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Israeli EVs Moving On to a Better Place?

The darling of the electric vehicle industry, the Israel-based Better Place, is struggling to stay afloat. Despite having raised a staggering total of $850 million from investors like HSBC and General Electric, the EV start-up has only sold 750 cars and has posted losses of $500 million. The firm’s founder was forced out last October, and its CEO jumped ship in January.

One of the reasons so much enthusiasm (and capital) has flocked to the firm is that its core idea really does sound like a promising, innovative twist on the basic electric car model. As Yale’s Environment 360 blog reports (h/t Alex Tabarrok):

The Better Place solution is to literally separate the battery from the car. To make refueling convenient, Better Place invented automated battery-switching stations; they deploy robots that slide under the car, remove a depleted battery, and replace it with a fully charged one in about five minutes. These battery-swapping stations work faster than chargers; the company has built 37 of them across Israel. By retaining ownership of the battery, Better Place is able to reduce the sticker price of the car, and upgrade the battery as the technology improves.

Israel seemed like the ideal place to grow an EV start-up. Like Estonia, it’s a small country with a high population density. And Israelis have very real political and security reasons for finding an alternative to Persian Gulf oil. But the consumer traction just isn’t there yet.

Part of the problems the firm has faced may be due to mismanagement by the founder, the Financial Times says. And part of the problem may be that civic virtue is not enough of a motivator to overcome the inconvenience of dealing with an underdeveloped recharging infrastructure when gas stations are ubiquitous. (Tesla has attempted to address this by building high-performance cars which are desirable in their own right, with green virtues as a secondary motivator. But even they are struggling to make their charging network convenient.)

Better Place has blamed a lack of Israeli government support for its troubles, and there may be something in that complaint. The company reportedly came up against some local obstacles to setting up their recharging network—obstacles that a light touch from the central government could have smoothed away.

But it strikes us a wise policy that the Israelis weren’t more actively or directly subsidizing the technology, as the U.S. and Chinese governments have done with the solar industry. If Better Place is ultimately rejected by consumers and the markets, at least taxpayers won’t be left holding the bag.

[Electric fueling image courtesy of Olga Besnard/Shutterstock]

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