After a tumultuous year in which its founder was ousted by the board as CEO and
his replacement stepped down after only three months, electric-car company
Better Place is starting 2013 on a better note.
In January, the company
sold 102 cars, a 136 percent increase over its average monthly sales for 2012
and a dramatic improvement over its dismal December sales of just five vehicles.
The improved monthly sales, which represent 20% of the 518 total cars the
company sold in Israel last year, are the result of a new leasing
“Our target market – greenies, people with a geopolitical
agenda and technology adopters – don’t necessarily have NIS 20,000 sitting
around to buy a car,” Better Place vice president of sales Zohar Bali
While the overall price of the Renault Fluence ZE has not changed,
he said, the fact that people can now lease them with a down payment of only NIS
7,900 has broken through two barriers: the initial cost and the
“The fact that you can leave the deal after a year gave
people a sense of certainty,” Bali said. “People really connected to
Uncertainty about the company’s product soared over the past year,
when the board ousted Shai Agassi, the visionary behind the replaceable-battery
system, and replaced him with Evan Thornley, who served as CEO of the Australian
division, in October. After only three months in the position, Thornley, too,
stepped down, to be replaced by Dan Cohen, the company’s vice president of
strategy for four years.
“Listen, it’s no secret we had a big shakeup in
the last few months, and that created uncertainty and some confusion,” Bali
“But the bottom line is that our investors, from the first day to
last day, are still backing us.
“We didn’t touch the prices. What
changed, and this was a difference from the previous management, was moving from
‘visionary’ mode to ‘operative’ mode, which is now focused on customer
The company has put its international plans on hold to focus
all its resources on developing its two test markets: Israel and Denmark (in the
latter, it only sold 176 cars in the past 11 months, according to
“We were expending a lot of energy on getting the idea out to
other markets,” Bali said, adding that the Better Place vision is “a very sexy
idea, and we got carried away.”
An additional benefit to sales, he said,
is the increasing price of gasoline in Israel.
Instead of paying for fuel
to get them from place to place, Better Place customers pay the company NIS 0.55
or NIS 0.65 per kilometer for their car’s power, depending on the subscription
package. With gas prices up to NIS 7.83 per liter, only the most fuel-efficient
cars could compete.
The company still has major challenges to deal with,
including a reduced workforce.
In December, it announced plans to lay off
150 to 200 employees, which followed a prior cut of 140 workers, representing an
almost three-fourths reduction of its former 400-strong staff.
sources said the company’s reliance on just one car manufacturer, Renault, means
it has little leverage in reducing the overall price of its cars to meet market
needs. Despite the encouraging uptick, Better Place cars represented only a tiny
fraction of the 22,000 cars sold in Israel in January. As a result, Bali said,
the company remains focused on selling enough vehicles simply to legitimate its
product and business model.
“Remember, up until recently, people were
asking if it was even possible to drive an electric car with a switchable
battery,” he said.