Founder of electric vehicle initiative assures company will turn profit; calls to find more ‘Better Places,’ establish successful regulation

Tomer Hadar, Calcalist
Published: 03.14.12, 08:44 / Israel Business

“Ever since last summer, ‘profitable’ has become a dirty word in Israel, but we’ll be profitable,” assured Better Place founder Shai Agassi at the first national conference on green growth held this week by Calcalist and the Environmental Protection Ministry.

“Better Place’s model is a profitable model. When I look at our ability to provide strategic technology to China, it’s an ability which can be an asset to us. This kind of model can work only if it’s profitable. A model which isn’t profitable and subsidized by the government will fail. In the end, an unprofitable project is a failed project. We’re not ashamed to be profitable – it’s not a dirty word,” Agassi said.

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“Better Place was founded four years ago. Since then we’ve raised considerable funds, people are already on the road and in February we’ve even surpassed 100,000 electrical kilometers in Israel with no fuel. Some people say our energy is coal based and therefore causes pollution – well, it’s still not liquid fuel.”

Agassi continued: “We’ve had a lot of projects but there were several rules to which I had to follow. First, the government demanded we raise funds from private investors and spend them in the country. We were sent to raise funds in the amount equal to one week of fuel usage in Israel. Since we began, we’ve raised $750 million – risk-free for the government. Secondly, jobs. Better Place has spent a billion and a half shekels (nearly $0.5 million) which translates into jobs.

Shai Agassi (Photo: Reuters)
Shai Agassi (Photo: Reuters)

“All in all, by the end of 2011, some NIS 3.5 billion ($92 million) were invested in creating jobs in Israel. The significance to Israel’s economy is immense… We’ve created a strategic advantage for Israel. This week someone teased me about the power cut we had, but I told him I’ve still got 150 kilometers left in the battery – more than enough to get to a replacement station. I asked him something else – what’s he going to do when there will be a shortage in fuel? Because when that happens you’re going to need a lot more then a half an hour to fix it. We have an electric car which is faster than a regular car and costs less money,” explained Agassi.

Find more ‘Better Places’

According to him, this sort of thing cannot be done in the rest of the world. “It’s the first time this kind of thing is happening in Israel,” remarked Agassi. “The fact that we’re the first ones in the world doing this is a huge advantage… Cars running on gas are yesterday’s news and each day that goes by with gas-fueled cars being brought into the country is a loss.”

“The Finance Ministry informed us that once we show profit, they’ll collect income tax, by the mileage… Some of the offices wanted to know whether we were a monopoly. How can you be a monopoly without having sold anything yet? It is important to us to be an open network. In such cases, the regulator plays an important role in cultivating a different approach. We must make sure that knowledge-intensive industries should only be taxed after they’ve proven successful…We also need a system of tax deferrals for entrepreneurs who provide services.”

Agassi concluded that “the job of the regulatoris to find five more ‘Better Places’ and to regulate them in such a way that will allow them to succeed and export themselves abroad. If we know how to clean up the Haifa bay, we’ll also be able to clean up Beijing.

“If we know how to duplicate these processes and create a fertile ground, we could create lots of jobs for the next ten years. The entrepreneurs are here already. If we ride the green wave – we’ll be ahead. If we get non-fuel cars on the streets of Tel-Aviv, we can get them to the streets of Munich and New York and create a wave that will carry Israel’s economy for the next decade.”,7340,L-4196226,00.html