It was an ignoble end for what was one of the most animated startups in Israel’s history. On May 26, 2013, Israeli electric car network pioneer Better Place filed for bankruptcy.
But even a decade later, Better Place’s impact is still being felt. It could even be said that Better Place put vehicle electrification on the agenda of the automotive industry.
Would there be a Tesla if Better Place hadn’t arrived first?
GM, Ford, Mercedes and virtually every other automaker would commit to phasing out production of ICE (internal combustion engine) vehicles, in many cases as early as 2030 or 2035, if there had never been a better place?
And what would have happened if, against all odds, Better Place had succeeded?
“The key idea behind Better Place, when it launched in 2007, was that it will be 10 years before there are batteries that are good enough and cheap enough for mass adoption, but we have a formula to accelerate mass adoption right now” , Mike Granoff. then Better Place’s head of oil independence policy explained.
This formula involved changing batteries in minutes using a robotic “switching station” rather than plugging in for an hour or more to charge.
“People say to me all the time, ‘You guys were ahead of your time,'” Granoff said.
“No, we weren’t. Our business model was not designed to drive a wave of electric vehicle adoption like we see today among automakers. It was designed by generate this wave of making electric vehicles work for ordinary consumers, even with immature battery technology. If it had succeeded, we would be in a world where 50% of all cars would be electric vehicles, not 10% as they are now. “
Executed correctly, Granoff concluded, “Better Place would have eclipsed Tesla in impact.”
A victim of his own success
The Tesla-Better Place rivalry isn’t mentioned much these days, as one company joined the ranks of the world’s most valuable while the other became none.
But when both companies were still finding their footing, it was Better Place that was getting all the hype, and nearly a billion dollars in investment, while Elon Musk ironically “bragged” that it was so broke that he had to sleeping on friends’ couches. .
Ultimately, Tesla received a bailout from the US government, which allowed it to weather the lean times. Better Place, meanwhile, was a victim of its own success.
“We raised too much money too soon,” Quin Garcia, who built the first electric prototype for Better Place, told ISRAEL21c. “Raising too much money causes startups to reach inflated valuations and spend money differently than if they were starving.”
While one can point the finger of blame at management, the board or the business model, the company simply ran out of money and couldn’t raise more.
Calms range anxiety
Better Place came out of the gate with an innovative approach to electric cars’ biggest problem in 2007: range anxiety.
Even the best batteries of the time could only provide about 100 kilometers per six- to seven-hour overnight charge.
Therefore, Better Place built 42 switching stations throughout Israel.
You’d enter what looked like a high-tech car wash, where your car would be lifted onto a platform and a robot would unscrew a panel, remove the dead battery and replace it with a new one.
All this in five minutes, basically the same as filling up with gas.
Battery swapping made sense in 2007, and to some extent it still does. For most EV drivers, Granoff said:
there’s no point in spending tens of thousands of dollars for a bigger battery that will give you longer range, but that you’ll only use once or twice a year.
This has made electric vehicles with large batteries, such as Tesla’s, unaffordable for most. But by separating the battery from the car (Better Place owned the battery, not the driver), the economics began to work in favor of consumers.
Exchange
Battery swapping hasn’t gone away entirely. Automaker NIO is building mobile battery-swapping stations for its cars in China. Ample, based in San Francisco, is following a similar strategy in the US.
But battery swapping has caught on mostly in the micro-mobility sector.
Taiwan’s Gogoro has built hundreds of battery-swapping “vending machines” that allow e-scooter owners to change their batteries by hand. India’s Battery Smart is taking a similar approach for scooters and coaches, 35 percent of which are now electric, says Pulkit Khurana, the company’s CEO.
Even Tesla briefly tested a battery-swapping model.
A month after Better Place went belly up, Musk announced that its high-end models would have a swappable battery option. Musk even demonstrated a 90-second battery swap on stage and built a prototype switching station between Los Angeles and San Francisco.
Drivers gave a lukewarm response to the idea, and Musk told shareholders and investors in 2015 that “Clearly, it’s not very popular.”
Better batteries
Today, however, it doesn’t matter much, at least for electric passenger vehicles.
That’s because battery chemistry is improving.
