of infrastructure can be kept to a minimum, a battery swapping taxi or delivery fleet could make financial sense. That is what Slovakia’s GreenWay Project is doing, and I was encouraged by what I saw when I visited it in April. For less than $100,000 (or 20% of the cost of a Better Place location), the company has an operational swap station for replacing a delivery van’s battery pack in under 10 minutes. For battery swapping to survive, a targeted rather than a bold vision is called for.