Bad management blamed for e-car stalling
The Australian former head of electric car venture Better Place, Evan Thornley, has blamed the company's failure on poor management but says the shift away from petrol and diesel-powered cars is inevitable.
Speaking to the media for the first time since Israel-based Better Place filed for liquidation over the weekend, Mr Thornley described the head office failings as his "biggest surprise. Israel is pound-for-pound the best high-tech economy in the world. Why this company didn't live up to Israel's usual standards is something I will always wonder."
Many savvy investors, including Morgan Stanley, HSBC and Israeli's richest man, Idan Ofer, pumped about $US850 million ($885 million) into Better Place after being sold on the vision of fleets of electric-powered vehicles flooding global markets.
The company's business model relied not only on such a transformation but on drivers turning to Better Place's battery switching and management technology in volume.
Mr Thornley, who made a fortune with his LookSmart internet venture before a brief stint as a Labor MP in the Victorian Parliament, headed Better Place's Australian operations before becoming global chief executive. He resigned after just three months when he disagreed with the board's decision to close the Australian and US operations to focus on Israel and Denmark.
"The business had to get scale for the [research and development] expenses to be covered and for car makers to get manufacturing scale," he said. "The problem was too much invested at head office, not too much invested in the field.
"Leaving the US and Australian markets left no upside for investors and therefore probably an inability to raise future capital," he said.
Better Place's Israel headquarters is yet to respond to Fairfax requests for comment. The company is reported to have only about 1300 customers, with about 150 of the first 500 contracts in Israel taken up by employees.
Mr Thornley said the head office, although staffed by talented employees adept at attracting risk capital, failed to mesh with the management strengths of the Australian and Danish operations, particularly in the assembly of expertise across a range of fields - from engineering to finance and software.
"I believe the underlying strategy and economics remain sound," he said. "But the failure of this execution will make raising capital for future attempts much more difficult, which is a great shame."
The lack of available electric models in the Australian market is one reason why their take-up has so far been minimal. This year, just 42 of the 358,165 vehicles sold have been purely electric-powered.