A tough place

Dubi Ben-Gedalyahu

We don't know whether Shai Agassi went or was pushed, but he certainly chose a difficult proving ground for his electric car vision.

Was Shai Agassi removed from the post of CEO of Better Place, or did he perhaps feel that he had given all he could, and moved on of his own accord? Better Place made considerable efforts today to broadcast "business as usual", claiming that the move was a result of a joint decision.

It is impossible, however, to treat the move lightly. Since founding Better Place five years ago, Agassi has become synonymous with the company in Israel and around the world. He went from one international economic forum to another, gave interviews to the press and media all over the world to promote the vision, won international entrepreneurship awards, wove connections with investors, and raised money. His professional resumé, as a successful entrepreneur and a former senior executive at SAP, opened many business and political doors around the world. Therefore, Agassi's "move sideways" from the role of captain and ambassador, and his replacement with a relatively unknown CEO, with not pass without shock being registered in the international press, among investors, and especially at Renault-Nissan, whose chief tied a great deal of prestige and a very great deal of money to the venture.

Where is Better Place headed in the post-Agassi era? It's very hard to know. Better Place has never attempted to hide the fact that it was aiming at the big money of the global vehicle market, and that the Israeli market was not much more than a commercial pilot, a station on the road to demonstrating that the economic and technical model could be implemented. But at present, this pilot scheme is Better Place's only source of revenue for the foreseeable future, and it is refusing to get its engines going at a rate that will calm investors' anxieties.

The slow start is not down to Better Place itself. The company has managed, pretty quickly, to put in place all of the right parts of the wonderfully complicated technological puzzle of the model of an electric vehicle with a swappable battery. The battery exchange stations are operating throughout Israel, the production line of the electric car in Turkey is working, the cars are on the road, and the remote management system also works.

Translating this global vision into money, however, now depends on the good will of a handful of leasing company managers and owners in Israel who currently have problems of their own, and on the pockets of private car customers in Israel, whose outlook is among the most conservative in the Western world.

This is not the right clientele to which to sell a revolutionary, environmentally friendly global vision, nor is it a robust financial basis on which to build targets for sales, profits, and payback of investment, especially when the investment stands at NIS 2 billion.

It could be that Better Place will yet turn into a global player, and it could be that it will be remembered as another company with a brilliant idea that was ahead of its time. That's the gamble of any start up.

Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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