Largely over looked in a fund raising announcement released late Sunday is the suggestion of Better Place’s next ambition: taking on the massive Chinese and Asian markets.
The electric car battery swapping company referred to its initiative in an announcement of another $350 million of venture capital. The B, or expansion, round of funding should close this quarter and values the company at $1.25 billion – a healthy sum for a business that has yet to earn real revenue.
Will Renault's $20,000 battery swappable electric car sell in China, or will a cheaper alternative be necessary?
The lead investor in the financing is the British bank HSBC, which put in $125 million and now owns 10 percent of Better Place. HSBC Global Capital Financing Head Kevin Adeson joined the Silicon Valley company’s board.
Along with the funding news, Better Place said it remains on track to launch in Denmark and Israel at the end of 2011. That’s when the first Renault electric cars with swappable batteries hit the market. The company is installing battery-swapping stations and electric car recharging stands in both countries in preparation for the launch.
It hopes drivers will worry less about a car’s limited range – likely 100 mile or less – if they can quickly exchange depleted batteries for fresh ones and continue their journeys.
The company plans to begin operating in Australia and parts of North America a few months after opening for business in Israel and Denmark. It now is testing cars and battery replacement station in Denmark and at an electric taxi project in Tokyo. More trials will begin later this year.
Yet Better Place’s real ambitions stretch beyond the West. “We expect that HSBC will help us to scale in Europe, China and beyond,” the company said in a press release. “The company intends to expand into markets where the business model economics and investor returns are optimized, notably, in Europe and Asia.”
Better Place has obliquely mentioned the possibility of a Chinese initiative before, but never so directly. With 1 billion people, a growing middle class and an emerging automotive market, the Asian tiger could spell endless opportunity. But it would suggest agreements with new vehicles suppliers or a cheaper version of Renault’s $20,000 car.
Perhaps both. It also would imply lower profit margins for a company that is still trying to prove battery swapping is will catch on with consumers.
TechPulse 360
Mark Boslet