SA’s Joule car aims to electrify car market


    THE Joule electric car is the first vehicle to be developed and manufactured by a wholly owned South African company, with the country’s other car plants being funded by multinational motor companies.

    Optimal Energy, the Joule car’s maker, is firmly aligned with the government’s second industrial policy action plan, which seeks to increase local automotive content and manufacturing.

    These activities are labour intensive and result in SA increasing its levels of beneficiation and economic activity. “Manufacturing — which constitutes a siz able chunk of our value-added production — has not enjoyed sufficient dynamism,” said Trade and Industry Minister Rob Davies in a speech in February.

    Optimal Energy says it will employ more than 2000 people in its assembly operation, while supplier and support activities could create a further 8000 downstream jobs. Once the plant is established and production volumes rise, the company believes local content value in the car could go as high as 65% — on a par with other local car plants.

    The company signed a memorandum of understanding with East London’s Industrial Development Zone so that commercial production should begin in 2013, reaching 50000 units a year by 2015.

    East London is not Optimal Energy’s only potential site. It has also considered the Coega industrial zone near Port Elizabeth.

    The project is being funded partly by the Industrial Development Corporation and the Department of Trade and Industry, while the Department of Science and Technology has just cut its funding to about R23m.

    Nevertheless, production plans are under way and although the car is expected to establish a local market for electric cars, the company says 90% will be exported. Kobus Meiring, CEO of Optimal Energy, says it will be exported to the UK and Commonwealth countries immediately, aiming to enter the

    C-segment of the market. This segment includes cars in the R235000 to R280000 price range.

    “We want to make it clear that we are not aiming at the green market as such, but rather the C-segment, in competition with cars like the Toyota Corolla,” he says.

    In SA, the car will be sold for about R235000. But for this, mass electric plug points and other supporting infrastructure are needed. Mr Meiring said this should not be a problem as those who can afford the car have access to electricity.

    The Joule will be marketed as a city car, with long distances not at first encouraged by Optimal Energy. “When we began to conceptualise the Joule electric car, we approached the likes of McKinsey for advice. They told us it would never work. Today, we understand that by 2020, 10% of world automotive production will be in electric vehicles,” said Mr Meiring.

    Toyota SA has also entered the “green” vehicle market with its Toyota Prius, launched in SA in 2005, but it is marketed in the premium vehicle sector, which the company says has done poorly because of the economic recession. Monthly sales of the Prius hybrid vehicle have averaged about 25.

    Andrew Kirby, Toyota director of sales and marketing, says the South African motorist is not yet prepared to pay more for a hybrid car, although electric car drivers will be exempt from a hefty carbon tax when the carbon emissions tax is implemented from September.

    Nissan Japan will start commercial production of its own electric vehicle range, which could be sold in SA in 2012.
    Finance Minister Pravin Gordhan said in this year’s budget speech the government hoped “to influence the composition of SA’s vehicle fleet to become more energy efficient and environmentally friendly”.

    This was in line with the Copenhagen Accord, in terms of which SA declared its intention to reduce greenhouse gas emissions 34% by 2020 and 42% by 2025.

    There are also incentives in the Automotive Development Action Plan to encourage local production and export. But Nissan SA has said that for more green vehicles to be sold in SA, there should be market education. “It must be a combined drive between government and industry,” says Mike Whitfield, CEO of Nissan SA.
    Business Day

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