Founder: Turnaround Talk
A wise businessman told me that you will eventually be disrupted if you do not disrupt your company. While this is a novel way of approaching risk management, there is a method to this madness. If you are driving the disruption, you can see it coming and make appropriate plans to address it. In essence, you control the narrative.
Many companies will now pay a significant amount of money to travel back in time to make early interventions that would address loadshedding. In addition, the energy crisis has caused many companies to adjust to a new operating environment while not having electricity for four to six hours during the day.
Through managed disruption, many companies have designed novel products and services that have been ‘first to market’. This sets you up as an industry innovator and the benchmark against which all other companies measure themselves. Toyota plans to do this in South Africa through heavy investment in electric vehicles.
Significant disruption
The News24 article points out that Toyota believes that introducing full-battery electric vehicles on a large scale, as parts of Europe have done, will not be the best option for South Africa – given load shedding, pricing and the viability of the after-sales service market.
Speaking at a media roundtable on Tuesday, Leon Theron, senior vice president of sales and marketing at Toyota SA Motors (TSAM), said that opting for full-battery electric vehicles in South Africa would significantly disrupt the country’s after-sales service market.
The article adds that full-battery vehicles need less maintenance than traditional cars because the battery, motor and electronics need little regular maintenance. There are also fewer fluids, like engine oil, that require regular maintenance, and fewer moving parts compared to a fuel engine.
South Africa’s largest vehicle manufacturer will produce a range of new energy vehicles that use both regular hybrid and plug-in hybrid systems. Regular hybrid cars operate electrically at lower speeds and then switch to fuel as the driver goes faster. Plug-in hybrids rely mainly on the battery, only switching to petrol when it runs flat.
Image by: Johnny_px from Pixabay
TSAM will also produce vehicles that ran on hydrogen internal combustion engines and carbon-neutral or e-fuels. Full-battery electric vehicles that only rely on electricity will also be rolled out.
Vehicle targets
The article adds that, by 2030, TSAM believes 40% of its passenger vehicles sold in SA will run on these new energy systems. If bakkies and commercial vehicles were also included, this will come to a fifth of its vehicles.
Toyota’s global “multi-path” approach had been criticised globally, but Theron believed this was the correct one to follow.
“If we had to go full-battery electric, our dealer network would lose close to 70% of their total revenue [through the aftersales service market]. Think about the jobs created in automotive business. I think this is irresponsible in a way.
“It is also important to sustain the business into the future and the ICE [internal combustion engine] can play a role in that. And when you talk about hydrogen ICE vehicles and carbon-neutral fuel ICE vehicles, it makes a lot of sense and we can then sustain this business going forward.”
Wanted: Fast charge
The article points out that another concern is electricity shortages in South Africa and elsewhere on the continent.
Theron said from Europe that if they are looking to roll out electric vehicle charging stations they should only opt for the fast-charging option that would charge a vehicle in the matter of 30 to 40 minutes, rather than slower ones that take up to 10 hours to charge a car.
The article adds that installing this option in South Africa was problematic, with Crompton saying that the entire infrastructure also had to be changed to cater for faster chargers.
Image By: Justin Sullivan/Getty Images
“The power coming into the dealership facility (currently) is not actually sufficient to run a fast charger, so the actual grid has to be adjusted to accommodate fast chargers,” said Crompton.
The article points out that price is also an issue, as full-battery electric vehicles are more expensive.
“Affordability is going to be a major issue. We still have a lot of young entrants all over Africa who want to own a car. They will not be able to afford a full-battery electric vehicle, so we have to have other options on the table,” said Theron.
The article adds that, as for environmental concerns, Glenn Crompton, vice president of sales and marketing, added that while the idea of a zero-emission full-battery electric vehicle was “great”, producing them on a wide scale also harmed the environment.
He said some estimates were that about 30 new mines would have to built globally to “extract minerals needed for these batteries”, which ironically adds to the destruction of the environment that they are trying to preserve.
If Toyota can pull this off, Africa will be its playing field.
