GridCars – Onto the Grid
GridCars tell us why South Africa is ready for an explosion in electric vehicle usage.
GridCars was established in 2000 with the goal of establishing a three-pronged approach to the industry. They would build electric vehicles, charge stations and management systems for both EVs and charge stations.
By 2007 the company was developing its own vehicles, with quite a few prototype electric vehicles, particularly in the mining space. However, developing, testing, patenting and launching electric vehicles from scratch proved to be an extremely cash-hungry business, and so from 2012 GridCars changed direction.
“From 2012 we started focusing on software charging systems, management and backing systems, financial systems, clearing and roaming systems,” says Winstone Jordan, CEO of GridCars. “We built all of those as well as our own charging hardware and in 2017 we acquired three-quarters of the company resulting in investment in driving infrastructure on the roads.”
Today GridCars controls the largest fast charger network in South Africa by far, with 50 fast chargers.
“It’s a dominant position in that we have that infrastructure and we’ve developed all of our software in-house,” Jordan explains. “We know our software incredibly well and can make changes and customisations for our clients. So if, for example, a fuel company needed changes we could respond very quickly.”
Preparing for an Electric Future
While the need for a growing electrical vehicles sector is obvious, the growing market is facing considerable challenges, particularly in South Africa.
“We’re the only country in the world with a penalty on electric vehicles,” Jordan points out. “There’s a 25% tax on electric vehicles versus an 18% tax for other vehicles, which is slowing the uptake in the market. That means slow growth and a lot of big OEMs are saying it’s not worth coming to South Africa yet because they can make more in other markets. Once we’re rolling out infrastructure there’s a lot of issues you wouldn’t encounter in Europe, that limit supply. We have a local system where you share electricity with your neighbour, for instance, which can be disruptive for charging infrastructure.”
GridCars has rolled out a broad enough infrastructure that it is able to overcome most of these problems, and while the promotion of electric vehicles themselves is something GridCars is happy to leave to vehicle manufacturers, the company will work with those manufacturers to align messaging and spread the word that, taxes aside, electric vehicles are simply cheaper to run.
“Our biggest drive is to educate the government,” Jordan says. “But also we’re finding ways to work within those constraints because there are exemptions for vehicles under 800kg, and from an efficiency and convenience point of view electric vehicles really are better.”
This is an urgent priority, as Jordan argues, “We can’t afford to wait. We need that saving, so we need to adopt electric vehicles faster. If you have petrol in your vehicle in Zimbabwe you probably stand in line for a day to refuel. Most people with petrol cars would send someone like their driver when they hear the station is getting fuel, but with electric vehicles that goes away. That convenience and cost-saving are really important in African countries and we’ll be seeing a big adoption.”
Meanwhile, GridCars is serving the whole of South Africa with a broad infrastructure network and a small, dedicated team.
“We’ve not got a huge team. We have nine people and from a broader portion of our network we have subcontractors because South Africa is really large,” Jordan says. “We can’t service the whole country from our offices, so we look to work with partners and give them the right level of training. That support is a lot more technical than you would have for another electrical appliance. We spend a lot of time making sure our installers are up to scratch and at a standard we can be comfortable with and get that consistent across the board.”
GridCars, like all businesses, saw an impact from the arrival of the COVID-19 pandemic, although it was well-positioned to deal with many of the challenges the crisis brought.
“I think as a company it hasn’t affected us directly. The call centre was easy to move to remote working. The work we’re doing is with computers,” Jordan tells us. “We had a month off where we weren’t able to work at the normal warehouse but soon that got back on track.”
While work hasn’t necessarily been disrupted, the market has been.
“We’ve seen a reluctance to spend money. We operated right through the COVID period and everyone was as productive if not more so, but from a sales and network perspective, we dropped immensely. We had literally zero use for three weeks,” Jordan says. “That’s where we’ve seen the difference. We’re now back up to 18% of pre-COVID levels, but sales are still slow, people are still reconsidering. We’ve seen a couple of biggish deals where they’ve gone on hold rather than been cancelled, so that’s the biggest impact to us.”
However, GridCars took this quiet period as an opportunity to work on projects the company otherwise wouldn’t have had the capacity to pursue.
“We took it as an opportunity to do the things we don’t often get to do. We tightened our admin processes, made sure call centre processes are documented. It’s helped us to be more efficient and grow more without having to grow the staff compliment necessarily,” Jordan recalls. “We’re taking a strong active role in social media making sure people know the network is open, so from that perspective we’ve made the business more efficient to serve more customers with the same resources. We are part of a listed entity that supports the company strongly, especially during the rollout of charging infrastructure. What we’re looking at now is working with Solareff on joint projects to push both sides, generating and spending energy to open up new market and opportunities.”
This investment is worthwhile, as Jordan believes that South Africa is currently in a position for electric vehicles to take off in a big way.
“I think we’re at an interesting point now where, as a country we are really undersubscribed on charging infrastructure. We’ve got 1,000 electric vehicles and 250 charging stations, that means four vehicles to a station, in other parts of the world it’s more like 20 vehicles to a charging station,” he says. “So we can wait for usage to pick up or get more aggressive pushing electric vehicles. That’s our strategy, to drive the sales a lot harder. The more visible the infrastructure is to people the more they will see it will work and that this is the future. We’re not sitting back and waiting for vehicle numbers to catch up. We’ll find creative ways to deploy infrastructure through strategic partnerships and over the next year moving aggressively into other African countries. The idea is to start spreading the technology and the message further into central Africa.”