Is Africa Ready for Electric Vehicles?
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This Courier and tutor webinar was sponsored by Agilitee Africa. He introduced as speakers Dr Mandla Lamba, CEO of Agilitee Africa; Kriekie Du Plessis, President of Agilitee Afrique; and Avon Middleton, editor of TopGear Magazine South Africa. It was moderated by award-winning broadcaster Oliver Dickson.
Dickson: Mandla, please tell us where is Agilitee now?
Lamba: We started as Agilitee, but now the business has spread across the world. There are partnerships with Absa and Capitec. We are the leading electric vehicle company in South Africa; we recently entered into an agreement with grad cars that will allow us to build our own charging points, which will make us the largest electric vehicle operator in the country.
We have partnerships with Indian company EbikeGo and other local companies. I also own a business called Verityhurst; I want to list Agilitee on the JSE; I own 34% of the company.
What is the product offering that you have at the moment?
We have the Wild Grace motorcycle, which is a personal transport vehicle and sells for R135,000; we have the LoadEX, which is a delivery scooter, which sells for Rand 35,000; there is the student cycle called Return to Freedom or RTF. There was supposed to be a fourth vehicle, but we were hit by the Covid-19 pandemic and containment; this is Agilitée Somizi.
Avon, what do you think of consumers who are reluctant to enter this new market, but with prices this low, they might be drawn in?
Middleton: The electric vehicle landscape is something consumers definitely worry about. It is an unsupported industry at present. There are load shedding concerns. Gasoline vehicles are better now. The media have a role to play in letting consumers know that electric vehicles are acceptable and that they have many benefits. Price is essential and Agilitee is able to offer products at a good price, which is essential for small businesses affected by Covid-19.
Tell us about the four franchises, where battery charging and swapping can take place?
Du Plessis: The first is Agilitee Expand for the national footprint, which is like a normal dealership where you can buy scooters and cars; the second is Agilitee Express, which will be present in shopping centers and urban areas; the third is Agilitee Mini X, for rural areas. This is an exciting container concept, where you can top up bikes, there will also be internet, a cafe and you can rent or buy the bikes. There will be training for sales staff, and some franchised establishments will be training grounds. Safety is a top priority, but electric scooters are much easier and lighter to drive than gasoline vehicles. We are delighted, this is a first in the automotive industry. All South Africans can become entrepreneurs, which will promote mobility, which is a right and not a privilege. The fourth franchise is still a secret!
Does Absa provide funding for all franchises?
Du Plessis: The Mini X starts at R 250,000, the Express at around R 500,000 and the Expand at R 1.5 million, depending on the franchise placement. Franchisees must follow a six-step application process; Absa will finance 50% for franchisees.
Is franchising an attractive option at the moment? People don’t go to dealerships as much as they used to.
Middleton: The retail market is changing. People used to visit dealerships and test cars; now they do a lot of that online, and the dealerships deliver vehicles. But you still have to maintain your vehicle, so the dealers will still be around for a while. But people are still very slow to buy EVs; in 2020, there were only 100 sold, and that number has not increased much this year. So these franchises look great as a future concept, but don’t look so good at the moment. Electric vehicles are a good option for large businesses when it comes to buses and scooters, but consumers are still worried about electric vehicles today.
People who install charging stations plan to make money only in the distant future, perhaps five years from now, when there is a massive adoption of electric vehicles; isn’t that a pretty scary concept for franchise owners, and for you as a business owner?
Lamba: We will soon receive 50 charging stations and the next 50 before Christmas. It is not easy for an industry if it is not supported by the government. It is something that can generate revenue for the government in the long run. Agilitee has realized that this is a long term thing and that it needs to build the infrastructure as well as sell the vehicles. We pray that the national government will join us, but we have the funds and the patience to wait. We hope that as the infrastructure is built it will promote adoption.
If I buy a franchise and cannot cover the costs due to low sales, will there be support?
