Israeli electric car company Better Place files for liquidation

Israeli electric car company Better Place yesterday announced that it will liquidate the company after having spent nearly a billion dollars in the past five years, after investors refused to back the maker of green cars and owner of electric car servicing stations.

"This is a difficult day for all of us. We have come a long way in order to bring about a global vision," said, Dan Cohen, CEO of Better Place.

"Unfortunately, after a year's commercial operation, it was clear to us that despite many satisfied customers, the wider public take up would not be sufficient and that the support from the car producers was not forthcoming," he added.

Better Place, which rolled out its first 100 electric cars for customers in Israeli in 2012, today filed a motion for liquidation with the Lod district court in Israel, and for the appointment of a temporary liquidator.

The move came after investors like Israel Corp, run by the country's richest man Idan Ofer, decided against making further investments in the company's new round of fund raising.

Founded in 2007 by Shai Agassi, a former top executive at German enterprise software maker SAP, had then proclaimed that he would put around 100,000 electric cars on Israeli roads by 2010 and a majority of cars sold would be electric by 2016.

Better Place, which became Israel's best known clean-tech company, had raised over $850 million from investors like Israel Corp, HSBC, Morgan Stanley, VantagePoint Venture Partners, and Israel Cleantech Ventures and made Israel, Denmark and Hawaii as countries to test market its venture of setting up networks of charging and battery-swapping stations.

In 2008, when oil prices reached $150 per barrel and $200 per barrel, it partnered with French car maker Renault to develop and produce 100,000 electric cars.

The idea was to mass produce electric cars and sell them initially in Israel and Denmark where it would be backed up by a network of charging and battery-swap stations.

Better Place also came out with a battery leasing plan that resembled a mobile phone subscriber plan, where customers paid about $350 a month for taking batteries on rent, swap depleted batteries for a fully charged one at swap stations that would take as much time as filling gas in the car.

But Better Place was able to sell less than 1,000 cars, while its charging stations remained largely empty, which led to a management shake-up last year with Agassi being replaced as CEO with Evan Thornley, the company's top executive in Australia.

Thornley resigned after only three months over differences on how the company should be run.

Israel Corp, which owns about 30 per cent of Better Place, had said in November 2012 that Better Place had amassed losses of $561.5 million, which were expected to rise further. In February, it announced that it was winding its operations in North America and Australia in order to focus on its core markets in Denmark and Israel.

Although it tried to cut costs and reduced it workforce, investors were not convinced about its business model, which led to its failed final round of fundraising.

"Revenues are still insufficient to cover operating costs, and in the light of the continued negative cash flow position, the board has decided that it has no option but to seek to make this application to the courts for an orderly liquidation of the company," it said in a statement.

Better Place has told the court that it was seeking the appointment of a temporary liquidator and the court's help in protecting the rights of its employees, customers and creditors.

''In light of the failure to complete the company's latest round of fundraising and in the absence of sufficient resources to continue operations, we ask the help of the court in ensuring that its employees, customers and creditors can exercise their rights in the best way possible with the resources that remain,'' Better Place told the court.