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Does the channel dream of electric cars?

With electric vehicles on the horizon, has the time arrived for the channel to capitalise on this potentially lucrative new market? 

There's no doubt electric cars will arrive on our shores sooner or later. (123RF)

 

While pure electric cars aren’t yet commonplace in South Africa, several European countries have set dates by which sales of gasoline cars are expected to end. There’s no doubt electric cars will arrive on our shores sooner or later.

From the channel perspective, these vehicles will inevitably be packed with technology; furthermore, the infrastructure required to maintain them, not to mention peripheral services, will likely also rely heavily on technology.

This, then, opens up a range of potential new markets for those channel players with enough foresight to capitalise early.

Setting the scene

The first challenge, before anyone can think of exploiting this market, is to significantly increase the adoption rate of such vehicles in South Africa, says Riaan Graham, sales director in Sub-Saharan Africa at Ruckus Wireless.

“Although the developed world is already moving in this direction, there’s virtually no local demand for these vehicles at present. This may be partly due to the fact that these cars are currently fully imported, meaning they’re especially expensive. Couple this with the fact that government hasn’t really put any incentives in place to encourage adoption, and it’s no wonder few people are interested in going electric right now,” he says.

“Furthermore, South Africans have suffered enough electricity challenges in recent years to be concerned as to whether making the investment in electric cars will be worthwhile.”

In September 2017, Alviva Holdings’ Solareff subsidiary acquired 75% of Gridcars, a Pretoria-based developer of electric vehicle charge point software management systems and supplier of charge points. Gridcars’ MD Winstone Jordaan says he has no doubt the future of the automotive industry lies with electric. “The trouble is that even if we take this as the point of departure, too many people view it as something we only have to worry about in ten or 20 years’ time. However, we need to start building incrementally towards it now.”

"This means not only looking at how the market will evolve realistically, and targeting development in those market sectors where we already have some of the technology available, but also training the youth. We will need to educate the next generation to be able to understand and cope with the core technologies that will be developed for this sector.”

Channelling the right energy

As far as channel opportunities go, Jordaan foresees the biggest ones coming more from the ‘connected car’ side – something that should develop in conjunction with electric vehicles – as well as for the development of specialised apps related to electric cars, for example a map solution that highlights where various charging stations are.

“Gridcars was established to look into this side of things, and we’ve been developing back-end systems for this industry for nearly ten years now. We’re building a single, cohesive back-end that other players will link to.

“We offer the foundation, which opens up many options for channel players to build upon. One example would be the creation of reactive maintenance systems, which would enable technicians to be sent to repair charge points when – or before – they fail. You could also develop apps that would, for example, combine the charging map with route planning and specialist venues, so that drivers could plan their day, safe in the knowledge they could not only find a charging station when required, but also be able to entertain themselves while they wait for the vehicle to charge.”

Dereshin Pillay, head of automotive and manufacturing at T-Systems, agrees there will be opportunities in the application development space, suggesting that linking one’s personal calendar to the map of the charging stations would enable users to ensure they could get to all their daily meetings either without recharging, or at least plan their day so that their vehicle could charge at a station during meetings. “There’s certainly a lot of potential for those channel partners prepared to think outside the box. Another option might be on the analysis and informatics side – remember this will be a new industry – so learning more about how and when people use their electric vehicles will offer many benefits in the long run.

“Obviously, there are many boxes still to tick before these vehicles will achieve high adoption rates, so one thing we will need is for the larger channel partners to the lead the pack as early adopters,” he says. After all, he continues, once the big enterprises get more involved, they will create more volume, which will offer more opportunities for smaller channel players to get involved in building out the industry through app development and the like.

Nascent market

Mark Walker, associate VP for Sub-Saharan Africa at IDC, notes how the channel will develop is still very nascent at this stage. He indicates the biggest channel developments will be within the automotive sector itself, suggesting that the traditional brake repair businesses may develop a new approach, and will likely ally themselves with specific vehicle manufacturers.

“I do, however, think there will be a segment of software tuning experts and they will offer services to maximise the performance of electric vehicles by tweaking the software. The vehicle peripherals, such as chargers and batteries, will also be very specific to the vehicle make and, in all likelihood, there will be very little standardisation initially. So, while there will be some diversification as it develops, it will probably be dominated by the bigger players,” he says.

Gridcars’ Jordaan says: “We’re probably talking about a 20-year trajectory for this industry to reach fruition. Any organisation that wants to play a role  in this space will need to begin mapping its route along this journey now."

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