No Better Place: How the battery swap idea lost its charge

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Better Place, the proponent of a battery swap network, once valued in its billions, says it is about to file for insolvency.

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Better Place, the electric car network operator that aspired to transform the world’s car industry within a decade, is about to file for liquidation – an apparent victim of wanting to do too much, too soon, or just not doing it very well.

Report of the decision to liquidate the pioneer of battery swap electric vehicles circulated over the weekend and were confirmed late Sunday, Australian time, by the board of directors of its major shareholder, Israel Corp.

“Since we could not find the right investors to partake in a significant proportion of the additional investment, Better Place will submit an application to the court regarding its liquidation,” the company said in a statement.

The decision comes just months after Better Place abandoned plans to open a network in Australia (following an earlier decision to abandon the US), and to focus on small networks in Israel and Denmark. The Australian operations were folded earlier this year, following a dramatic period in which company founder Shai Agassi quit as CEO and his replacement, the Australian CEO Evan Thornley, last only a few months.

Investors and insiders suggest the call to liquidate was inevitable once the decision had been made to focus on two small markets. Reports suggested that the company was $560 million in debt, a situation that was unlikely to be recovered by operating in such small markets. A recent fund raising also failed.

Agassi had once predicted that the world would see a billion electric vehicles by 2020, but by the time it folded it had succeeded in having only attracted 1,300 EVs to its own networks.

“If we’re right we’ll get there fast, and if we wrong we’ll have to wait a year and then get there fast,” Agassi said at the time. “It doesn’t really matter, it is an inevitable conclusion. It is a curve and if you sliding down that curve you will get to that point.”

Agassi was dismissive of the push into hybrid vehicles, saying it was like investing in a fax machine at the onset of computers. For the moment, at least, it looks like the fax machine has won.

The idea of a battery swap network and the philosophy behind it was seductive, and attracted some of the biggest and most progressive companies in the world to invest total of $850 million. They stand to lose the the lot. They include GE, UBS, VantagePoint Venture Partners, Lazard Asset Management, Morgan Stanley, and Agassi himself.

In Australia, where the company once aspired to raise $1 billion to create its network but only raised $25 million before its withdrawal, investors included Lend Lease, Actew AGL, the RACV. The company also tapped high net worth individuals.

better placeSupporters argue that the model could have worked, but for poor execution. The battery swap technology (pictured right), which was proved to change  a battery in a car in less than one minute, was designed for convenience  and to address anxiety about range performance – and to focus on large   and often used vehicles.

But the company baulked at opportunities in the two countries that could have demonstrated its natural advantage over conventional EVs and the attraction long distance electric vehicle driving, Australia and the US.

The idea was to sell a vehicle at relatively low price, and strike a leasing arrangements over batteries that would deliver cheaper (and cleaner) driving over the life of the vehicle.

Back in 2009, just two years after the company was founded, Agassi told this reporter that the oil price was headed to $200/barrel. In the end, the oil price hasn’t much moved, and while the cost of batteries has fallen, it hasn’t provided the galvanizing impact that a rising oil price could have done. Ford Australia, for instance, signaled its demise a little over a week ago. It was still hopeful of producing large petrol guzzling  cars right till the end.

Ironically, Better Place made a battery swap demonstration model of the Ford Territory, but Ford Australia did not take up the offer. Better Place encouraged a group of investors to form EV Engineering build 7 demonstration models of an EV Commodore, in the hope that Holden would take up the offer. (Renault was the only car company to commit to a battery swap model with its Renault Fluence).

The experience with the Commodore proved that such vehicles could be built – on the same production line – and deliver excellent performance. All they needed was a network.

Now that they don’t have a network, the future of the EV Commodore will be in a different form. EV Engineering has now entered into a joint venture with AxiFlux, which has developed a proto-type electric motor, and wants to use those vehicles to demonstrate its new product.

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10 Comments
  1. Bob_Wallace 6 years ago

    I’ve long thought that Better Place wasn’t getting industry support because car manufacturers were fairly sure that higher range batteries were not far off.

    If we have 200 mile range EVs that can charge 90% in less than 20 minutes then we don’t need swapping. We just need rapid chargers along our major travel routes.

    Rapid chargers and swap stations both need very large grid connections. There’s no savings there. But swap stations need the changing mechanism, storage space and a large supply of expensive batteries.

    • MorinMoss 6 years ago

      Swap stations can earn money acting as grid storage – it was part of the Better Place vision for both the cars & the stations to be V2G-capable.
      A single Tesla-style SuperCharger is 90 kW and they might implement one that’s 250 kW. It won’t be practical to have too many of either of those in your average neighborhood so they’ll probably be only along highway routes.

