Better Place, Shai Agassi's revolutionary electric car brainchild based on battery-swapping service stations, hasn't actually hit the road yet, but it's bleeding more capital than ever.

On Tuesday the project's main backer The Israel Corporation reported that Better Place suffered a net $64 million loss in the second quarter, more than triple its $20 million loss in the same quarter last year.

From its founding five years ago Better Place has raised about $800 million in private capital, but over the last 10 quarters - since the beginning of 2010 - it has racked up $477 million in cumulative losses.

The $229 million that Israel Corporation has invested in the venture thus far, undoubtedly one of Idan Ofer's biggest gambles since acquiring control of the holding company in 1998, has shrunk to a carrying value of just $70 million on its books.

Better Place sped up construction of its "filling" stations during the second quarter as it burned $40 million of its fast-depleting cash resources, which stood at $131 million the end of June.

Loan from Europe

This week, however, the company reported receiving an additional 40 million euros in credit from a European bank, of which 30 million euros is earmarked for completing its network of stations in Denmark and the remainder going toward operations in Israel.

Better Place is committing to taking 100,000 Renault Fluence cars over the five years from the time its network in launched, but it has sold just several hundred in Israel so far, with another 150 sold in Denmark, according to Israel Corporation CEO Nir Gilad. Only recently has the number of cars bought by customers exceeded the number allocated to company employees. By the end of June only 500 cars had been sold.

On Tuesday, Agassi declined to say how the company would manage if it failed to meet the 100,000-car commitment. "In the agreement we have a mechanism for dealing with such an event," he said.

Agassi did say that Better Place needs to penetrate 0.5% to 1.0% of Israel's vehicle market in order for its operations to reach the break-even point - meaning 10,000 to 20,000 cars on the road - but even that goal currently seems light years away.

The company has been finding it hard to become a hit among the public. Last month it revised its pricing packages in an attempt to make the concept more appealing.

Agassi refused to specify the company's goals for next two years, but he attacked his critics, noting that the company had met its target over setting up a network in four years, with an extra six months due to "Israeli bureaucracy.

Still a start-up

"We've invested $100 million in deploying the stations, an amount equal to just four days worth of Israel's gasoline consumption, with the development of 40 battery-replacing stations, without any aid from the Office of the Chief Scientist," he said.

Still firmly in its start-up stages, Better Place earned just $2.4 million in revenues during the second quarter, as opposed to a mere $300,000 during the first quarter of the year; and $300,000 in gross profits as opposed to $28,000 in the previous quarter; with a quarterly operating loss of $48 million, 9.7% less than the operating loss in this year's first quarter, largely due to $22 million in sales, marketing, general and administrative expenses.

Gilad expressed his satisfaction that Better Place passed a major hurdle last week in proving the project's technological feasibility when an electric car completed a continuous circuit from Tel Aviv to the Golan Heights via Rosh Hanikra, then on to the Dead Sea before returning to Tel Aviv.

Agassi said the battery-replacing stations would enable any driver with rechargers at his home and place of work to travel 2,100 kilometers by changing the battery just twice. "There is no car that can travel 1,050 kilometers on one tank of gas," he said.

Gilad said the company's big test will come in 2013 once 40 service stations are deployed throughout Israel. There are currently just 22 stations, still too few for the network to be considered convenient and easy to use. For now, he admitted, "We are at the mercy of popular sentiment."

Gilad noted that Better Place has the cash resources to ride through the current period, a total of $181 million following a loan it won from the European Investment Bank this week. That is sufficient to cover four-and-a-half quarters at the company's current cash burn rate.

Gilad also pointed out that most investment in infrastructure will be completed by the end of 2012, with most of the investment to follow centered on providing financing arrangements for the Renault cars and bank loans to car buyers.