CEO: Better Place to start looking for new direction
New boss, Australian Evan Thornley, moves to Israel
The electric car company Better Place will be changing the way it does business, its new CEO, Evan Thornley, said yesterday in a letter to employees.
While Better Place still has not made any major strategic decisions regarding changes to its business model, Thornley, who recently moved to Israel, hinted at a new direction for Better Place in his letter yesterday, saying that Better Place was the only firm that could fully service the existing electric cars now being sold. He outlined a planned reorganization of the company.
It appears likely that Better Place will transform from a company that sells electric cars into one that focuses on charging services for electric cars, operating much like a chain of gas stations for the vehicles.
In the meantime, the company is waiting on a report from the McKinsey consulting firm, which is examining possible business models for Better Place. The process is expected to take about two months.
For now, Better Place has decided to continue its operations in Israel and Denmark, where it has already established charging-station and battery-replacement networks, along with a trial of electric cabs in the Netherlands. But the company is not set to enter into any new investments or agreements in other countries for now.
Better Place recently renewed its contract with Renault-Citroen and has most likely gotten out of its commitment to buy some 100,000 Renault Fluence electric cars over the next four years. The company has also completed raising $100 million from two shareholders, the Israel Corporation and HSBC.
Thornley set a number of goals for the new business plans and reorganization efforts in his letter. The main goal, he said, is to make a profit following the enormous investments made in the company and its infrastructure.
Better Place will also have a global management team with executives from various nations, as the company had when it started. In other words, Thornley is saying the domination of the company by Israelis is over, and their representation will shrink. Nonetheless, Thornley has moved here, and the company's headquarters will remain, for now, in Rosh Ha'ayin.
Just a month and a half ago, former Better Place CEO and founder Shai Agassi was ousted by the board of directors in a move that shocked most everyone outside of the company. Thornley was hired in his place.
Last week, Better Place Israel CEO Moshe Kaplinsky resigned, as did three other executives close to Agassi.
The company, which reported losses of $132 million in the first half of this year, has a negative cash flow of $104 million since January 1. The cash-starved company recently sought to raise 200 million euros from institutional investors. When that failed, it turned to investors - including the Israel Corporation - with a request for $150 million.
In the end, only $100 million was raised; after other shareholders refused to pour additional funds into the company, the Israel Corporation, which owns 28 percent of Better Place, provided two-thirds of the cash injection.
Thornley warned employees in his letter that anything, and anyone, in the company could change, and quickly - and that employees should get used to continuous change.
Thornley announced the appointment yesterday of a number of new senior managers, including Avi Yaakobi as vice president of operations, who will focus on lowering costs without reducing the level of customer service; and David Jones, who will coordinate the global cooperation with car companies and energy firms. Thornley also announced the resignations of several other senior executives.