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TheStreet Open House

Israeli Electric Car Company to Fold

By Aron Heller

JERUSALEM (AP) -- Israel's trailblazing electric car company Better Place announced Sunday that it is shutting down, less than six years after unveiling an ambitious plan that promised to revolutionize the auto industry by reducing the world's dependency on oil.

Better Place was perhaps Israel's best known clean-tech company and a leading symbol of its "startup" nation status. Israel, along with Denmark, was the company's test market for developing nationwide networks of charging and battery-swapping stations that it hoped would eventually spread globally. But the company experienced repeated delays in getting off the ground and experienced weak demand for its cars after burning through millions of dollars.

The announcement that the company was filing for liquidation comes less than eight months after the company's founder, Shai Agassi, was forced out. The project won the support of President Shimon Peres, received generous financial incentives from the Israeli government and made Agassi a dynamic celebrity CEO.

The company's vision of drastically reducing oil dependence, cutting carbon emissions and blazing a trail for more environmentally friendly means of transportation won it worldwide praise and high-profile endorsements from such people as former President Bill Clinton. But it also faced skepticism from industry insiders who warned of technical pitfalls, like limited battery range.

In a written statement, the company's board of directors said the venture's intentions were still valid but the execution had faults along the way.

"This is a very sad day for all of us. We stand by the original vision as formulated by Shai Agassi of creating a green alternative that would lessen our dependence on highly polluting transportation technologies," the company said. "Unfortunately, the path to realizing that vision was difficult, complex and littered with obstacles, not all of which we were able to overcome."

When reached by The Associated Press, Agassi declined to comment Sunday.

Better Place raised some $850 million from investors, including General Electric Co. (GE) and HSBC Holdings PLC (HBC) and the European Investment Bank. Israel Corp. (ILCO), controlled by billionaire Idan Ofer, was the largest shareholder in the venture.

In Israel and Denmark, the networks are almost complete, while the company also has operations in Australia, the Netherlands, China, Hawaii and Japan.

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