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Better Place Secures $350M Series B Round led by HSBC Group

Better Place, the global provider of EV networks and services, has signed an agreement with an HSBC-led investor consortium for new equity financing of $350 million. The deal marks one of the largest single clean tech investments and values Better Place at $1.25 billion. The announcement comes almost two years after Better Place announced its first car partnership and its first country deployment in Israel.

The capital will have three primary uses, said Shai Agassi, Better Place CEO, in a webcast of the announcement this morning: (1) to complete the R&D on the solution, the trials and development effort to get the system up and running by the middle of next year; (2) Better Places’ contribution toward its operating companies in Israel, Denmark and Australia; and (3) opening up new markets and new countries, with a focus mostly on Europe and Asia.

Currently, Agassi said, the first full-fledged battery switch station is built and in operation and testing in a hanger in Israel. The station can handle the full cycle on the battery in less than two minutes, he said, and it knows how to handle different battery packs.

We’re in the process of improving the logistics around the installation with the goal of installing a switch system—a complete station—in less than one week. We’re now in the final stages of shopping out the construction of these machines&mash;we’re still 18 months away from a full operating network. We’re shopping out to mass producers that can produce hundreds and thousands of these stations. These stations complement a network of charging. You need a charge spot at home and at work for every subscriber, and where you are parked for a couple of hours, such as sports arenas, movies and theatre.

—Shai Agassi

This Series B equity financing round features participation from new investors including HSBC, Morgan Stanley Investment Management, and Lazard Asset Management. These investors will join existing Series A investors including Israel Corp., VantagePoint Venture Partners, Ofer Hi-Tech Holdings, Morgan Stanley Principal Investments, and Maniv Energy Capital, among others, as shareholders of Better Place. For HSBC, which led the round with an investment of $125 million, the deal represents one of the largest financial investments of its kind by HSBC.

As part of the deal, Kevin Adeson, HSBC Head of Global Capital Financing, will join the Better Place Board of Directors, and HSBC will own approximately 10% of the company’s shares. In a webcast of the announcement, Adeson said that the investment in Better Place resulted after more than a year’s evaluation of electrification and transportation.

Alternative energy is a place where we want to focus our capital...We’ve been looking at Better Place for a year. We quickly came to the realization that Better Place has a model that is unique..the model works, it’s proven technology, and over the course of the past couple of years, we have seen Better Place form very important partnerships and alliances. We’ve spent quite a bit of time talking to Renault and some of the other automakers, we’ve talked to the utilities, we’ve talked to the battery manufacturers such as A123. All of those discussions confirmed what we expected, is that we are on to a unique model, and one that is inevitable in the electrification of transportation.

We are confident that Better Place has the technical and commercial solutions to allow for the mass adoption of electric cars in the near term. The Better Place switchable battery solution, which addresses the range limitation of fixed battery electric cars, will offer the consumer an affordable and attractive alternative to current combustion engine and hybrid vehicles. We expect the Better Place model to be widely adopted across many countries and cities, particularly in those markets with policies strongly favoring electric vehicle adoption.

—Kevin Adeson

“Since the company was founded over two years ago, Better Place has maintained that the race to mass adoption of EVs would be a marathon, not a sprint. We are continuing at a fast and steady pace, and this major company milestone puts us in an unparalleled position to deliver a sustainable transportation system in our initial target markets and beyond.”
—Charles Stonehill, CFO

The financing allows Better Place to expand its geographic footprint while continuing to execute against its committed R&D and deployment milestones. The company intends to expand into markets where the business model economics and investor returns are optimized, notably in Europe and Asia.

Better Place continues to meet its timetable for Israel and Denmark launch plans for the end of 2011 when the first Renault switchable battery electric cars hit the road. Better Place also will continue to execute against its strategy of early deployment projects in Australia and select North American markets a few months after the Israel and Denmark launches as planned.

Additionally, the company’s R&D team is currently testing each element of the Better Place solution in real-life scenarios around the world in a multi-phase cycle, beginning with the company’s managed EV network in Denmark, which began last December, and a Tokyo electric taxi project with battery switch station, which kicks off in April this year. These and other development milestones lead up to full-scale trials in the second half of 2010 and commercial launch in 2011.