      Agassi claimed that a swap station with 12-24 batteries could support 2000 cars, assuming they also charged at home and had access to charge spots at work and popular public sites – which was part of the paid service.
      You were also supposed to get a reimbursement if you exchanged an empty battery more than a certain number of times per month (or year?).

      Now there’s talk that Tesla will announce battery-swapping in the very near future.
      I’m doubtful but apparently Elon has spoken about this before and the flat-pack floor battery of the Model S may allow it if it’s not too tightly coupled to the frame and if the cooling mechanism doesn’t interfere.

      • Bob_Wallace 6 years ago

        Well before the S appeared it was stated that battery swapping would be designed into the vehicle. How Elon sees this playing out in the real world waits to be seen.

        If you could drive 200, 180 and 180 with two <20 minute stops I doubt swapping is going to be needed. With a gasmobile most people are going to stop once to pump gas and once to eat on a 500 mile driving day.

        If you can pull up to a rapid charge point, plug in, and get out to eat/pee, check your messages or walk the dog I doubt many would feel inconvenienced. Especially since they won't be spending one of their stops standing at the gas pump.

        Imagine a system where there are three cords per charger. You would be able to plug in and not need to leave for almost an hour if you wanted some extra meal time. The system would charge the first car connected, move to the second, etc. It could phone you that you have 5/10 minutes to move your car in order to let someone else plug in and after that start charging for parking (at a high rate).

        • MorinMoss 6 years ago

          If Elon was thinking about battery swap that far back, I wonder why he didn’t cut a deal with Better Place. Agassi has said from the beginning that the swap stations were capable of handling multiple battery formats.
          Even if Musk wasn’t ready to do it with the Model S or X, a partnership with Better Place could have been the kickstarter for a network of swap stations all over California.
          I’m sure I saw Agassi present a map of possible placements of swap stations to cover most of California back in 2009.

          • Bob_Wallace 6 years ago

            I really don’t know what is happening, but how about this idea?

            The next major goal for Tesla is to make an EV for “everyone”. Something that could sell close to the Camry level or not too many thousand dollars more.

            What if they sold a ~100 mile range model for a reasonable price and then owners could rent another same size or larger battery pack for long trips? You could get close to the 300 mile highway range and swap in a second pack for a 500 mile driving day.

            You’d keep those extra batteries only during your drive. Return them at your destination and pick up a new set for the drive back when the time came.

            Battery renting might not cost more than gas for a 30 MPG gasmobile.

            Battery swapping in the S might just be a way to develop the system and get the bugs out.

            Tesla could go head to head with Nissan with a long range rental advantage.

          • MoreBikesPlease 6 years ago

            EVs have huge bulky batteries, like hundreds of kilograms. I doubt that a car chassis could reasonably be designed to fit a second one in.

            For the occasional long trip I like the idea of hiring a hybridizing trailer like the “RAV long ranger” :
            http://www.evnut.com/rav_longranger.htm.

  2. Lee Nhan 6 years ago

    I’ve long thought that ,My new method http://www.trongdong.weebly.com With characteristic continuous operation should not need expensive storage systems and cumbersome

  3. MoreBikesPlease 6 years ago

    I was always sceptical of the battery swap model. Most car trips in Oz are short, so all you need most of the time is a charger at home and perhaps at work.

    That leaves the less- common country trips. Eg Albury/Wodonga between Melbourne and Sydney. Now, how many batteries, chargers and swap stations do you set up there? You have to cater for the Christmas holiday rush.

    If you skimp, you’ll have a queue of cars down the highway waiting for a swap spot, or for a charged battery. Terrible publicity! But on the other hand over-building is costly.

    I reckon electric cars will take off initially for multi-car families with a garage. The electric car does the short trips; range anxiety is no problem since the family does their long trips in the other car.

    • Ronald Brak 6 years ago

      We don’t even need a charger at home in Australia, our standard current is powerful enough to charge any normal electric car overnight. And, as was pointed out to me a while back, Australia is infested with caravan parks with three phase power and so we have a primitive EV charging system already in place. If Better Place had made battery swapping cheap enough so that it was the most economic option for taxis, then they would have had a built in market in every city and could have used that as a base to expand from. But they didn’t manage to do that and so every taxi I see is either LPG or a hybrid Prius. If anyone else tries battery swapping I’ll only expect them to suceed if it’s a no brainer for taxis to use their service.

      • MoreBikesPlease 6 years ago

        Yeah, I’ll only buy an electric car if it can be charged from a normal powerpoint as an option. The blade electron can, and I think the Holden Volt too.

        Good point about the caravan parks! That should be a nice extra money spinner for them.

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