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Fri June 14, 2013
Can Captain Sunshine Save The Israeli Electric Car Dream?
Originally published on Sun June 16, 2013 8:19 am
Captain Sunshine wears a yellow yarmulke, yellow T-shirt and a bright-yellow cape held around his shoulders with a silky red ribbon. At a recent rally of about 200 electric-car owners in Israel, he called out questions to the crowd.
"We're saying to the government and to the army," he shouted through a squawky mic, "20 percent of your fleets should be electric cars. Do you agree?"
The crowd cheered yes.
"We're saying to the finance ministry zero usage tax and zero purchase tax. Do you agree?" Again, yes. "And we're saying, of course, we would like to add renewable energy to power our cars. Do you agree?" Yes, yes, they wholeheartedly agreed.
Captain Sunshine is really Yosef Abramowitz, a successful American-Israeli solar entrepreneur. When Better Place, a much-touted, highly innovative Israeli electric car company went belly-up last month, Abramowitz saw an opportunity.
"We want to take the remaining assets of Better Place and turn it into a national project, recognized by the government as a national asset," he said. "We see it as a technology and service platform, for all electric vehicles, current and future, in the state of Israel."
Better Place broke new ground by building a network of 38 battery-swap stations around Israel. This meant that owners of Better Place cars could take long road trips without having to stop for hours to recharge. Battery-swapping represented a fundamental change in electric vehicle use, and the idea got a lot attention.
As the company was raising $850 million from investors, founder Shai Agassi did a TED talk. He appeared at the World Economic Forum in Davos, Switzerland, and was tapped as one of the WEF's Young Global Leaders. He was featured in the book Start-up Nation, which sings the praises of innovation in Israel. And customers like Chaim and Debbie Abramowitz (no relation to Yosef Abramowitz) loved the battery-swap system.
"We don't have to do anything," says Debbie, as we pull into a swap station near Jerusalem. Nobody does. We sit in the car while it's automatically raised a few inches. A mechanical system removes the spent battery from below and installs a fresh one. The process takes less than 6 1/2 minutes.
On a spontaneous day trip around scenic spots in Israel recently, the couple changed batteries three or four times.
"Never did we have a problem or concern about electrical charge because there were switch stations all the way," Chaim says.
Debbie says Better Place represented a dream, like building Israel.
"What if when this country was formed everybody had sat back and said, well, I'm going to wait a few years and see if it works?" she asks, noting she and Chaim moved from Texas to Israel during the second intifada. "I feel like the same ideological push should have encouraged people to take a risk on this.
"Israel had a chance to be an example to the world of how a country can become gasoline un-dependent."
By the time Better Place went bankrupt, it had spent most of its $850 million, but sold only around 1,000 cars. Most sales were in Israel, though the company had smaller projects in other countries, too.
Niv Elis, a business reporter with Jerusalem Post, said the numbers clearly didn't add up. He was surprised to find Israelis – from customers and employees to environmental groups and ordinary Israelis – say they were sad to see the company fail.
"You don't usually hear that people are sad that a company is going bankrupt," Elis said. "They might be upset or worried or concerned. But there was an actual sadness involved, because people had so many hopes tied up with this company and what it stood for."
Better Place car owners have now formed an association to join with Yosef Abramowitz, aka Captain Sunshine, and bid for the company's assets. If they can get a few tax breaks and a promise to electrify government fleets, they say they could double the number of charging stations around Israel, and power many of them with solar-generated electricity.
While this would be innovative in its own right, Abramowitz says the battery-swap stations would only be maintained for current users. They are too expensive, he says, and there is only one model of car that can use them.
As a potential buyer of Better Place assets, Abramowitz has been looking at the books. He says the company failed because it didn't communicate the economic benefits to customers, didn't give people enough of a deal to get them to try the car, and it overpaid many vendors. He offers one example: Better Place's customer relationship management software.
"They bought a license for million customers," Abramowitz said "A million customers and they didn't get to 1,000. And they're paying for that license for a million customers.
"We're finding out with almost every contract, that there was not an attention to detail to watch their investors' money closely."
Agassi, who was replaced as CEO shortly after cars got on the road last fall, told NPR that Better Place's problems were "more internal and government-related than macro."
He is not writing off the electric car industry yet, nor is Renault, which made the Better Place car. Captain Sunshine and Better Place owners, of course, aren't, either. They hope to be starting a new chapter in the pursuit of an electric car network in Israel by July. Or else, customer Debbie Abramowitz says only half-jokingly, she and her husband, Chaim, might soon own, instead of an innovative car, a very nice sculpture in their driveway.