The transaction is subject to approval by antitrust regulators and other customary closing conditions and is expected to close in the first quarter of 2010.

Today marks the end of an extensive process with the outcome being a decision by one of the world’s largest, most conservative banks, HSBC, to take the validating step of investing in a private company intent on bringing innovation to the trillion-dollar automotive and energy industries. The strong investment commitment and global relationships that HSBC, Morgan Stanley Investment Management and Lazard Asset Management bring to the table combined with the continuing confidence from our original investors enables us to scale up globally and execute against our plan.

—Shai Agassi, Better Place Founder and CEO

Comments

kelly

I have few doubts that BB will work in Israel. If Denmark follows - away we go.

kelly

BP, not BB for Better Place.

Account Deleted

So far I have been skeptical of using battery swapping stations for EVs as a means of charging EVs on the road but it is impressive to read that the Better Place station can swap a battery in just 2 minutes. They swap a 24 kWh battery so this compares to fast charging an EV at 720 kW (=(60/2)*24). This is a lot faster than the 50 kW level III fast chargers that are planned for EVs in the next decade. The PB swapping stations will be in action in just 18 months from now. I very much doubt that 720 kW charging will be possible within 2020 for ordinary EVs. You will need very efficient batteries and power electronics to make that possible without creating too much heat during the charging. In other words, these stations can do something now that is not possible with fast chargers at least until 2020.

Another advantage of the swap stations is that they provide an inexpensive way to take used batteries out of circulation from use in EVs and into use for grid stabilization. More specifically, the battery swap stations could perform grid stabilization functions using both charging of new batteries and charging of used batteries that have been depleted to 80% of their original 24 kWh capacity (the depletion point where they are taken out of circulation for EV use). I believe this must be one of the little secrets that could improve the revenues from operating a battery swap station. They create money from buying electricity at low rates at night or when the wind blows heavily and sells it at expensive rates during the day or when the weather is quiet. In Denmark the kWh prices fluctuates a lot with the weather because 20% of the power comes from wind turbines.

ai_vin

Actually Henrik, it's better than that; BP says they're 18 months away from a full operating network and only a week away from their first complete station. Israel is such geographically small country [with all major urban centers less than 150 kilometers apart, and 90% of car owners driving less than 70 kilometers per day] that even a fraction of this network could get a lot of people into EVs. And it's not just these swapping stations, BP has already put in place simpler park&plug "charging spots."

Engineer-Poet

With PBP, the end of oil as the chief source of transportation energy is at hand.

This just gives the Arabs another motive for the destruction of Israel, doesn't it?

SJC

There was a group in the middle east that met and said the electric car would flop for several reasons, they included crashes and floods. It was pathetic to read their "reasoning", it seemed more like a far fetched hope that they would fail.

ai_vin

I remember when they said EVs were a threat... to blind people. If the blind can't hear a car coming they could get run over. Now while this is technically true it ignores some simple facts: Any well made car, even one with an ICE, can be made so quiet the only thing you hear are its tires. Any car, even an EV, can be made as noisy as you want - http://www.vroombox.com/vroombox/

BTW, what about bicycles? Bicycles are silent and therefore a threat so we should take them off the roads too, right? No, EVs and bikes are not a threat to the blind or anybody else; it's the nut that holds the steering wheel/handle bars that's the threat.

Arne

I have always been of the opinion that battery swap will not be popular. Mainly because it limits the freedom of the car companies in the design of their cars.

Another reason might be that people will want to own the battery since it is the most important part of the car.

Looking at how well BP is doing, I might be forced to review my convictions. Interesting times ahead.

ai_vin

On your first point I use to agree [and still do - mostly] but, if this article is truthful, the battery swap station "knows how to handle different battery packs." How much I continue to agree will depend on how many different battery pack configurations it can handle.

However I think your second point is wrong. The upfront cost of the batteries is what puts most people off EVs. Leasing or renting-to-own the pack is a good way to reduce those costs. Another way would be to reduce the cost by reducing the size of the pack with the 'car and a half' idea.

With this idea you buy only enough batteries for your daily commute and rent a RE trailer for longer trips.

