A key American investor in Better Place, the electric car company that went bust six months ago after being hailed as the hope for the future, says the Israeli government has shown complete “incompetence” in the aftermath of the crisis and is grossly out of touch with trends in the rest of the world.
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Breaking months of silence since the highly publicized collapse of Better Place, Michael Granoff, the founder of Maniv Energy Capital, told Haaretz he fears that Israel will be the “last country in the world” to develop a viable electric car industry.
“It’s absolutely astonishing to me,” said Granoff, whose New-York based investment group was the first to invest in Better Place and who was largely responsible for putting together a consortium that raised $700 million for the electric car company. “The government of Israel and the prime minister have repeated and boldly identified oil dependence as a problem they want to address and solve. But every other government in the world and all the automakers and experts have reached a completely different conclusion than the government of Israel. Their conclusion is that encouraging electric cars is the best way to reduce oil dependence, and they’re adopting increasingly aggressive policies to promote this objective.”
Granoff, who has several other interests in the alternative energy and clean technology space, said he’s aware he will be accused of “sour grapes” because of his involvement in Better Place, but “the fact is that everywhere else in the world, government are spending money, giving tax incentives and encouraging the deployment of infrastructure to promote electric vehicles, whereas in Israel, the government seems content to allow hundreds of millions of dollars to evaporate.”
In his estimation, the huge amounts of private investment poured into the Israeli electric car industry through Better Place, as a percentage of GDP, are far beyond anywhere else in the world.
Better Place, which developed and sold battery-charging and battery-switches services for electric cars, filed for bankruptcy last May, after it failed to reach the market penetration rates predicted by its founder Shai Agassi, who was ousted in October 2012. Less than 1,000 Renault electric cars have been sold in Israel through Better Place. Two post-bankruptcy attempts to purchase the company in recent months have fallen through.
Granoff said government tax policy played a key role in the company’s downfall. “The most perverse thing was the usage tax imposed on drivers of fleet vehicles, which make up the majority of cars in Israel,” he noted. “There’s a discount for hybrid cars but not for electric cars. This became a huge issue.”
Granoff, who said he is planning to write a book about the rise and fall of Better Place, is spending the year in Israel with his family. Aside from his investment activities, he is a founder of Securing America’s Future Energy, a Washington D.C.-based advocacy group and has served on the boards of several non-profits.
Besides being a major investor in Better Place, Granoff held the position of head of oil independence policies at the company.
He was “astonished,” he said, when he learned that the Prime Minister’s Office was co-hosting an international conference with the Bloomberg news organization this week on alternative energy sources. “They’re talking there about how Israel can reduce its reliance on oil by 60 percent by 2025 with hardly a mention of electrification.”
By all accounts, said Granoff, Israel is the ideal candidate to embrace electric cars because it’s a country that’s both small and has high gasoline prices. “Twenty-five makers of electric cars will be in the market by 2014, and I don’t know of one that plans to sell in Israel,” he said. “It’s a total anomaly. The only electric cars in the country today are the thousand Renaults that Better Place bought. When you look at the U.S., which does not have a manageable geography as Israel does and where gasoline is half the price, they’re selling electric vehicles at a pace of 50,000 a month now.”
Asked who was ultimately to blame for the downfall of Better Place, Granoff said: “I’m saving that for the book, but the best answer I can give now is that the government is not primarily to blame for what happened. The fundamental issues were internal. There were mistakes that were made by individuals and so forth.” Still, he noted, not only didn’t government policy help, but it hindered the development of the company.