Stretching, embeddedness, and scripts in a sociotechnical transition: Explaining the failure of electric mobility at Better Place (2007-2013)

Abstract

Based on field research, interviews, and participant observation, this study explores the failure of Better Place a now bankrupt company to successfully demonstrate and deploy battery swapping stations and electric vehicle charging infrastructure. To do so, it draws from concepts in innovation studies, sociotechnical transitions, management science, organizational studies, and sociology. The study expands upon the notion of 'fit-stretch', which explains how innovations can move from an initial 'fit' (with existing user practices, discourses, technical form) to a subsequent 'stretch' (as the technology further develops, new functionalities are opened up, etc.) in the process of long-term transitions. It also draws from the 'dialectical issue life cycle model' or 'triple embeddedness framework' to explain the process whereby incumbent industry actors can introduce defensive innovations to 'contain' a new niche from expanding. It lastly incorporates elements from design-driven innovation and organizational learning related to schemas and scripts, concepts that illustrate the vision dependent and discursive elements of the innovation process. It uses the case study of Better Place to test and build upon these concepts. With a market valuation of more than $2 billion, Better Place was poised to become one of the most innovative companies in the electric mobility market. Yet after operating for five years it declared bankruptcy and saw its assets sold off for less than $500,000. We suggest here that Better Place failed because it 'stretched' to the point that it 'broke;' that it provoked a defensive response from both old automotive manufacturers (such as General Motors) and new ones (such as Tesla); and that the fantastic nature of its visionary scripts convinced its investors and promoters to unrealistically raise expectations and downplay persistent risks.