Du Plessis: We had to adopt a new form of franchise, just as technology evolves. Agilitee offers a lease-to-own option and teams that will work with franchisees to help them achieve their goals.
Lamba: We don’t sell vehicles; only franchisees do it. We have no doubt that we will be successful. We are the first company to swap batteries for free, which is a great option for a buyer who no longer has to buy gasoline. “I am convinced that our model will suffice. “
Tell us about supplier financing and other options for franchisees?
Lamba: We will consider each case on its merits. We built an Agilitee dealership in Cape Town ourselves, without waiting for funding, which can now be bought out by a franchisee.
Who bears the cost of replacing the batteries?
Agilitee pays a percentage of the cost. I think by 2026 there will be a lot of people buying electric cars, and by 2030 there will be no combustion engine cars. So if you arrive early as a franchisee, you will be smiling.
Will faster charging be possible in the future?
Middleton: Technology is advancing rapidly and large companies are investing a lot of money in advancing charging technology. I recently drove an electric vehicle that connects to my smartphone, and there were so many options available, it was awesome. The EV space will grow as fast as our phones. Right now you will get a wall box to charge your electric vehicle; and questions arise as to whether different car manufacturers’ chargers will work for other makes of cars. The things you see in the movies are already on the maps; charging times will become much faster in the future.
Lamba: Agilitee is building a double cabin bakkie that partially recharges. We acquired a business in Zimbabwe and sold over 30 electric vehicles there. These cars charge from wall boxes at home, which run on solar power. I believe there is already progress in recharging.
Questions
Will Agilitee get involved to help franchisees run their business?
Lamba: Yes, there will be a team to hold your hand until it is felt that you are on your feet; it is your business, but we provide support. The type of profit you make will depend on the region you are in.
What is the weight limit of the Laudex and all the other vehicles you offer?
Lamba: Agilitee bikes have an incredible ecosystem; all bikes can be tracked with phones, and how much they carry, so if a delivery guy picks up his girlfriend, you’ll know. Facial recognition technology is provided with every bike; you can add an extra person, but no one can steal these bikes: they are smart. We are pioneers not only in Africa, but in the world. All of our electric vehicles are heavy, and that’s because of the battery.
Regarding the share structure, when can shareholders expect to receive dividends on their shares?
Du Plessis: We must first establish ourselves in the country before we can focus on profits.
Lamba: We’re closing our crowdfunding exercise on July 2, for good. We have refused a large number of corporate supports to allow Africans to become shareholders of Agilitee. It took us a long time to raise the funds, but when the business takes off it will change a lot of lives. There is no institutional actor involved, only the crowd. For those wishing to buy last minute stocks, you can call the Agilitee office at 011-3670636.
How many stocks will you be exhibiting when you sign up for JSE?
Lamba: It would be unwise to say how many more. Agilitee South Africa was acquired by Visual Inernational Holding LTD in a share swap, which currently has 401 million shares.
What is the cost of maintaining the bikes and who is the partner involved?
Lamba: We can’t show that yet, but it’s the biggest service company in the world. A three year program is part of the package when you buy the bike.
What is the marketing campaign all about right now?
We have a budget of over R10 million for the next few months, for the brand and for the vehicles. We will be doing marketing for the dealers, so the franchisees don’t have to worry about it. We will promote each franchise to the best of our ability. The Cape Town concession is opening soon.
Closing remarks
Middleton: TopGear South Africa is committed to educating the public about electric vehicles. We’ve got a big feature planned for World Electric Vehicle Day on September 9th. I have driven a lot of electric vehicles and they are amazing. There are six other electric vehicles that will be launched before the end of the year, by the biggest brands, which are pushing this market. New electric vehicles have a long range on a charge, and I encourage the public to buy them; I am a big fan!
Lamba: Many jobs have been lost, and many will not be recovered. The government must support industries that create new jobs. The electric vehicle industry will create jobs; I ask the government to support it.
For more information visit: https://www.agilitee.africa
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