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A leading company in electric car technology filed for bankruptcy after being mismanaged while costs spiraled out of control, according to a court filing in Jerusalem, Israel.
Israeli electric car company Better Place, which raised $800 million in a vision to revolutionize the auto industry, filed for liquidation bankruptcy Sunday, citing disappointing sales and depleted cash reserves.
The spectacular rise and fall of the company marked a blow to the image of Israel as a "start-up nation", in which hundreds of innovative new technology companies have attracted billions of dollars in capital investment worldwide.
Despite bold sales predictions, positive press and futuristic showrooms, near Tel Aviv, just a few hundred Israelis bought the specially built Renault cars, whose batteries must be recharged or exchanged as needed at company run charging stations.
"Unfortunately, after a year of commercial operation, it was clear to us that in spite of many satisfied customers, the general public would not join us and support by car manufacturers did not come," Better Place CEO Dan Cohen said in a statement.
Weak sales led to a management shake up last year when its founder, Shai Agassi was replaced as CEO. Earlier this year, Renault announced it would slow down production. Attempts to obtain additional capital failed.
“The electric car industry needs to figure out a better way for consumers to exchange their batteries, perhaps they need to install a battery swapping station at every gas station, for this to work out. Also, the price of the car was too expensive compared to a gasoline car,” Gary Day, 40, of Bronx, New York told YourJewishNews.com after learning about the Better Place bankruptcy filing.
During its heyday, Better Place, founded in 2008, attracted hundreds of millions of dollars from big investors, including holding company Israel Corp., HSBC and Morgan Stanley.