It's not as if we couldn't see this coming. The Joule, South Africa's much-hyped electric car project, has been “mothballed” by its maker, Optimal Energy. This is bureaucratese for “written off as a really bad idea”.
In the make-believe world of subsidised pipe dreams you can screw up over and over again, and be hailed as a visionary hero.
Ivo Vegter, ITWeb contributor
It shouldn't come as any surprise. It was painfully obvious that the people behind the Joule, which includes Kobus Meiring, the mastermind of South Africa's super-expensive but spectacularly failed attack helicopter project, the Rooivalk, were living in a little bubble of fantasy and illusion.
Their best skills? Demonstrating prototypes of products nobody wants to buy, burning vast amounts of taxpayer money, and sucking numbers out of their thumbs.
One astonishing moving target was the budget to commercialise the vehicle. As documented in an ITWeb column last year (and another in CAR magazine), this changed over time from R500 million, to R1.5 billion, to R7 billion, to R9 billion. Amortised over expected production, that works out to a hefty R180 000 per vehicle in sunk costs. At a projected price tag of R250 000, they'd have to sell 36 000 of them just to break even, assuming zero operational costs.
Now I know inflation is a flea-bitten cur, but there's a lot of late-night spreadsheet fiddling going on in those numbers. This fast-rising appeal for vast riches might have suggested to private investors that the spreadsheet jockeys didn't really know much about what it really would take, and that the number might rival South Africa's education budget before long.
The deadline for starting production was a simple Excel formula. Target-year equals current-year plus four. It was always plus four. While other electric car projects were already in production, the car that was launched with much fanfare at the 2008 Geneva Motor Show, and won a best-of-show award, was last seen aiming for 2015. That's seven years after the prototype launch, and 10 years after Optimal Energy was founded on the back of the first nine-figure government cheque. I bet you could find more modern vehicle designs at your local scrap-yard, and for cheaper too.
As if the inflation from millions to billions wasn't magical enough, the bald-faced prestidigitators pulled an even more extraordinary made-up number out of their top hat: the number of vehicles they were going to build. Originally, a production target of 4 000 was mentioned. Compared with rivals that already are in production, this was merely ambitious. It was in the ballpark of reasonable if optimistic projections.
Then someone alerted them to the subsidy that South Africa offers to manufacturers who can account for 50 000 locally-made vehicles, and lo! The production target magically became 50 000. Not because they suddenly found a hitherto unnoticed 46 000 potential customers for an over-priced, over-budget, over-styled, over-weight, over-deadline toy, mind you. After all, competitors who were testing the international market for electric cars were struggling to even reach four-digit sales volumes. No, this number was completely imaginary, motivated entirely by rent-seeking opportunism. And, presumably, the fact that 4 000 sales would return only R1 billion minus salaries to investors.
I wasn't the only sceptic, nor was I the first. Motoring specialist Rob Handfield-Jones, for example, has been making these arguments for years.
When Optimal Energy's marketing director, Diana Blake, hyped up the car at last year's NetProphet Conference, she mentioned the involvement of the Rooivalk people as a feature, not a bug. “They haven't sold any of those,” she told the audience, “but you shouldn't hold that against them.”
Of course you shouldn't. Failure of government-funded projects is never anyone's fault. In the real world, you might get fired and never work in the industry again, but in the make-believe world of subsidised pipe dreams you can screw up over and over again, and be hailed as a visionary hero, ahead of your time.
But please, stop showering these clowns with taxpayer millions. To date, about R300 million has been burnt on this project. The company has now floated a madcap plan of turning the little car's drive train into a platform for electric buses. Obviously. If thinking small doesn't work, think stupidly big. They just keep vomiting ideas, don't they? My belly is sore from laughing.
Let them burn their own damn money, or the cash of really stupid private investors if they can find any. My bet is they won't. Because stupid ideas are stupid.
When the Joule's cancellation (for that is what it is) was announced, Vuyisa Qabaka appealed to the Western Cape provincial government to rescue it. Qabaka is the “chief connector” at EmpowerWeb and a director at the South African Black Entrepreneurs Forum. He became moderately famous when Trevor Manuel singled him out over a “Tip for Trevor” two years ago, in which he proposed that the state should invest more resources in helping people start their own businesses.
“Prov govt should consider rescuing the Joule electric car project. Would be good for Atlantis. I can help,” he ventured in a Twitter message directed at Western Cape premier Helen Zille and finance minister Alan Winde, though the car was supposed to be produced in the blighted Eastern Cape. This proposal seems at odds with the mission of the SA Taxpayers Foundation, an apparently defunct organisation of which Qabaka was once a prominent member, and which billed itself as “a South African non-partisan NPO which advocates prudent expenditure of government revenues in the public's best interests”.
Frankly, if after all this there are still Joule-boosters left, they are living in denial, sustained only by promises, lies and pathological self-delusion.
If rescuing the Joule is top of a list of useful things to do with a spare R9 billion or more of tax revenue, the list is upside down.
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