Joule, a spearhead for the south African Electric Vehicle and Battery industries - by Diana Blake

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  • And Joule is going to help us do this
  • Joule, a spearhead for the south African Electric Vehicle and Battery industries - by Diana Blake

    1. 1. Kobus Meiring, Diana Blake, September 08<br />1<br />OPTIMAL ENERGY<br />
    2. 2. Diana Blake – May 2011<br />Joule, a spearhead for the south African Electric Vehicle and Battery industries<br />2<br />
    3. 3. What Challenges Are We Facing?<br /><ul><li>The 6.5billion people in the world today are consuming 1.4 earths, i.e. the global community is living 40% above its means
    4. 4. The supply is finite, but demand is growing exponentially – 9 billion by 2050, all striving to live like the first world
    5. 5. We are borrowing from the future to prosper and grow today
    6. 6. Our current way of life is not sustainable</li></ul>Diana Blake, May 2011<br />3<br />
    7. 7. Threat: Global Warming<br />Diana Blake, May 2011<br />4<br />
    8. 8. Risk Of Overshooting 2°C – 50%!<br />Diana Blake, May 2011<br />5<br />
    9. 9. Diana Blake, May 2011<br />6<br />Threat: Energy Security<br />Brent Crude on 11 May2011: $118/barrel<br />
    10. 10. A Massive Opportunity:<br />“Renewable energy, as a reaction to peak oil and climate change, is probably the most important economic boon that will occur in our lifetimes.” - Craig Shields<br />“Renewables are nothing less than the re-industrialisation of the whole planet.” - John Doerr<br />“No power on earth can stop an idea whose time has come” - Victor Hugo<br />Diana Blake, May 2011<br />7<br />
    11. 11. A New Paradigm is needed:<br />We need to use the present to improve the future<br />Nature does not negotiate!<br />Diana Blake, May 2011<br />8<br />
    12. 12. Current Transport Landscape<br />~800,000,000 vehicles in the world, doubling by 2030<br />>50% of world live in cities, 75% of city transport is by car<br />Overwhelmingly dependent on fossil fuels<br />Transport causes ~ 1/3 of energy CO2 emissions in the world<br />Energy security concerns around crude oil worsening<br />Market insecurity -> price volatility -> economic instability<br />Alternatives needed!<br />Diana Blake, May 2011<br />9<br />
    13. 13. Market Forecast<br /><ul><li>By 2020, 10% to 25% of global car production will be electric vehicles. (Frost & Sullivan, Renault, Betterplace, etc)
    14. 14. Global car fleet in 2010 – 800 000 000
    15. 15. Global car fleet in 2030 – 1500 000 000
    16. 16. 10 million will be electric vehicles
    17. 17. Globally, EV’s will not only take market from the (ICE) fleet – it is mostly new growth</li></ul>Diana Blake, May 2011<br />10<br />
    18. 18. Legislation & Incentives:<br />JAPAN:<br /><ul><li>Substantial rebate
    19. 19. New subsidies for EV manufacturers
    20. 20. Subsidised battery R&D
    21. 21. Currently building the largest Li-Ion battery manufacturing plant in the world (Matsushita Battery Industrial Co.)</li></ul>USA:<br /><ul><li>1000 000 plug-ins by 2015,
    22. 22. Advanced Technology Vehicles Manufacturing </li></ul>Loan Program (ATVMLP): $25 billion in loans<br /><ul><li>UK:
    23. 23. £5 000 subsidy
    24. 24. London – free parking, license, registration & </li></ul>exemption from congestion charge<br />ISRAEL:<br />70% tax on conventional cars, 10% tax on EV’s<br />CHINA: EV’s one of four national 25 year projects, $15bn government funding<br />DENMARK:<br />180% tax on conventional cars, 0% tax on EV’s<br />SOUTH AFRICA:<br /><ul><li>New Tax on Carbon Emissions
    25. 25. Investment in Optimal Energy for </li></ul>the development & production of the Joule<br /><ul><li>IDC, DST have launched battery initiatives
    26. 26. SABS have included EV’S in committee
    27. 27. IPAP2 to support SA EV</li></ul>EUROPE:<br /><ul><li>France – € 5000 rebate, France – Oneof world’s first Auto focused Li-Ion battery plants
    28. 28. Monaco – €6 000 rebate
    29. 29. Spain – 1 million EV’s by 2014