All sorts of alternatives to today’s standard lithium-ion batteries (for some reason, they all seem to start with the letter “S” – sodium, sulfur, salt, silicon and solid state) are proposed that offer better performance and a longer range. and faster charging.
Israeli startup StoreDot, which is currently adding silicon to its battery mix and plans to move to solid state, promises that just five minutes of plugging into a charger can give an electric vehicle an extra 100 miles of range .
US-based Sila, which also uses silicon in its battery chemistry, has raised $1 billion and signed Mercedes as a client.
Ford offers two types of batteries: standard lithium-ion and lithium phosphate which, while offering a slightly shorter range per charge, are also 30-40% cheaper than standard chemistry lithium ions
Is this the development, rather than switchable batteries, that will bring electric vehicles to the masses?
moving forward
Meanwhile, former Better Place executives can be found at mobility startups, established companies like Tesla, Uber and General Motors, and investment firms in both Israel and Silicon Valley.
- Mike Granoff now heads Tel Aviv and New York-based Maniv Mobility, which invests exclusively in mobility startups.
- Quin Garcia is doing the same from Silicon Valley with his Autotech Ventures.
- Former Better Place CTO Barak Hershkovitz is the executive director of software-defined vehicles, energy and connected mobility services at GM’s Israel operations.
- Avi Jacoby, former COO of Better Place, is now the CEO of Fabric, an Israeli startup that aims to revolutionize online fulfillment processes.
- Jelle Vastert joined Tesla and managed its fast charging deployment in Europe.
- Jeff Miller led autonomous vehicle business development at Uber.
- Carlo Tursi also went to Uber and ran its operations in Italy for several years. He now leads an eVTOL (electric vertical takeoff and landing) airport infrastructure startup.
The charismatic founder and CEO of Even Better Place, Shai Agassi, who was fired six months before the company filed for bankruptcy, fell flat on his feet; he is now president of Makalu Optics, which builds lidar systems for autonomous vehicles, drones and robots.
“500 mobility startups were formed in the years after Better Place,” noted Mike Granoff. “I’d like to think we inspired some of them.”
Saul Singer, co-author of “Start-up Nation,” is not convinced.
“Is there a ‘Better Place Mafia’ like there’s a ‘PayPal Mafia?'” Singer asked, referring to the exodus of influential rainmakers from one company, PayPal, to to the great technological ecosystem. Elon Musk of Tesla, SpaceX and now Twitter; Reid Hoffman who co-founded Netflix; and billionaire investor Peter Thiel are among the online payment service’s most illustrious alumni.
A more appropriate – and closer – parallel would be the Lavi project.
The Lavi was Israel’s attempt to build its own warplane to compete with the American-made F-16. The program was shut down in 1987, but the 5,000 scientists and engineers who had been working on the state-of-the-art aircraft were now free to fuel the country’s high-tech boom in the 1990s. Many former Lavi employees were re-employed by the Arrow anti-ballistic missile program. Others helped Israel launch its first satellite into space in 1988.
“Better Place, however, may not have been large enough to produce a Lavi effect,” Singer speculated.
Dan Cohen, who served as CEO of Better Place in 2013, disagreed.
“It is absolutely fair to say that Better Place contributed to creating the attention and attraction of young and more experienced talent to invest and develop the sector,” he says. Furthermore, “the fact that so many people are following Better Place’s story a decade after it closed is a testament to its impact.”
An area where clearly the crash of Better Place he didn’t Helping was the adoption of electric vehicles by local consumers: it has taken Israelis most of the past decade to get over the Better Place debacle.
But the curse seems to have finally been broken: in the first quarter of 2023, almost 20% of new car sales in Israel were electric.
Better Place’s story, despite its accidental ending, also fits well into the Israeli narrative.
Better Place’s collapse is actually “a good example of how Israelis have a tolerance for failure,” Singer told me for Total, the book I wrote about the rise and fall of Better Place. “We don’t hide them. We get up, strip down and do the next thing.”
This is echoed in the letter Granoff sent to investors when the bankruptcy was announced.
“I regret not being able to bring the company to the glorious success it deserved, but I don’t regret trying.”
RIP Better Place. Long live electric cars.
