SA’s Joule cash-strapped but Government shareholders not unduly worried
CASH PROBLEMS have again slowed the rollout of South Africa’s electric-powered car – the Joule – pushing it farther into the distance. Government shareholders in the project aren’t overly concerned about the delays in producing the Joule but the situation may jeopardise SA’s potential to develop an electric vehicle component sub-industry.
Optimal Energy – the Cape Town-based company responsible for the development and marketing of the Joule – has quietly changed the release date of the car to 2014. It’s the second postponement since the car’s unveiling at the Geneva International Motor Show in 2008.
Early last year – while exhibiting the Joule at the Paris Auto Show – Optimal Energy voiced its intention to start production in 2012 and to have 100 units on SA’s roads in time for the 2010 Soccer World Cup. Neither plan worked out.
“We’d love to be in the market right now but it’s all about the money,” says Optimal Energy sales and marketing director Diana Blake.
Optimal Energy is 35,6% owned by the Industrial Development Corporation (IDC) and 43% owned by the Department of Science and Technology (DST). The two have so far given Optimal Energy R260m in funding to build six prototypes of the Joule but the company needs another R10bn to construct and equip an assembly plant in the East London Industrial Development Zone and roll out the first batch of Joules to the public.
“We aren’t unduly concerned, as we’re currently part of the process looking at the options for commercialisation,” a representative of the DST told Finweek. “The DST, technology innovation agency and the IDC are currently embarking on a number of initiatives, which include engaging strategic partners – at different parts of the commercialisation value chain – to ensure the vehicle is commercialised.”
The plan is for the Joule to have a 70% SA-made component content, which is in line with Government’s view of improving the sustainability of SA’s downstream vehicle industry and its Automotive Production and Development Programme, which becomes official in 2013.
Technology to develop major parts – such as its engine – isn’t yet available, but Blake is confident SA’s manufacturers can emulate the process operating overseas once the electric car industry really gets going. “There’s an estimation that electric cars will gain 5% to 10% of the world car market and that translates to 50 000 vehicles/year,” says Jimmy Price, owner of East London-based Hi-Tech Automotive, which built the first six Joules. “The market for electric cars is there and it’s growing.”
Blake says the British and European markets – where the majority of Joule exports will be heading – are very responsive to electric vehicles and starting a component manufacturing industry in SA could also take advantage of supplying manufacturers overseas.
The problem is that the Joule’s competitors aren’t resting on their laurels. General Motors’ Chevrolet Volt, which went on sale in the United States last month, was named car of the year at this year’s Detroit Auto Show. According to media reports, 500 units of the Volt have already been sold and 10 000 units are due to be produced this year. Meanwhile, Nissan’s Leaf is also already available for order in the US.
Blake isn’t worried. She says the pie is getting bigger and Optimal Energy will be satisfied with “a smaller slice of a bigger pie”.