Credit’s tight, the economy’s in the toilet, gas prices are low. It should all add up to trouble for an electric car start-up, right? Not so, says Charles Stonehill, the new CFO of Better Place.
Because the electric car infrastructure company is in the early stages of development, the tough market is not hurting the company too badly, he tells Earth2Tech:
Stonehill insists that being at a relatively early stage of development — a couple years away from having any swap stations or charge points in full swing — means Better Place faces less trouble in this kind of economy than it might in later stages. He says the company, which has already raised more than $200 million, does not need immediate access to credit and can lay groundwork for infrastructure deployment until markets stabilise — building relationships with battery and automakers, and wooing investors for capital and policymakers for tax credits and other incentives to push electric vehicles mainstream.
He then goes on to say that when the company does need to really build out its network, which won’t be for another 2 years, it will rely on private equity. Though private equity is in turmoil now, by 2011, it might be improved. Even if it can raise PE cash, Earth2Tech points out a scary implication of the Better Place business model:
Problem is, all of this seems to leave the company having to raise hundreds of millions of dollars for just about every new project for at least the next several years. Here’s the best-case scenario: lithium-ion battery and electric vehicle supplies neatly align with consumer demand for a subscription battery exchange service (a huge gamble), and Better Place starts generating revenue so it doesn’t have to keep raising all that capital. (Stonehill said the company can work on at least two networks and probably several more at any given time.) But for the startup to rake in enough to build a few billion-dollar networks each year? Might be a stretch.
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