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02/15/2013 09:20 AM     print story email story  

Better Place Struggling, Concentrates on Denmark and Israel News

Perhaps because of dramatically increased competition in the electric car charging market, pioneer Better Place is struggling to gain traction.

Over the past months, the company replaced its charismatic founder and is now on its third CEO and announced it would  pulling out of the US and Australia.

The five-year-old company says it will focus on its original markets, Denmark and Israel, where it has yet to sign up enough subscribers.

Better Place offers a unique approach to electric vehicle charging - instead of charging the battery, members simply swap the depleted battery for a new one, a process that takes about five minutes. Membership costs about $350 per month and is based on the number of miles driven.

“We have demonstrated that Better Place works as a concept," says Cohen. "We need to prove to our customers, suppliers and investors that we have a sustainable, scalable model. To do so we are now focusing on realizing the full potential of what we have built, and that means concentrating our resources and energy in the near term, on Denmark and Israel, where we have customers on the road enjoying our switching and charging networks."

Better Place has raised $850 million, but it's been burning through cash so quickly that last year it had to borrow $45 million to finish building out its networks in Israel and Denmark. 

Blue chip investors, such as General Electric, Morgan Stanley, and HSBC invested in Better Place, and under Agassi, its founder, the company was poised to launch in Australia, Canada, China, Hawaii and the San Francisco Bay Area. 

Electric vehicle charging infrastructure is critical for spurring  electric vehicle sales. The market is expected to grow from $355 million in 2012 to more than $3.8 billion in 2020 – a more than tenfold increase, according to Pike Research.

“The EV charging industry is still grappling with the best way to create a viable return on investment on station deployments for site hosts – an issue that will move front and center as publicly funded deployments wind down,” says senior research analyst Lisa Jerram at Pike. “At the moment, there are too many players chasing this market, and this industry is likely to see some consolidation over the next year. Companies that can weather this shakeout period, however, are likely to enjoy growing demand as the market expands.”

Unlike other charging station companies, Better Place's technology requires car manufacturers to build in the ability to switch batteries. So far, the only company on board is Renault, for its Flurence ZE Sedan. China purportedly plans to use the swapping technology and could provide a critical market in the future.

Competitors include Coulomb Technologies (now ChargePoint) with close to 11,000 charging stations worldwide, ECOtality, and big players NRG Energy and General Electric, which also have several thousand locations worldwide. 

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