JRP3

I've been saying from the beginning that this is unnecessary and costly. All those extra batteries have to be paid for, as do the swap stations, and that extra cost will be passed on to the consumer. Even more baffling is the push for swap stations in small countries, where a single 200 mile pack would more than take care of your daily needs and you could probably get by with a 100 mile pack, no swapping needed in either case. As batteries continue to improve there will be even less motivation for swapping, it's a dead end.

Engineer-Poet

JRP3, the other side of that coin is that you could build lots of 100-mile and even 50-mile batteries to be leased cheaply for every-day driving, and people could still swap in a 200-mile battery when they needed to go a long way.  That would slash the total cost of the system while still letting everyone have long-range capability.

sulleny

A ridiculous idea. Being fronted funds for other purposes - probably the PR profile of charge stations. If the speed of charge is truly an issue (we think not) apply the same logic to liquid fuel. While it takes 5-10 minutes to refuel a 20-30 gallon tank - why can't we purchase an already filled tank of gas? i.e. why has "tank switching" not become a viable service?

This is a back room project that endangers itself by drawing attention to its implausibility. HSBC shareholders should be aghast. But, if it helps electrification - more power.

sulleny

And this study says that charge stations are unnecessary for early adopters (who build the public perception wave.)

http://www.greencarreports.com/blog/1041673_early-evs-wont-need-many-public-charge-points-says-nyc

Roger Pham

The beauty of BEV is that no new infrastructure needed, as the vehicle can be charged at home.

However, learning from what Better Place has done, a BEV may be built with a small battery pack of 16-20 kWh like the Volt, for a range of 80-100 miles, without the engine, but with an empty bay under the hood for the installation of a removable genset of 20-30 kW of power. Imagine the reduction in weight and cost of this BEV. Then, when the battery is low in charge, drop by a place like a convenient store and have a genset (electric generator) dropped into the empty bay under the hood. This genset comes complete with a 2-3 gallon fuel tank to provide a refillable range of 100-150 miles.

In very cold season, the owner may want to use this genset daily to provide cabin heating and windshield defrosting if the genset is designed with liquid cooling and exhaust heat recuperation.

SJC

There is a place for electric cars, but I don't think that they will replace ALL cars anytime soon. That does not say that we should not bother, it is not an all or nothing at all proposition. We should be realistic and not put all our faith in everyone driving an EV.

The most good at the least cost with the easiest transition will probably be favored. That is why I like FFV/M85 which easily fits in to the present way of doing things. That does not mean that we give up on PHEV/EV/FCV, but we have more time to refine them. We can have 10 million new FFVs every year at a low price. We would be lucky to get 1 million PHEV/EV/FCV each year. It is the rate of adoption that makes the difference in reducing imported oil soon enough.

Engineer-Poet
We should be realistic and not put all our faith in everyone driving an EV.
But anyone whose mileage consists substantially of the first X miles from an extended stop can slash their fuel consumption with a PHEV-X (where X can be anything from 10 miles on up; the Volt is a PHEV-40).  If we can get X up to 60 miles (~100 km), that probably includes most mileage driven by personal vehicles.  Even if internal combustion handles the rest, it is a small enough problem to handle with the resources we have.
JRP3

E-P,
There are other, better options for occasional long range.
1. Rent an ICE, or Hybrid

2. Small towable genset trailer

3. A 50 mile or 100 mile pack can already be fast charged in 10 minutes or less to 90%

All cheaper solutions than multiple swappable battery packs and swap stations.

Engineer-Poet

I dispute #3, because it requires both more time and different battery technologies.  Also, you're not accomplishing the same ends; #1 and #2 retain substantial dependence on liquid fuels, which the battery-swappable EV does not.  Otherwise I agree.

Jim

PBP is an uneconomical idea and I don't know why it attracts funding. Only motivation I see is to get the population on some kind of monthly fee for their cars which will be ultimately more costly to the consumer.

Instead of battery swapping, just build a PHEV like the Chevy Volt. Have it run on E85 or renewable methane if you wish. PHEVs deals with the range and recharge problem in one fell swoop, needing no additional infrastructure and making use of the one we have in place now.

Just to be clear, if a PHEV is configured to run perhaps 70-80% on its electric (charged) power, then the consumer could afford the 20-30% of fuel needed even if it was completely synthetic ($5-6 per gallon). This is because so little of it would be needed.

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