South Africa's first consumer electric car, the Joule, will require capital of around R5.5 billion over the next three years to bring to market.
This is according to Kobus Meiring, CEO of Optimal Energy - the Cape-based company that conceptualised and developed the Joule.
“We plan to start setting up a plant in 2010, with the first vehicles off the line in 2012,” says Meiring. He adds that the Eastern Cape is a very strong possibility for the location of the first plant, with the East London Industrial Development Zone being one of the front-runners.
The zero-emissions battery-powered electric vehicle was exhibited at the recent South African Automotive Week, in Port Elizabeth, which Meiring said went well.
“The SA public is very excited about this and strongly supports Joule. A lot of SA and international media exposure was generated and we are constantly adding to our list of potential investors.”
Talking specs
According to Meiring, the plant will produce 50 000 cars per year, with about 5% to 10% of this number going to the local market and the rest earmarked for the UK and EU.
The Joule is a five-seater consumer model, powered by a lithium-ion battery pack, with each battery module offering 200km range under specified conditions, according to Optimal Energy.
The battery charges using a standard 220V home outlet, with seven hours of charge time required for 200km range. The batteries will have to be leased separately, however, and are not included in the purchase price.
Meiring says, in 2009 terms, the Joule will sell from about R240 000 for the base model, with monthly battery leasing equating to about two tanks of fuel for a conventional car.
According to Meiring, the biggest negative perceptions about electric cars have always been related to range, speed and style, with such cars generally being “small and unattractive”. But he says this is changing, and very quickly.
“With today's battery technology, slow and short range are things of the past, with Joule having a range of 300km and a top speed of 135km/h,” he says. Optimal Energy cites studies showing that 99% of urban users drive less than 150km a day, and recommends that only one battery pack is necessary to power the Joule.
Manufacturing matters
Government is a shareholder in Optimal Energy, and the Department of Science and Technology has previously given R50 million in funding towards the Joule's production, with a further R50 million coming from the Industrial Development Corporation.
”Government is a very strong supporter,” says Meiring, adding that an inter-ministerial committee has been formed at Cabinet level to support the commercialisation of Joule.
“Something like this cannot be done without government support, and this is not just about a car, but about a whole industry that is being created.”
Meiring says the benefits are “huge”, with job creation, technology and skills development, and export earnings representing just a few of these. “Countries that own car brands play in a completely different league from those who do not, and this will have positive spin-offs for all of SA and even the rest of the continent,” he notes.
Carel Snyman, an independent energy specialist, says SA being an original equipment manufacturer for an electric vehicle is positive, but comes with a number of challenges.
“Local confidence will take time, so governmental support and purchases will be needed. Exports will be crucial for business growth and to get volumes up and prices down (or profits up).”
He adds that local jobs and experience is also a challenge, questioning whether the productivity of the workforce is high enough when compared with Japan, Korea and China.
“With the current Eskom and electricity challenges and rising prices, I see some problems coming. Eskom is not doing the country any favours in terms of economic growth.”
Green credentials
All the factors needed for a revolution in the car industry are only converging now, says Meiring. “Climate change, energy security, oil price, and battery technology and price together will cause a surge of uptake of this technology over the next decade.”
By 2020 we will look around us and take electric vehicles as much for granted as we now do the cellphone.
Kobus Meiring, Optimal Energy CEO
Using peak Eskom rates of 40c/kWh, a Joule only uses 5c/km of electricity, according to Meiring. “At off-peak rates (up to 75% discount), available to electric vehicles around the world, even if electricity goes up 400%, the per-kilometre cost will still be around 10c/km,” he explains.
“At the same time, petrol or diesel in a similar sized vehicle is now about 80c/km, but the oil price is expected to double by 2012, and keep climbing, pushing that number to over R1.50/km. We have found that this ratio of between 90% and 95% saving in energy cost is valid around the world.”
Snyman says he hopes the South African public will take to the Joule, adding, however, that local consumers are “not really that loyal to their own, and many would choose a more familiar brand of car”.
He notes that people are likely to buy electric cars “only if they can really feel the benefit in their pockets. There will be supporters of green that will make up part of the early up-takers.”
Meiring argues that SA is not a particularly “green” market at this stage, and is lagging behind the EU in this regard. “Legislation, incentives, carbon taxes and so forth need to be put in place to open up the green market.
“However, SA has often been a leader in accepting and deploying new technology - ATMs and cellphones are two examples. Joule is a desirable proposition, even without its green credentials, and our research shows that the uptake in SA will be considerable.”
According to Meiring, markets change because there is an attractive alternative, or a cost advantage or incentive, or a regulatory change. “All three of these issues are now being addressed simultaneously for the first time - the last two by issues of oil price, energy security, and climate change, and the first by attractive offerings such as the Joule.
“By 2020 we will look around us and take electric vehicles as much for granted as we now do the cellphone.”
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