Better Place's and new CEO rewriting business plan under orders from Israel Corp
Last months ouster of Better Place founder Shai Agassi has been followed by other turmoil, including the ouster of Better Place Israel CEO Moshe Kaplinsky, other departures, a large layoff, and on Wednesday a threat from Better Place's major shareholder, Israel Corp, to cut off funding. Reportedly the new CEO, Evan Thornley, is hard at work with a consulting company crafting a new business plan that is to be presented before the Israel Corp board in December for approval.
Better Place was founded in 2007 with the vision of enabling widespread adoption of electric vehicles by offering a battery pack exchange service. Such a service replaces a depleted battery pack with a fully charged one within a couple minutes. This allows electric car drivers a usage model similar to gasoline cars, because the driver refuels during a short stop at a service station rather than with a long wait at a charging station.
The company's service of course requires automakers to construct electric cars compatible with the Better Place quick battery pack exchange stations. The only company to do so is Renault, with their Fluence ZE. The Better Place service has rolled out in Israel for general use, and in Amsterdam as a taxi service. In October, Better Place was the indirect recipient of a grant to launch an electric taxi service in the SF Bay Area, and has tapped Coda Automotive to provide six electric cars for the first phase.
In other words, it is Israel that is the main venue for Better Place to prove (or disprove) its business proposition. Going by the results, the potential customers are not buying in, sales are weak, the management team is being replaced, and a new vision is being crafted.
In late October, it was announced that half of Better Place Israel's staff was to be laid off. In mid-November Kaplinsky and several others left Better Place Israel. While Kaplinsky, a former Major General, is apparently mulling entering politics the context of his departure suggests an ouster.
The Israel Corp owns 28% of Better Place, and Idan Ofer, controlling shareholder of Israel Corp., directly holds another 8% of the shares and serves as its chairman. The Israel Corp has invested over $229 million into Better Place, and recently added another $67 million matched by an additional $19 million from Ofer. The Israel Corp is however worried over when Better Place will start turning a profit. Haaretz reports on Wednesday that Israel Corp is demanding a new business plan by the end of the year, or they will stop injecting money into Better Place.