RENEE MONTAGNE, HOST:
A once-promising electric car company recently filed for bankruptcy. The company, Better Place, was building a network of battery swapping stations. Instead of spending time charging up, you do a fast swap and drive away.
It spent hundreds of millions of dollars on this network, but sold only about a thousand cars. Now, the owners of the Israeli company are pinning their hopes on an entrepreneur named Capt. Sunshine to be their savior. NPR's Emily Harris reports.
EMILY HARRIS, BYLINE: Getting a fresh car battery at a Better Place station is easy. Just shift into neutral, and take out the key.
DEBBIE ABRAMOWITZ: So it's going to pick us up; it's going to move us forward. The battery is going to drop out.
HARRIS: Debbie Abramowitz bought this electric car last summer. She loves it.
DEBBIE ABRAMOWITZ: The new battery is then going to be moved into position and put in. Then the sign will say go, and we'll start the car again. And we'll have a full battery.
HARRIS: This takes six minutes, 24 seconds. Debbie's husband, Chaim, timed it. When they plug the car in at home in Jerusalem, it takes hours to recharge. The swap stations let them roam freely.
CHAIM ABRAMOWITZ: We woke up one Thursday morning, took off an hour later - no planning.
HARRIS: They drove all day, visiting scenic spots around Israel.
CHAIM ABRAMOWITZ: Never did we have a problem or concern about electrical charge because there's switch stations all along the way.
HARRIS: Better Place supporters thought the battery swap system would fundamentally change the electric car business. Instead, the company burned cash building it, but made little in return. Since Better Place declared bankruptcy, potential buyer Yosef Abramowitz has been looking at the books.
YOSEF ABRAMOWITZ: I'll give you one example: The software that they have for the customer relations management, they bought a license for a million customers. A million customers - and they didn't get to a thousand. And they're paying for that license for a million customers. So we're finding out, basically with almost every contract, that there was not an attention to detail to watch their investors' money closely.
HARRIS: Abramowitz, not related to car owners Debbie and Haim, is a successful Israeli solar power entrepreneur. He's also known as Captain Sunshine.
(SOUNDBITE OF CAR OWNERS' RALLY)
YOSEF ABRAMOWITZ: Shalom, shalom! (Hebrew spoken)
HARRIS: At a recent rally of a couple hundred Better Place car owners, Abramowitz showed up in yellow yarmulke and a silky, yellow cape. He was Captain Sunshine, laying out his save-the-company vision for the crowd.
YOSEF ABRAMOWITZ: We're saying to the government, and to the army, 20 percent of your fleets should be electric cars. Do you agree?
UNIDENTIFIED RALLY ATTENDEES: (In unison) Yes!
YOSEF ABRAMOWITZ: We're saying to the finance ministry, zero usage tax and zero purchase tax. Do you agree?
UNIDENTIFIED RALLY ATTENDEES: (In unison) Yes!
YOSEF ABRAMOWITZ: And we're saying - of course - we would like to add renewable energy to power our cars. Do you agree?
UNIDENTIFIED RALLY ATTENDEES: (In unison) Yes!
YOSEF ABRAMOWITZ: (Hebrew spoken)
HARRIS: The idea is this: With the right government support, the car owners could form a co-op, join with a few investors and buy the company cheap. They'd run it prudently, build thousands more charging stations, stations that would be solar-powered. But the revolutionary idea, the battery swap stations, would be over. Or almost.
YOSEF ABRAMOWITZ: It's not that it's over, but it's going to be limited to the current car owners and the current car. We really see a lot of the electric vehicles in the future to be a second family car, for the local errands.
HARRIS: In other words, instead of taking a road trip, you'd have to stick closer to home - just like almost every electric car. Niv Elis is a business reporter with the Jerusalem Post.
NIV ELIS: It's not the same as the sort of visionary level of Better Place, which found a way around major problems that no one else had figured out how do to. I mean, it's not a new idea to say well, let's see how much can get from renewable sources and plug that into the grid. So I don't think that it's on the same order of magnitude.
HARRIS: The next life of Better Place is in the hands of a liquidator now. Car owners - and Captain Sunshine - hope to be running it by July.
Emily Harris, NPR News. Transcript provided by NPR, Copyright NPR.