Shai Agassi at 2012 ribbon-cutting for his new electric car, the Renault Fluence ZE (Photo/Wikimedia-Better Place CC BY 2.0)
Shai Agassi at 2012 ribbon-cutting for his new electric car, the Renault Fluence ZE (Photo/Wikimedia-Better Place CC BY 2.0)

At upcoming Oakland book talk, the epic fail of an Israeli electric car startup

Who killed the electric car? That’s the central theme, and title, of the 2006 documentary that explored the demise of the first mass-produced electric vehicle, General Motors’ EV1, in the late 1990s.

And it’s the same question asked two decades later in “Totaled,” Brian Blum’s new book chronicling the rise and fall of project Better Place, an electric car startup in Israel — and formally based in Palo Alto — that filed for bankruptcy in 2013. The subtitle of the book is “The Billion-Dollar Crash of the Startup that Took on Big Auto, Big Oil and the World.”

Blum, who will be speaking about his book at Temple Sinai in Oakland on Tuesday, Dec. 5, points out that it was Better Place — not Tesla, not GM — that developed the world’s first affordable all-electric car.

“The plan was to use Israel to prove electric cars could work everywhere,” he says. “There was even a multi-county plan to bring battery-switchable electric cars to the Bay Area, running up and down Highway 101.”

Brian Blum
Brian Blum

It wasn’t just a dream. Better Place launched in early 2008, having raised $200 million on the strength of an agreement with Renault-Nissan to provide the electric vehicles; Better Place would build the electric recharge grid and establish a network of battery-changing stations.

But by the time Better Place went belly up five years later, the company, founded by Israeli Shai Agassi, had spent approximately $850 million with ice-cold results: fewer than 1,000 cars on the roads in Israel, and only about 400 in Denmark

One of those cars was purchased by Blum, an Israeli American journalist who specializes in business and technology writing. Blum grew up in Millbrae and lived in Berkeley for seven years while getting his Master’s in instructional technology from San Jose State. (He also taught Hebrew school for a year at Temple Sinai, where he will be speaking next week.) Blum and his wife made aliyah to Israel in 1994.

Blum calls his book, published in August, “a real-life, high-tech whodunnit, where the mystery to be solved is who, or what, killed … one of the most promising Israeli startups in history.”

It’s also a story of mad, crazy love, he adds.

For Blum (who blogs at, it all started with an innocent test drive at Better Place’s Herzliya visitor center in the summer of 2012.

“We hadn’t gone in planning to get the car,” Blum said at an October book release event in Jerusalem. “We went in because it just seemed like a fun thing to do. We fell in love, and within two weeks we had signed the paperwork and we bought the car. And this is very unlike me because, you know, as a journalist I do an incredible amount of research about everything.

“When the company went out of business less than nine months later,” he continued, “I said, ‘Wait a minute. Did I do my due diligence?’ … It’s like, I didn’t do my due diligence and I’ve got to find out what happened. Why did this car fail? Why did this company fail? And so I started to research and I started to interview people, and it became more and more interesting.”

What Blum uncovered was “an intriguing story filled with global investors, presidents and prime ministers, groundbreaking technology, and a young entrepreneur with charisma, conviction and confidence to burn.”

That would be Agassi, an Israeli-born, Silicon Valley-based wunderkind who made his fortune selling his first company, TopTier Software, to SAP for $400 million in 2001. At 34, he became SAP’s chief technology developer, and two years later was named one of the top 20 “Global Influentials for 2003” by CNN-Time magazine.

A couple of years later, he was in Switzerland when the idea for Better Place was hatched, Blum says. “He was a member of the Young Global Leaders, which is a division of the World Economic Forum … and he was part of this group of select young leaders who were given the task to think about what they could do to make the world a better place.”

Ablum-coverAgassi decided he wanted to wean the world off fossil fuel, and that Israel would serve as the testing ground. His idea was for an electric car with a battery that could be charged overnight and then, when spent, changed at one of the many automated robotic switching stations that would span Israel from the Lebanon border to Eilat.

Better Place and Agassi’s vision played a starring role in Dan Senor and Saul Singer’s 2009 book “Start-up Nation.” Israel’s president at the time, Shimon Peres, promoted the project, and former U.S. President Bill Clinton endorsed it. Agassi thrilled crowds in person and online with a stirring TED talk, and Foreign Policy magazine named him among its 100 most influential global thinkers in 2010.

The business model was similar to that of a cellphone provider, Blum says. “Better Place was an electric infrastructure company. Their idea was to provide the infrastructure for any electric car that has a switchable battery. They were operational in Israel, they were operational in Denmark, in the Netherlands … they had outlets in China, Japan, Hawaii, Austria, Canada. They were all over the world, but they didn’t make their own car, so they contracted with Renault … to retrofit a car that was already in the pipeline called the Fluence.”

Better Place began to gain an enthusiastic following, Blum says, with those who purchased the car loving its power, torque and the savings from not having to buy gas.

And yet, in October 2012, the board of directors fired Agassi, and six months later Better Place filed for bankruptcy.

Who was responsible for its demise?

Blum proposes that Israelis were hit by sticker shock — a $40,000 price tag — and his book describes dramatic internal power struggles. Others blame the locations (or lack thereof) of battery-switching stations and/or a negative TV ad campaign.

What is for sure is that the burn rate was out of control.

And yet, Blum says, the love story continues. To this day, a handful of devoted purchasers continue to charge their batteries and drive their cars, apparently with the intention of running them into the ground.

Blum calls his book “a timely case study” that’s filled with “valuable lessons” for investors and other businesspeople wanting to do business in Israel. Bottom line, he says, his book “tells the flip side of the classic ‘Start-up Nation’ story.”

Brian Blum will discuss his book at 7:30 p.m. Tuesday, Dec. 5 at Temple Sinai, 2808 Summit St., Oakland. Free with registration. Details on other appearances.

Rachel Neiman
Rachel Neiman

Rachel Neiman is a marketing and PR professional working with innovation-based companies, and writes a bi-monthly column about Israeli nostalgia for Israel21c. She lives in Jerusalem.