Shai Agassi (Photo credit: Wikipedia)
In a surprise move, Better Place has ousted chief executive Shai Agassi, the charismatic founder of the electric car infrastructure company that has raised nearly $1 billion to build a network of battery switching stations in Israel, Denmark, Australia and other countries.
Better Place’s board named Evan Thornley, chief executive of Better Place Australia, as the company’s new global CEO.
“Under Shai’s leadership, we’ve successfully achieved our goals in the first chapter of Better Place, and we owe Shai our gratitude for turning his powerful vision into a reality,” Idan Ofer, the Israeli billionaire and Better Place chairman, said in a statement. “It is almost five years to the day since Shai launched Better Place and a natural point in the company’s evolution to realign for its second chapter and for the challenges and opportunities ahead.”
Young, telegenic and fervent, Agassi was the public face of Better Place, appearing at countless conferences as he enlisted the support of heads of state and business leaders for his vision of weaning the world from oil. He remains a Better Place board member.
In recent weeks I’ve interviewed Agassi and Ofer and neither man hinted at turmoil behind the scenes as the company launched electric car networks in Israel and Denmark.
“As far as I’m concerned, Better Place has proven what it set out to do successfully,” Ofer, Israel’s richest person, told me during an interview at his Manhattan duplex three weeks ago. “It’s abundantly clear that it works and it works well and everything we set out to do from day one we’ve actually done. There isn’t a single issue that was put into the business plan that we haven’t done.”
Better Place has lost $490 million since its founding, according to financial reports filed by Ofer’s Israel Corp., which is major shareholder in the startup.
Israel Corp. has invested more than $200 million into Better Place and I asked Ofer how long he was prepared to wait for the company to turn a profit.
“Money needs scale,” Ofer said. “The faster we scale up and refine the model, the faster we’ll be making money. I would say there’s probably two years, three years to go.”
“That’s not what concerns me,” he added. “What concerns me is that I want to scale as fast as possible and I want to be all over Europe.”
He noted that his investment in chipmaker Tower Semiconductor took a decade to pay off.
When I talked to Agassi last Monday, he was his usual ebullient self, infusing the business case for Better Place with his mission of making electric cars as attractive to own as petroleum-powered models by eliminating the high cost and limited range of most current electric vehicles.
“I can tell you first hand, I had an amazing epiphany when we drove around the entire country and realized what it means to have a country that runs completely on electricity,” Agassi said from Tel Aviv, referring to a journey he recently took around Israel in a battery-powered Renault Fluence sedan.
Better Place has built a network of battery-switching stations in Israel that lets drivers traverse the entire country, swapping depleted batteries for fresh ones much like they would fill up at a gas station. A similar network currently covers most of Denmark.
The company sells the Fluence but owns the battery, the most expensive component of an electric car and charges drivers for the miles they drive. That makes the electric Renault competitive with similar fossil fuel-powered cars but cheaper to drive, given the high cost of gasoline in Israel, according to Better Place.
Some Israeli press reports have characterized Better Place's Israeli sales as slow, which Agassi and Ofer dismissed as carping by competitors. Agassi did, however, cancel an appearance at a Wall Street Journal conference last month at the last minute to deal with business in Israel.
It is not uncommon for a startup to replace a visionary founder with a corporate veteran when it comes time to move beyond the startup phase. Though as a former top executive at software giant SAP, Agassi was not exactly a typical startup guy.
Thornley, the new Better Place CEO, is one of those entrepreneurial guys, having co-founded LookSmart, an early Web directory that used to compete with Yahoo back when Google was just another search startup. (See my 1999 Industry Standard story on LookSmart after it moved from Melbourne, Australia to San Francisco.)
A former McKinsey & Co. consultant, Thornley returned to Australia after the dot-com crash and eventually was elected as a Labor Party representative to the Victoria state parliament. He joined Better Place in 2009.
“In his four years as CEO of Better Place in Australia, Evan has built an impressive track record, particularly around establishing a strong set of industry partners there,” Ofer said in a statement. “Evan brings the right combination of entrepreneurship and coalition and team building to take Better Place to the next level.”
