South Africa’s Tesla – and what caused its demise

In 2004, a year after Tesla was incorporated, a group of South African engineers joined forces to develop an electric vehicle (EV) in response to growing concerns about global warming.

Kobus Meiring, Mike Lomberg, Jian Swiegers, and Gerhard Swart co-founded Optimal Energy in 2005 to build the country’s first electric vehicle.

In December 2005, they received R15 million from the Department of Science and Technology’s Innovation Fund to build a prototype.

The team used existing technologies and off-the-shelf components for the body, chassis, and interior.

Most of the development went into battery, electric drive, and vehicle control systems, which were new technologies at the time.

In October 2008, Optimal Energy unveiled its first electric car, the Joule, to the general public at the Paris Motor Show.

South African-born Jaguar car designer Keith Helfet designed The Joule and showed the same flowing lines as his other trademark vehicles.

After some interior and exterior changes, Optimal Energy showcased the new Joule at the 2010 International Motor Show in Geneva.

This version of the Joule, which was hand-built near Port Elizabeth by Hi-Tech Automotive, was punted as being close to the planned production version.

At the time, Optimal Energy said full-scale production of Joule would begin at the end of 2012, with cars in showrooms by mid-2013.

Key design goals for the finished product included a range of 230 kilometres, a freeway cruising capability of 135 km/h, seating for five, and a 4-star NCAP safety rating at a retail price of R245,000.

As the South African electric vehicle market was limited, the Joule was aimed at the budding European market.

However, despite the excitement around the Joule, Optimal Energy shut its doors in 2012.

It raises the question of what went wrong.

Optimal Energy co-founder Gerhard Swart explained that advancing from the prototype stage to manufacturing thousands per year was complex.

It would have taken around four years and required an additional R9.8 billion investment to take the Joule into volume production of 50,000 per year.

Optimal Energy could not secure funding from existing or new investors, and the project was stopped in its tracks.

Swart said Optimal Energy and the Joule EV were a casualty of the “innovation chasm” – the inability of academic research to reach the market as products and services.

The Joule EV project presented a strategic opportunity for South Africa to join the ranks of the full-blown automotive industry.

However, it was difficult for the funders to grasp the value of the opportunity as it was unlike typical innovation projects they had previously backed.

Swart said Optimal Energy’s demise might appear to have been caused by the significant budget required to complete the project.

However, he argued that the project would have been successful if they had addressed issues which saw them fall victim to the innovation chasm.

Swart said the common thread through all the factors that contributed to the demise of Optimal Energy is communication.

“Communication about process, communication about strategy, and communication about successes and failures,” he said.

“At some point, whatever the reasons may be, the investors lost confidence that the Optimal Energy plan was executable.”

This could have been addressed by better communication with all stakeholders.