    30. 30. Portugal – 20% of gov fleets, 1100 charging stns</li></li></ul><li>The Solution:<br />Create a business & product that:<br />Meets all sustainability goals<br />Is attractive to the mass market<br />Is affordable to the mainstream<br />Makes business sense now<br />Makes use of Legislation and Incentives<br />Diana Blake, May 2011<br />12<br />
    31. 31. Proven Technology<br />1935: The decline of the electric vehicle was brought about and disappeared by 1935<br />1897: First vehicle with power steering – an EV. Electric self-starters 20 years before<br />appearing in gas-powered cars<br />1902: The Phaeton had a range of 18 miles, a top speed of 14 mph and cost $2,000<br />1859: Gaston Plante invented rechargeable lead-acid batteries.<br />1894 - 1935<br />1894 - 1935<br />1834: Thomas Davenport invents the battery electric car – batteries were not rechargeable<br />1921: Federal Highway Act. By 1922, federal match (50%) for highway construction and<br />repair (for mail delivery).<br />1900: All cars produced: 33% steam cars, 33% EV, and 33% gasoline cars<br />1910: Electric vehicle production peaked<br />1998: The Toyota RAV4 sport utility, the Honda EV Plus sedan, and the Chrysler EPIC minivan. These three vehicles were all equipped with advanced nickel metal hydride battery packs<br />1990: U.S. 1990 Clean Air Act Amendment, the U.S. 1992 Energy Policy Act, and regulations issued by the California Air Resources Board (CARB)., several states have issued Zero Emission Vehicle requirements<br />1990: GM shows their production EV initially named, Impact; later it was re-named the EV-1<br />2002: Toyota RAV4-EV retail sales; their estimated 2-year supply sold out in 8 months.<br />1960 - 2003<br />Source: Frost & Sullivan<br />2000 : The Honda Insight is the first production vehicle to feature Honda's Integrated Motor Assist system. The first-generation Insight was produced from 2000 to 2006 as a three-door hatchback.<br />1960’s: The first Battronic electric truck was delivered to the Potomac Edison Company in 1964. This truck was capable of speeds of 25 mph, a range of 62 miles and a payload of 2,500 pounds<br />1996 - 97: GM begins production of the EV-1 . Toyota Prius hybrid gas-electric vehicle unveiled at the Tokyo Auto Show<br />2003: ZEV Mandate weakened to allow ZEV credits for non-ZEV s. Toyota stops production of the RAV4-EV; Honda stops lease renewals of the EV-Plus; GM does the same for the EV-1<br />13<br />Diana Blake, May 2011<br />
    32. 32. Diana Blake 2011<br />14<br />14<br />This is the biggest and fastest change in the history of the automobile<br />
    33. 33. Optimal Energy’s Vision:<br />To establish and lead the electric vehicle industry <br />in South Africa, and expand globally.<br />Diana Blake May 2011<br />
    34. 34. Optimal Energy’s Principles<br />GREEN:<br />With the convergence of three critical factors – climate change, pollution, and energy security, new types of urban transport must be developed and implemented in order to sustain the current way of life<br />FORWARD THINKING, PROFITABLE:<br />This convergence, together with advances in lithium battery technology, enables Optimal Energy to develop a business case giving a high return on investment, and to become a globally recognized brand<br />LOCAL PRODUCTION, JOB CREATION:<br />With backing from the South African government, and with an intention to produce the vehicles in South Africa, the project will directly and indirectly benefit the local people and help to develop a nation<br />EXPORT:<br />With the goal to produce and sell 50 000 vehicles a year starting end 2013, Optimal Energy has a taken an aggressive strategy and wants to make an impression on the global automotive industry <br />
    35. 35. Optimal Energy’s Strategy:<br />Optimal Energy, will be responsible for:<br /><ul><li>development
    36. 36. industrialisation
    37. 37. production
    38. 38. marketing
    39. 39. distribution
    40. 40. retail
    41. 41. after sales support </li></ul>of electric vehicles under the Optimal Energy’s brand <br />OE focuses on EV specific areas optimising the use of existing suppliers and infrastructure in non-EV specific areas, to reduce capex, schedule and risk<br />Diana Blake, May 2011<br />17<br />
