Selling the South African-made Joule electric vehicle (EV) presents as much a branding as an engineering challenge, says Optimal Energy CEO Kobus Meiring.
â€œIt’s not just an engineering project.â€
The Cape Town-based company has designed and developed the Joule, a five-seater lithium-ion battery EV with a top speed of a 135 km/h, and a range of 300 km.
â€œWe are going to build the Joule brand through a marketing fleet over the next two years,â€ says Meiring.
He hopes this move, and some government participation, will ensure the public open their wallets to buy the first South African developed car brand, rather than more established brands.
The second prototype of the Joule is already zipping around the Mother City.
â€œWe have conditional buy-in from government, however, this still has to be converted into contracts,â€ says Meiring.
Selling the Joule on the open market, here and abroad, may just become easier should the South African government show its trust in the brand by buying a number of these vehicles for its own fleets.
Governments have come to the party everywhere else EVs have been introduced, or where they are about to enter the market.
The US has envisaged a fleet of one-million EVs on its roads by 2015, with government providing $25-billion in soft loans to develop these zero-emission, plug-in cars.
In Europe, there is a E5 000 rebate on the purchase of an EV, Monaco offers E9 000, and Japan 800 000 yen.
The UK government offers a 5 000 pound subsidy, with EVs also exempt from licence fees and congestion charging, explains Meiring.
It is unlikely that South Africa, as a developing country, will offer the same benefits, though.
However, other possibilities that do exist is subsidising the battery, the most expensive part of any EV, through existing fuel tax, which is added on to every litre of fuel sold in South Africa, as well as active government procurement.
Government is a shareholder in Optimal Energy, through the Innovation Fund and the Industrial Development Corporation.
Taking the Joule to production will require a budget of R5,5-billion, says Meiring.
There is currently a shortfall in funding, but Optimal Energy is talking to several interested parties and possible investors, he adds.
Was one of the existing OEMs (original equipment manufacturers, or vehicle manufacturers) interested in buying into the Joule brand?
Meiring says he prefers not to answer that question â€“ yet.
Pilot production of the Joule is set to start in 2010, with volume production to kick off in 2012, starting with 500 right-hand drive units, and moving to 60 000 units in 2015.
Meiring says the company is still scouting for a suitable production location, but notes that â€œEast London is looking goodâ€.
Left-hand drive production will start in 2014, says Meiring.
By roughly 2016, a second-generation Joule will be launched and, somewhere in between, a Joule light-commercial vehicle, as well as a sedan and micro-EV.
Exports will start in 2013, with roughly 80% of the production volume destined for markets abroad.
â€œThe South African market is too small to manufacture only for local demand,â€ says Meiring.
Locally, he hopes government, corporate fleets, taxi operators, and affluent females and urban males will find the Joule an attractive proposition.
Pricing for the Joule â€“ although inflation will probably see this increase leading up to 2012 â€“ is between R235 000 and R278 000.
While customers will own the vehicle, they will only lease the battery, in an effort to contain costs.
Meiring argues that actual rand benefits will flow from the life-cycle cost of the Joule.
He says EV running costs will be much less than that of a standard internal combustion engine, as it has only moving part â€“ the electric motor â€“ which means servicing fees will be much lower.
Also, charging the vehicle at a standard wall-plug should cost less than 5 c/km, compared with 80 c/km in fuel costs for petrol or diesel cars.
As for the infrastructure required to roll out EVs nationally, Meiring says it is not that expensive, with home charging the most important factor, and shopping centres and office buildings then also rolling out charging points.
He anticipates that the launch of the Joule will create more than 10 000 local sustainable job opportunities.
CREATING AN EV INDUSTRY IN SA
Meiring says it is Optimal Energy’s aim to establish and lead an electric vehicle industry in South Africa, and to expand this expertise globally.
â€œWe have developed so many technologies in South Africa, but then we don’t make it ourselves; it gets commercialised somewhere else.â€
With the EV still really in its infancy, Meiring believes there exists a window of opportunity for South Africa to become involved.
â€œWe have never had an OEM brand in South Africa. A country with an OEM is different than one without. It functions on a different level.â€
Meiring believes South Africa can develop an entire industry around the Joule. This includes battery cell manufacturing, battery assembly and testing, electric motor manufacturing, and setting up a national test laboratory for batteries and drive trains.
He adds that the arguments for the continuous development of EV are plentiful, including the fact that it counters global warming, rising pollution, and that it provides energy security in a world with finite oil supply.
But, does South Africa have sufficient power supply to power a fleet of Joules, especially as the country suffers from a chronic electricity shortage?
Meiring notes that South Africa has a peak demand problem, and not a total energy shortage.
â€œThere is enough electricity available overnight to charge eight-million Joule’s doing 20 000 km a year, and South Africa’s total fleet is only seven-million vehicles strong.â€
Meiring says it was particularly difficult to convince would-be investors of the merits of EVs in 2004. However, everything has changed in a few short years.
Already technology has improved dramatically, with the earlier generation lead-acid batteries, with a two to four-year life-span and weighing in at 1 300 kg, being replaced with 300 kg lithium-ion batteries, lasting ten years or 200 000 km.
Meiring believes EVs will drop in price as production volumes increase.
He notes that the growing presence of electric vehicles at motor shows worldwide is an indication of the future of this technology.
â€œLast year in March there were three EVs at the Geneva Show. Then, in October, in Paris, there were around 30. In Frankfurt, to be held in two, three weeks time, there will be 60 EVs The market is just exploding.â€
* Meiring spoke at the Intelligent Transport Society of South Africa’s annual general meeting, held in Pretoria.
PUBLICATION: Engineering News
AUTHOR: Irma Venter
DATED: 28th August 2009