Better Place, a service that no one needed

In the startup environment, it is a habit to talk about successes to keep our hopes alive for the future, but it is a big mistake to forget the failures of the past and not benefit from the experiences of the past. For this purpose, the Ecomotive team has collected the experiences of a series of failed startups, so that reviewing their failed stories may be a basis for the success of new startups in Iran’s startup community. This collection will be published and made available to the audience in the form of the story of failure. We review the 17th part of this series, which deals with the failure of the Better Place startup.

Better Place is an international company that provides services for charging and switching electric vehicle batteries. This company was first established under a project with the same name in October 2007 by Shai Agsi; The founder and CEO at the time was based in Palo Alto, California, but most of its planning and operations took place in occupied Palestine, where the founder and its main investors also resided. Aiming to improve the world by 2020, Eggsy attracted $700 million in capital, about a third of which was spent on setting up battery switch stations. In these stations, robots were installed that within five minutes, pulled out the used batteries from under the car and replaced it with a new battery. Also, some countries had given tax exemptions.

Better Place announced its decision to develop an electric vehicle network in occupied Palestine, Denmark and Hawaii in 2008 and 2009. The company is in talks with more than 25 other regions around the world in an effort to expand its infrastructure country by country. Australia, Ontario, Oregon and California also talked about launching the Better Place electric car network.

In January 2008, a memorandum of understanding was signed between this company and Renault-Nissan to build the first electric recharging network in occupied Palestine, by which Better Place committed to building the network and Renault-Nissan committed to producing electric cars. The goal of this company was to create a revolution in fuel consumption and remove the worry about long stops to charge the battery of electric vehicles.

The company launched its first active charging station in the first week of December 2008 at Cinema City in Pi-Glilot near Tel Aviv. Its battery switching technology started working in Israel in 2012.

But things did not go as well as expected. After spending about 850 million dollars in the company, less than 1000 Renault Fluence ZE electric cars were sold in occupied Palestine and about 400 units in Denmark. In early October 2012, Eggsy stepped down as global CEO of Better Place and was replaced by Evan Thornley, the company’s Australian CEO. In October of that year, the company announced the layoff of 150 to 200 of its 400 employees in occupied Palestine to solve financial problems.

In late January 2013, Thornley was fired and replaced by Dan Cohen. In the following, the Australian market was left out of priority so that the company could focus on only two existing markets – occupied Palestine and Denmark. Finally, in May 2013, Better Place filed for bankruptcy, first in Israel and then in Denmark, and its assets were sold for a paltry $450,000.

Better Place thought that by developing the necessary infrastructure, it could become the basis for the development of the use of electric cars around the world, but the problem of attracting customers and penetrating a large and established market like the energy market was more complicated than he thought.