Better Place’s Founder Still Believes in His Dream

Electric vehicles are often tagged with the word “limited,” as in, “limited range” and “limited recharging opportunities,” but this is mostly psychological. Bigger rechargeable battery packs increase range, as high as 300 miles in some cases, and the number fast-charging stations, with recharge times as little as thirty minutes, are becoming more and more common. Soon, the number of recharging stations will be sufficient to drive pretty much anywhere without having to worry about running out of charge.

Fast-charging stations make up one business model, allowing electric vehicle drivers to pay when they charge, if they have to pay at all, but does require that they take a break of at least thirty minutes. While not all fast-charging stations are free, this is certainly one way to take the pain out of recharging. Shai Agassi, founder and former CEO of Better Place, an electric vehicle company with most of its market in Israel and Denmark, has a slightly different business model.

Instead of waiting for an electric vehicle to recharge, requiring a thirty-minute wait, Better Place electric vehicles feature a battery swap system. Swapping batteries takes less than ten minutes, much closer to refueling time with a conventional vehicle. The battery packs recharge at the convenience of the battery swap station, so there’s always a fresh one on hand when your electric vehicle needs it.

Another part of the Better Place business model is battery pack leasing, similar to having a mobile phone contract. This drops the initial price of the vehicle, but requires an increased monthly payment for use of the rechargeable battery pack. Currently, Better Place’s 0.5% market share in Israel isn’t encouraging, and the company counted losses near $500 million in 2012. Better Place has swapped CEOs in an effort to revitalize, but still hasn’t turned the corner in an increasingly difficult market for electric vehicles.

Better Place founder and former CEO Shai Agassi still believes in the Better Place business model, and still owns 10% share in the company. “I don’t have an issue with the model, I had a problem with the company,” he said. Has Better Place become Agassi’s labor of love, or will the Better Place business model bear fruit before it becomes insolvent? The electric vehicle market isn’t easy, to be sure, so we’ll have to see if Better Place can increase that 0.5% in the near future.