    42. 42. The Company<br />Founded in 2005, based in Cape Town<br />Strong Management Team:<br />Hi-tech development (Denel, SALT)<br />Automotive production, sales and marketing (Mercedes, BMW, MINI), First and second tier suppliers (Johnson Controls, Arvin Meritor, Schnelleke)<br />109 Employees: >60% B, M or PhD Engineers<br />World Class Associates: Universities, SABS, P3, EDAG, Zagato, Idiada, Hi-Tech Automotive <br />Strong Government support<br />Shareholders: Founders, DST-TIA, IDC, ELIDZ, EC<br />Diana Blake, May 2011<br />18<br />
    43. 43. Designer Keith Helfet<br />Education: <br /><ul><li>Graduated as mechanical engineer at the University of Cape Town
    44. 44. Completed the most prestigious automotive styling programme in the world – obtained Masters at the Royal College of Art in London</li></ul>Experience: <br />Joined Jaguar in the UK and eventually became the chief stylist<br />Designed a number of high-performance cars, such as the iconic XJ-220 and the XK-180 and F-Type<br />Position: <br />Consulting Design Director <br />
    45. 45. Optimal Energy’s Market Strategy<br /><ul><li>A globally competitive product</li></ul>The ultimate city car<br /><ul><li>Introduced into a rapidly expanding new global market</li></ul>10 million electric vehicles by 2020<br /><ul><li>Low volumes</li></ul>50 000 (can only be produced profitably at such low volume in SA – 5 Joules out of every 1000 EV’s sold globally)<br /><ul><li>Unique customer experience</li></ul>The Joule Store, integrated distribution, after sales<br />Diana Blake, May 2011<br />20<br />
    46. 46.
    47. 47. The Ultimate City Car<br /><ul><li>Safe - UN ECE safety standards, Euro NCAP 5 star
    48. 48. Beautiful - designed by Keith Helfet
    49. 49. Spacious - full five-seater, largest boot in class
    50. 50. Comfortable - quiet, no gear changes, single pedal driving
    51. 51. Green - zero emissions, regenerative braking, integrated PV panel
    52. 52. Convenient - never fill up, recharge at home, minimal maintenance
    53. 53. Nimble - 0 to 60km/h < 4.8s, 100-0km/h <3s, top speed 135km/h</li></ul>Practical - range 240km (NEDC) 300km (UDDS cycle)<br />Sensible - Energy cost <10% of conventional fuel<br />The Ultimate Ownership Experience<br />Diana Blake, May 2011<br />22<br />
    54. 54. Compact:<br />
    55. 55.
    56. 56. Joule<br />
    57. 57. Prototype Testing<br />
    58. 58. Joule Marketing Fleet<br />Diana Blake, May 2011<br />27<br />
    59. 59. Joule Internationally<br />Paris 2008:<br />1,432,972 Visitors<br />90 World premiers of which 30 were powered by new energies<br />2000 cars were exhibited<br />13 000 journalists from 92 countries<br />Highest international profile<br />We have been approached by 32 distributors from 12 countries<br />Geneva 2010:<br /><ul><li>Bigger than Paris
    60. 60. Very positive reception
    61. 61. >100 distributors
    62. 62. “Best EV at the Geneva Motor Show”</li></li></ul><li>The Market<br />Pilot fleets in global target cities from 2011 until start of production<br />First plant, and volume launch in South Africa in 2015:<br />General urban passenger market <br />Corporate & rental fleets<br />Government (national, provincial, local) and state owned companies<br />Exporting from 2015 (RHD, then LHD)<br />Export growing to >80% of total sales<br />UK first export market, then commonwealth, then EU, then the East<br />Diana Blake, May 2011<br />29<br />
    63. 63. Sales Forecast<br />OE along with F&S, and other industry leaders considered political, economic, social and infrastructural factors in finding the most attractive markets by city:<br />UK, Germany, Spain, Italy and France.<br />
    64. 64. <ul><li>49.7 Million People
    65. 65. GDP: US$ 350 billion
    66. 66. GDP Growth: 2.6%</li></ul>Pretoria:<br /><ul><li>BMW SA
    67. 67. Ford SA
    68. 68. Nissan/Renault</li></ul>Durban:<br />Toyota SA<br />East London: <br /> Mercedes Benz <br />Port Elizabeth: <br />General Motors<br />Volkswagen<br /><ul><li>470 000 CBUs
    69. 69. US$ 15.32 billion
    70. 70. Exports: 230 000 CBUs
    71. 71. Imports: 163 000 CBUs
    72. 72. Sales: ~500 000 per year</li></ul>Economic Activity<br />Local OEMs<br />Vehicle Production<br />South Africa<br />
