Every time the Joule turns out with the nattily-dressed minders at a motoring, technology or environmental jamboree, the spin is palpable. And no wonder, when the numbers never really stay the same.
The Joule will be very late to market, rather low on specs, and way, way over budget.
Ivo Vegter, ITWeb contributor
Initially, it was slated for full production in 2012. That won't happen. Being a writer, I have a bit of a glass house problem with deadlines, but the next one - according to a press release still available on the manufacturer's Web site - was 2013. Then the reports from the kinds of people who follow these things said 2014 is more likely. Yesterday, ITWeb reported that it would be green for go in 2015.
The production plans aren't the only numbers that have changed. Back in the good old days, the maker, Optimal Energy, was angling for R500 million in investment to industrialise the Joule. Not much later, it was asking for R1.5 billion in investment to take the prototype to full production. Last I wrote about the vehicle for CAR Magazine, a mere two years later, that number had skyrocketed to R7 billion. In July, the sharp-eyed reporters at Engineering News noted this was now more like R9 billion.
Early reports said its range would be 200km with a standard battery, and 400km using a double pack. This has since become 150km and 300km respectively, a decline of 25%, while battery technology has only improved in the intervening years.
The CAR report that said so also remarked that government had invested R250 million into the venture. It owns a 22% stake through the Department of Science and Technology's Innovation Fund. Additional funding has come from the Industrial Development Corporation. However, while early reports had the government funding at about R300 million, the most recent answer as to its cost to government involved a mere R125 million. According to Engineering News, most of the R9 billion will - one way or another - come from government anyway.
If you're confused by now, here's the low-down: the Joule will be very late to market, rather low on specs, and way, way over budget.
The notion that government is investing in profitable new industries that will create employment and earn export revenue is complete nonsense. It didn't work for the normal car industry. After 17 years, it still can't survive without subsidies that were supposed to last only seven years, and have recently been extended until 2020.
The industry employs 25% fewer people than it employed in 1995, which seems the exact opposite of what a government subsidy plan is supposed to achieve. The Joule is part of this grand motor industry plan. It set the ambitious target of producing 50 000 vehicles a year, in order to qualify for billions in subsidies and tax breaks that aren't even working to wean makers of the most popular luxury German automobiles off the taxpayer teat.
When all these facts are brought to the attention of government pooh-bahs by sceptical journalists, they get palmed off with another tall tale of future industrial success. Apparently, South Africa wants a lithium ion battery industry.
What on earth for? Isn't that what Japan was invented for? Why don't we just buy them from the mature companies that are at the forefront of research, have developed massive economies of scale, and supply the rest of the planet?
If it was a good idea to build a lithium-ion battery plant in South Africa, private investors would have jumped at the opportunity. And if it wasn't a good idea, private investors would have taken the risk, and lost only private capital. The notion that government can pick winners, subsidise them with taxpayer money, and hope that one day they'll become profitable is an economic delusion. It bleeds the country's economy of productive capital, and redistributes it into unproductive ventures, thereby making us poorer, not richer.
It isn't surprising to find that lithium ion batteries are already looking like dated technology. Government has probably never heard of sodium-ion batteries, but they appear to be three times better than lithium-ion for large-scale electricity storage applications. Unlike South Africa's lithium-ion plant, this technology isn't struggling to attract private capital.
There's a lesson in that for the Joule too. After all, electric vehicles will be on sale here much sooner than the Joule will make it to market. For a car launched in 2008, it should be quite embarrassing not to have first-mover advantage against imports such as the Nissan Leaf, which will start hitting showrooms by late next year. Already, Joule can't keep up with the market. That's entirely predictable when government makes the investment, picks the winners, and effectively insulates the companies they favour from market failure.
The government and the makers of the Joule will continue to miss deadlines, but they will spin the story and shamelessly fudge the numbers. The taxpayer will pay and pay. Maybe, one day, after having already paid over the odds for the research, development and manufacture of the vehicle, they might get to buy it at retail, where they can pay again for what promises to be an overpriced, outdated, underpowered piece of junk with a Proudly South African bumper sticker on it.
Granted, it looks cute.
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