Better Place Turning to Leasing Companies to Dump Overstock of Cars

Beleaguered company has four months to sell of some vehicles to avoid having to register them in its own name.

Daniel Schmil
Daniel Schmil
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Daniel Schmil
Daniel Schmil

In a concerted drive to deplete its stock of hundreds of new electric-powered cars, Better Place has embarked on an aggressive marketing campaign following months of stalled sales. Some of the cars – those that arrived in May 2012 – need to be sold within four months for the company to avoid registering them in its own name and marking them down as used vehicles.

Some 700-800 cars are sitting at Ashdod Port and at the bonded car lot belonging to Carasso Motors.

Better Place has therefore set out on a promotion for leasing the cars to leasing companies, which in turn will lease them out to private customers and vehicle fleets. Albar, the first leasing company on board, is charging just NIS 1,500 per month, much less than the typical NIS 2,200 monthly cost for a leased family-sized car than runs on gasoline.

The effort has shown some measure of success. Albar has sold 30 vehicles since starting a week ago, a significant improvement over the five cars delivered by Better Place during all of last month.

The company intends to offer similar deals to Eldan, Hertz, and Lease4U. Battery charging and replacement services are bought directly from Better Place at 55 or 65 agorot per kilometer, depending on usage.

Meanwhile, TheMarker has learned that Israel Corporation's Chinese automaker Qoros, a sister company of Better Place, has scrapped its plans to produce electric cars equipped with replaceable batteries because Better Place wouldn't commit to ordering the cars.

One of Better Place's main disadvantages is selling only one model, the electric version of the Renault Fluence, which is starting to show its age. Carrying additional models with interchangeable batteries could strengthen Better Place's offerings to customers but, according to a company insider, is in no position to order additional makes at this time.

Israel Corporation, which owns the largest stake in Better Place, has avoided making any commitment to pump more capital into it. "Decisions on raising capital from Better Place shareholders were reached in the last few months and are being executed," it said. "There is no need at this point for further decisions by Israel Corporation."

Better Place responded: "With regards to Qoros: Qoros and Better Place maintain contact from time to time. At this time, however, there are no specific talks on cooperation between the companies. With regards to the inventory of cars: With the completed deployment of infrastructure – battery changing stations and charging spots – throughout the country, the company launched in recent weeks marketing measures to increase it share in the Israeli market. The company, accordingly, prepared itself with a sufficient inventory of cars."

Evan Thornley has unplugged from Better Place after only three months at the helm.Credit: Tomer Appelbaum

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