    73. 73. East London IDZ<br /><ul><li>Over 230 ha of prime industrial land fully serviced sites
    74. 74. Proximity to transport networks (2,5 km from EL Airport and 6km from EL’s river port , rail link to all major South African cities)
    75. 75. Direct access to export and domestic markets</li></li></ul><li>Further Industry Opportunities<br />Electric motor manufacturing<br />• Battery cell manufacturing<br />• Battery assembly and testing <br />• Power electronics at automotive prices (chargers, high power relays, high power fuses, HV connectors, HV cables)<br />• Electric compressor, peripheral components <br />• Battery handling equipment<br />• Automotive electronics (ECU’s, displays)<br />Charging infrastructure & equipment<br />Battery financing<br />EV testing & certification facilities for global OEM’s<br />Diana Blake, May 2011<br />33<br />
    76. 76. South African policy: IPAP2<br />12.4.7 Commercialise South Africa’s electric car<br />Nature of the intervention: Provision of appropriate support to encourage local manufacture of EV’s and related components, installation of infrastructure for such EVs, creation of testing facilities, provision of demand stimulation mechanisms and public education on the use and benefits of alternative energy source vehicles.<br />Economic rationale: Direct and positive spillover effects of developing a local electric vehicle coupled with the creation of the broader regulatory environment for such vehicles.<br />Outcomes: Creation of a legislative and regulatory environment to allow the operation of electric vehicles, relevant testing infrastructure for electric vehicles, local manufacturing for domestic and global markets, initiation of charging infrastructure and educational campaigns on electric vehicles.<br />Kobus Meiring, Diana Blake, 2011<br />34<br />12.4.7 Commercialise South Africa’s electric car<br />Nature of the intervention: Provision of appropriate support to encourage local manufacture of EV’s and related components, installation of infrastructure for such EVs, creation of testing facilities, provision of demand stimulation mechanisms and public education on the use and benefits of alternative energy source vehicles.<br />Economic rationale: Direct and positive spillover effects of developing a local electric vehicle coupled with the creation of the broader regulatory environment for such vehicles.<br />Outcomes: Creation of a legislative and regulatory environment to allow the operation of electric vehicles, relevant testing infrastructure for electric vehicles, local manufacturing for domestic and global markets, initiation of charging infrastructure and educational campaigns on electric vehicles.<br />Key Milestones<br />1. 2010/11 Q3 Approval of investment support measure for the manufacture of the electric vehicle and components.<br />2. 2010/11 Q3 Development of a Government position on the purchasing, demand stimulation, infrastructure for charging, testing facilities and public education regarding EVs<br />3. 2011/12 Q1 Roll-out of public education on EVs<br />4. 2011/12 Q2 Commissioning of the plant<br />5. 2011/12 Q3 Development of testing facilities for EVs<br />6. 2011/12 Q4 Commencement of plant construction<br />7. 2013/14 Q4 Start of production<br />Lead department: DTI<br />Supporting departments / agencies: DoT, DST, Provincial Governments and targeted Metros<br />Economic impact:<br />An estimated 160,000 direct jobs will be created in the industry in the next ten years. Investment levels exceeding R20 billion are expected to take place in the next four years with an expected further annual R3 billion for the following six years. Greater localisation of componentry will lead to an improvement in the trade balance.<br />
