Israeli EV Company Better Place Reports Millions In Losses

Better Place is not doing as well as everyone expected, with financial losses running in the millions.

The idea seemed flawless: battery-powered cars that could run on 100% electricity and could be recharged almost instantly by swapping batteries at special charging stations. But despite all the optimistic predictions, Better Place, the Israeli company that has been trying to build the world’s first operational infratructure for electric vehicles (EV), has been facing a series of obstacles in moving ahead with its technology.

Israel Corp., which holds 32% of the company’s shares, reported that Better Place lost over 1.5 billion NIS ($433 million) since 2009, 760 million NIS ($204 million) of which was lost over the course of 2011 alone, and deployment of battery recharging and swapping stations has been delayed in both Denmark in Israel from the scheduled date this April to the summer.

Heavy spending

Better Place has secured millions in funding from private investors around the globe and has been spending heavily in the last few years as it attempts to build complete EV infrastructure in Israel and Denmark that will include not only battery swapping stations for long distance travel but also hardware, software, installation mechanisms, and charge sports in parking lots, urban centers, offices and residences to support use of EVs.

The company has also been spending on research and development as it prepares to bring its EV to the Israeli market later this year. They are already being sold in Denmark with Renault that is directly marketing the vehicle.

Better Place hopes that once its EVs are sold in Israel later this year–the company estimates it will sell 4,000, according to Ynet News–it will see major returns on investment. But prospects for EVs are dim these days as initial excitement for the product has waned and been replaced with concerns over cost and range of the battery-powered vehicles.

Waning interest

An IBM report released last November found that consumers are generally not interested in paying a lot of money for a car that they think will drive only short distances. Even if batteries have higher mileage now than they used to, EVs are perceived as impractical and an unattainable purchase for the middle class.

Israel Corp.’s report found that Better Place’s sales have matched those bleak predictions. Better Place was expected to sell 115,000 electric cars in Denmark and Israel between 2011 and 2016, but the company is far behind those numbers.

In Denmark, Renault has been mostly selling the Zoe model which is more compact than the Fluence sedan EV, and has announced that it will stop selling swap-in battery cars and only sell the permanent battery cars and those are considered more practical on the market.

Meanwhile, Better Place’s flashy futuristic recharging stations have mostly been sitting idle in Israel and Denmark. Globes reported that the Danes have been using the spots as ashtrays, something Better Place has had to publicly ask them not to do.

Image via: Hakan Dahlstrom

More on Better Place:

Better Place Puts 100 EVS on Israel’s Roads
Danish Council Rejects Blue Better Place Chargers
Better Place Unveils its Mammoth Recharging Plan