The year was marked with major turmoil and the survival of the fittest in terms of the electric car revolution. The major companies include A123 Systems, Fisker Automotive and Better Place.
One of the most noted struggles were three major companies that are aiming to be on the forefront of the electric car revolution. A123 Systems is a battery maker, Better Place, is a battery replacement/recharging business and Fisker Automotive is a luxury electric car builder. These three alone represent billions of dollars of investments and unfortunately, they as individual businesses, are facing both commercial and financial issues moving forward.
While each company represents a different area of the electric car revolution, the slow rate of adoption by the general public is what is bogging down the success of these companies. The cost of creating the next generation batteries and electric cars still remains prohibitively expensive. Examples would be Better Place’s layoffs in Israel, as its commercial turnaround is much lower than initial projections. The total round of layoffs can reach as high as 350 employees by year’s end. It was only able to register double digit sales in the country where it boasts of close ties to the Israeli government and a major government subsidiary, Israel Corp.
Better Place was launched back in 2007 and its main product is a electric charging infrastructure and support battery swap stations. Its other businesses include selling electric car chargers and a government subsidized electric car. While initially it was able to raise money and lay the groundwork in Israel and Denmark through its partnership with Nissan, the company has since floundered with the high capital expenses needed to be disbursed to build its networks. It was able to raise nearly U.S. $100 million but the capitalists grew tired of losing money and thus their future in 2013 is quite grim.
Another superstar in 2012 was Fisker Automotive, with its ultraluxury vehicle the Karma. It is now on life support, seeking a partner, acquirer and/or investor so that it can continue onto its next model, the Atlantic. It has since stopped building the Karma, as recalls conducted in 2012 as well as the major losses during the last hurricane that hit New York has put the company on the ropes in terms of its future. Much of its fund raising activities with investors has been marred with charges of misrepresentation, leading to many angel investors wary of putting money in the company’s coffers.
The third major company making headlines this year, even making it an election issue was A123 Battery Systems, which recently declared bankruptcy. Much of its assets though has been subject to an auction between Johnson Controls and Wanxiang. Because of the large Energy Department grant received by A123 during its heyday, as well as its military contracts, allowing a Chinese company such as Wanxiang to seize control has made many nervous about the company and the industry’s future. A123 was hit hard by Fisker cutting back on its orders, creating a sort of domino effect that has cast a long shadow on the future of the electric revolution in 2012.