Ernst & Young

Electric car industry hitting the tipping point. For investors.

August 5, 2010: 11:44 AM ET

Venture capital firms are staking late stage electric car startups with huge cash to help them scale up and IPO

By Shelley DuBois, reporter

The age of the electric car is upon us, or so the numbers would suggest.

Companies in cleantech, especially those making cars, received over $400 million in funding in the second quarter of 2010, according to an Ernst & Young analysis based off of Dow Jones VentureSource data.

A company called Better Place received the majority of this funding-- $350 million of it—which is 23% of total financing doled out in the sector for the quarter.

Better Place is working on building an infrastructure to fuel electric cars. The infrastructure is based on stations, where drivers can switch out lithium-ion batteries in their cars, much like the way drivers pull into gas stations now.

This late stage burst of funding for Better Place could mean that investors are ready to see it push to close the gap between a startup and a company that can complete an IPO. More

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