Better Place strategy veered off course, says former boss
Speaking to the media for the first time since Israel-based Better Place filed for liquidation at 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," he said. "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 Israel'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 taking place but also that drivers would turn 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 government, headed Better Place's Australian operations before becoming global chief executive. He resigned in January after disagreeing 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."
The company is reported to have about 1300 customers, with about 150 of the first 500 contracts in Israel taken up by employees.
Mr Thornley said head office 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 vehicles 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 ones, according to Federal Chamber of Automotive Industries figures.
Mr Thornley, who has returned to Australia, said he was exploring other low-carbon ventures for the industry. "I obviously believe in the future of electric vehicles."
Frequently Asked Questions about this Article…
Better Place filed for liquidation after its Israel-based operations failed to meet expectations. Evan Thornley said the collapse was due primarily to poor management and head-office failings — too much investment at head office instead of in the field, and a failure to mesh head-office decisions with the strengths of Australian and Danish management teams.
About US$850 million (around $885 million) was invested in Better Place by major backers including Morgan Stanley, HSBC and Israel's richest man Idan Ofer, who were sold on the vision of large fleets of electric vehicles using the company's technology.
Better Place’s business model relied on a shift to electric vehicles and volume adoption of its battery switching and battery management technology, aiming to support fleets and drivers through infrastructure and managed battery services.
Yes. The company is reported to have had about 1,300 customers, and roughly 150 of the first 5,000 contracts in Israel were taken up by employees, indicating limited consumer take-up relative to expectations.
Evan Thornley resigned in January after disagreeing with the board’s decision to close the Australian and US operations so the company could focus on Israel and Denmark. He believed leaving those markets removed upside for investors and hindered future capital raising.
Thornley warned that although the underlying strategy and economics for electric vehicles remain sound, the failure of execution at Better Place will make raising capital for similar future attempts much more difficult — a cautionary point for investors to weigh execution risk as well as market opportunity.
The article cites Federal Chamber of Automotive Industries figures showing very low take-up: this year just 42 of the 358,165 vehicles sold in Australia have been purely electric-powered, with a lack of available electric vehicles in the market given as one reason for minimal adoption.
Yes. Thornley said he believes the shift away from petrol and diesel cars is inevitable and that the underlying economics remain sound. Having returned to Australia, he is exploring other low‑carbon ventures in the industry.
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