First, let me be clear that I am not involved with the company at all, and everyone will have to do their own legwork.
Zero Carbon Charge has opened up a second round of funding to private investors.
Executive summary:
Minimum investment amount is 25k.
Company is valued around 1 billion ZAR.
Buy in is R11/share.
Deadline is 31 March.
Time estimated before a profit is shown, probably 3 to 5 years. IRR is estimated at 50% per year, and up to 60 times initial investment over ten years.
If you are interested, mail them at invest@charge.co.za.
Again, not involved in this at all. But I am considering investing. And I will appreciate a discussion as well.
One is money back in my pocket. The other is growth of the business itself. Thatās how I understand it anyway. Over enough time ā say for example the business is sold in ten years and my entire share is paid out ā it would be the same thing. Again, that is how I understand it.
If you are expecting 50% of the original amount per year in dividendsā¦ well that is probably not going to happen. It is not that kind of ROI.
When you are starting with one charging station, and building another 119, you would expect a very high growth rate. So this is actually not the strangest number in the bunch.
Still, they should be able to get finance from reputable sources at a much more reasonable rate and pocket the difference themselves. So this is very deep into the ātoo good to be trueā territory.
And they already have. Absa Investment bank is on board. I fully understand that doesnāt solve the question as to why you donāt go back to that source for more.
In any case, two people I respect very much has now told me this is not a good idea. So maybe it is not a good idea then.
They need fix at least one spelling mistake on the main page first.
Sadly that āattention to detailā is important to me when I decide to risk my cash
Thing is, probably what attracts me to such an opportunity so much, is that one wants to make a difference. You want to be the change you want to see.
Iāve been following these guys for a while. I really hope they succeed. And it doesnāt take a rocket scientist to know that if 49% of petrol and Diesel is bought on the highways and byways, and weāre talking about a market that represent billions, there is a LOT of money to be made here.
The risk is always in the other things: Timing, mostly. Or being surprised by a competitor (technically Rubicon and GridCars are years ahead already, and apparently also very strained deeply invested while waiting for a profit).
Finally, while I love the off-grid nature of these stations, because of my background with the European scene (arbitrage, etc), I would actually like to see more of an interaction with the grid.
So I was never planning to invest millions. I always knew an investment would be limited to what I am willing to gamble on.
Anyway, I have to make this decision by the 21st. If new info comes up, Iāll post it here.
Right now, highway fast chargers in SA see only a handful of charges per year. Frequently, if I chat to the petrol attendants, I will have been the first EV they have seen charging.
Potential profit per charge is probably around R300.
On top of that, there are still no ācheapā EVs on the horizon for SA, so no substantial uptick this year. Probably not next year either.
So donāt expect to see any actual profit for at least 5 years.
BUT if there is no infrastructure investment, then the uptick wonāt happen at all. One of those cases where you need to spend a shed-load of money now for a potential long term return.
The number I have is 7 charges per day, so 2000 to 3000 customers a year. Thatās what they need to break even. Part of the story is also the attached convenience store.
It takes multiple steps. The first part is buy in from property owners, zoning, permitting, building plans, environmental impact, all that stuff. Then you need to get equipment, more specifically, a recipe that you can easily put down (solar farm, big battery, charger outlets, backup Diesel generator). Then you need the software integration, so people can easily pay. These are reportedly done, now that Wolmaranstad is operational. Funding for the rest is actually the last part, and it is like you say: Itās a massive upfront investment, and then waiting 10 to 20 years to get the money back.
The BYD Seagull is confirmed for SA. And it will apparently retail for under 400k. Weāll see.
At this point this appears to be more of a gamble because of the governments track record of not having direction. Iād personally do the R 25k but not more and see how it goes. It is still too good to be true numbers.
My thinking is that if that growth is realistic, it would attract competition over that timeframe and that threatens the optimistic scenario presented here. That would then dampen the returns presented.
Mmmh. I know they are targetting a price that is BELOW that of GridCars, which sits at R7.35 for DC fast charging, and R5.88/kWh for slower AC charging. I didnāt know the Wolmaranstad station is that steep.
In Europe, it is quite common to pay 80c/kWh. FastNed is typically 70c/kWh, which is around 11c/km in an energy efficient vehicle. Compared to that, petrol is 2.12 right now, which in a good fuel efficient vehicle is 12 to 13c/km. This has long been one of my criticisms of highway charging: that they often price it so close to petrol that you might as well not botherā¦
