Better Place user David Rose w/keys to Renault Fluence ZE electric car in Israel [photo: David Rose]Enlarge Photo
This is a tale of two electric-car companies.
One, Better Place, declared bankruptcy back in May, and doesn't appear to be getting back on its feet anytime soon. Last week, the supposed buyer of the Israeli electric-car service was in bankruptcy court after failing to make scheduled payments.
The other company, Tesla Motors [NSDQ:TSLA], is attempting to take plug-in cars mainstream--like Better Place. And it's doing pretty well.
The all-electric Tesla Model S luxury sport sedan has been showered with awards, and the company has become a darling of Wall Street.
Tesla is working to build a network of Supercharger quick-charging stations, and plans to open some battery-swapping stations as well.
How is Tesla succeeding where Better Place failed?
Putting the car before the charger
Better Place founder Shai Agassi knew that he needed a clever solution to overcome the two main issues plaguing electric cars: range anxiety and long charging times.
However, Better Place's model may have been a bit too clever. The company essentially sold customers access to a charging network first, with the car coming second.
Renault Fluence ZE charging at Better Place charge point in apartment bldg [photo: Brian of London]Enlarge Photo
Signing up with the company was like buying cell-phone service: Buyers got a device (the car) and access to a network (of charging and battery-swapping stations).
A certain number of prepaid miles were bundled into the monthly payments for the car, as was the cost of the electricity it used.
Like a mobile-phone carrier, Better Place also left the development of its physical product to another company. Its Renault Fluence ZE electric cars were designed by the French car maker and built in Turkey.
With Tesla, it's the other way around.
Tesla started out with a product--an electric car, the Roadster, and now its second car, the higher-volume Model S. Only now is it gradually building a network of public charging stations (and, soon, battery-swapping stations) to support it.
"Instead of deciding on 'what environmentalists will be willing to give up to drive electric,'" Agassi said in a LinkedIn post about the company, "Tesla decided to build a car that supersedes all buyer’s expectations."
Object of desire
Agassi said an electric car should be an "object of desire"--and that's exactly what the Model S has become.
While the Better Place model was a perfectly practical solution for electric-car early adopters, Tesla has put itself in a position to appeal both to that group and to the larger group of people who just want a very nice car.