    77. 77. IPAP2<br />Key Milestones<br />1. 2010/11 Q3 Approval of investment support measure for the manufacture of the electric vehicle and components.<br />2. 2010/11 Q3 Development of a Government position on the purchasing, demand stimulation, infrastructure for charging, testing facilities and public education regarding EVs<br />3. 2011/12 Q1 Roll-out of public education on EVs<br />4. 2011/12 Q2 Commissioning of the plant<br />5. 2011/12 Q3 Development of testing facilities for EVs<br />6. 2011/12 Q4 Commencement of plant construction<br />7. 2013/14 Q4 Start of production<br />Lead department: DTI<br />Supporting departments / agencies: DoT, DST, Provincial Governments and targeted Metros<br />Economic impact:<br /> An estimated 160,000 direct jobs will be created in the industry in the next ten years. Investment levels exceeding R20 billion are expected to take place in the next four years with an expected further annual R3 billion for the following six years. Greater localisation of componentry will lead to an improvement in the trade balance.<br />Kobus Meiring, Diana Blake, 2011<br />35<br />12.4.7 Commercialise South Africa’s electric car<br />Nature of the intervention: Provision of appropriate support to encourage local manufacture of EV’s and related components, installation of infrastructure for such EVs, creation of testing facilities, provision of demand stimulation mechanisms and public education on the use and benefits of alternative energy source vehicles.<br />Economic rationale: Direct and positive spillover effects of developing a local electric vehicle coupled with the creation of the broader regulatory environment for such vehicles.<br />Outcomes: Creation of a legislative and regulatory environment to allow the operation of electric vehicles, relevant testing infrastructure for electric vehicles, local manufacturing for domestic and global markets, initiation of charging infrastructure and educational campaigns on electric vehicles.<br />Key Milestones<br />1. 2010/11 Q3 Approval of investment support measure for the manufacture of the electric vehicle and components.<br />2. 2010/11 Q3 Development of a Government position on the purchasing, demand stimulation, infrastructure for charging, testing facilities and public education regarding EVs<br />3. 2011/12 Q1 Roll-out of public education on EVs<br />4. 2011/12 Q2 Commissioning of the plant<br />5. 2011/12 Q3 Development of testing facilities for EVs<br />6. 2011/12 Q4 Commencement of plant construction<br />7. 2013/14 Q4 Start of production<br />Lead department: DTI<br />Supporting departments / agencies: DoT, DST, Provincial Governments and targeted Metros<br />Economic impact:<br />An estimated 160,000 direct jobs will be created in the industry in the next ten years. Investment levels exceeding R20 billion are expected to take place in the next four years with an expected further annual R3 billion for the following six years. Greater localisation of componentry will lead to an improvement in the trade balance.<br />
    78. 78. Future Designs<br />
    79. 79. Optimal Energy’s current status<br /><ul><li>Prototype development complete (engineering prototypes, mules, display vehicles and marketing prototypes)
    80. 80. Set up to produce pilot fleet (5 per month)
    81. 81. Starting industrialisation to reach start of production by 2015 – detailed plan, schedule, costing ~US$1.3b
    82. 82. Cooperating with very strong partners – EDAG, Idiada, Zagato, etc.</li></ul>Diana Blake, May 2011<br />37<br />
    83. 83. Optimal Energy’s current status contd.<br /><ul><li>Ready to explore relationship with OEM’s as strategic equity partners
    84. 84. Designs, names, brands protected internationally
    85. 85. Strong brand built internationally
    86. 86. Unique retail model developed, can be rolled out internationally quickly and cost effectively
    87. 87. Strong SA government support built – investment, IPAP2</li></ul>Diana Blake, May 2011<br />38<br />
    88. 88. Business Highlights<br />Start of Production in 2015<br />Plant sized for 50 000 p.a. over 2 shifts<br />ELIDZ is the preferred site<br />Sales peak at ~73 000 units p.a. (production limit)<br />Joule Generation 1 in production for 7 years<br />Total Investment Requirement is ~USD 1.3bn<br />Projected IRR is 27.7%<br />1 350 OE Assembly Jobs, 6 200 Indirect, 7 550 in Total<br />Investment Commitment Needed in 2011<br />
    89. 89. Kobus Meiring, Diana Blake, September 08<br />40<br />OPTIMAL ENERGY<br />Thank You<br />

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