JERUSALEM Electric car company Better Place said on Sunday it had filed a motion in an Israeli court to wind up the company, bringing an end to a venture whose battery charging network had aimed to boost electric car sales.
Better Place partnered with Renault (RENA.PA) in 2008 to create an electric car system combining charging terminals with battery swap stations to increase the range of electric cars and put an end to drivers' worries about running out of power.
It had raised more than $850 million from top-tier investors and two years ago said it was valued at $2.25 billion.
Last August, Better Place secured a 40 million euro ($50 million) loan from the European Investment Bank (EIB)- the company's first credit facility from a financial institution - to further develop its global electric car network.
But sales never took off, with just over a thousand cars on the road in Israel and Denmark, the first two countries where it began operating.
"The (gasoline-free) vision is still valid and important and we remain hopeful that eventually the vision will be realized for the benefit of a better world," the company's board of directors said in a statement. "However, Better Place will not be able to take part in the realization of this vision."
Carmakers have invested heavily in electric cars, but awareness is growing that hybrid and battery cars may not be enough to win the race to meeting rigid EU carbon dioxide emissions limits.
"This is a difficult day for all of us," said Chief Executive Officer Dan Cohen.
"Unfortunately, after a year's commercial operation, it was clear to us that despite many satisfied customers, the wider public take up would not be sufficient," he said in a statement.
The company management, he said, requested the appointment of a voluntary liquidator who would decide on how to award compensation to customers and staff and maintain the network already in place.
MUCH FANFARE, FEW SALES
Sunday's announcement came as no surprise.
With its partner Renault, Better Place committed to a production run of 100,000 electric cars for Israel and Denmark, counting on large fleets to sign up.
At the same time it developed plans to expand into Australia and then onto markets like China and the United States.
But the large-scale deals never materialized. Only about 900 of its cars are on the road in Israel, and about 400 in Denmark.
Renault could not immediately be reached for comment. In February 2008 it said Renault-Nissan and Better Place had signed an agreement "to provide the necessary conditions for the successful launch of electric vehicles."
A November earnings report published by conglomerate Israel Corp (ILCO.TA), which owns about 30 percent of Better Place, said the company had an accumulated deficit of $561.5 million with more losses expected.
The company made changes and reduced its workforce. Founder Shai Agassi was removed as CEO in October, and his successor was named four months later.
Alan Gelman, chief financial officer and head of operations in Israel, told Reuters at the time that the company knew why it was floundering and was trying to turn a corner.
"We at times were too focused on turning into a global company and expanded too fast, but we have to focus on local operations and selling cars," he said.
After a failed final round of fundraising, Better Place turned to the Tel Aviv area court.
"Revenues are still insufficient to cover operating costs, and in the light of the continued negative cash flow position, the board has decided that it has no option but to seek to make this application to the courts for an orderly liquidation of the company," it said in a statement.
Israel Corp, the largest shareholder in Better Place, said in a statement to the Tel Aviv Stock Exchange on Sunday it had decided not to inject more cash into the beleaguered company.
Other shareholders include HSBC (HSBA.L), GE (GE.N), Morgan Stanley (MS.N) and Vantage Point Venture Partners. None were immediately available to comment.
Gene Gable, a spokesman for Vantage Point Venture Partners, confirmed that the group was an investor in Better Place and since 2008. However, he said he could not disclose the amount of Vantage Point's investment in the electric car venture.
"We are not making any further comment on Better Place right now," he said. "We may have a statement later in the week."
(Additional reporting by Ellen Freilich in New York and Tova Cohen in Tel Aviv; Editing by Helen Massy-Beresford and Nick Zieminski)