Better Place Hoping For a Better Year

After a difficult year in which its founder was ousted by the board as CEO and his successor resigned after only three months, Better Place may be bottoming out. At least, that’s what the company’s top executives are saying.

In January, the company sold 102 cars, a 136 percent increase over its average monthly sales for 2012 and a dramatic improvement over its cataclysmic December sales of only 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 arrangement.

Better Place vice president of sales Zohar Bali articulated the firm’s new market insight: “Our target market — greenies, people with a geopolitical agenda and technology adopters — don’t necessarily have 20,000 shekels sitting around to buy a car.”

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 7,900 shekels has broken through two barriers: the initial cost and the uncertainty.

“The fact that you can leave the deal after a year gave people a sense of certainty,” Mr. Bali said. “People really connected to it.”

Uncertainty reigned over the past year, after the board forced out 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. But Thornley was himself 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,” Mr. Bali said.

“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 service.”

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 Globes).

The rising price of gasoline in Israel should also help their cause.

In cost-cutting mode, the company has reduced its 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 staff of 400.

Industry 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, Mr. 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.

This article appeared in print on page 7 of the February 4th, 2013 edition of Hamodia.