As EVs present a cleaner and more sustainable alternative to traditional internal combustion engine vehicles, innovative startups are capitalizing on the growing popularity, technological advancements, cost-effectiveness, and environmental benefits of EVs. One such startup, Everlectric, based in Pretoria, is at the forefront of this movement by offering full maintenance leases of commercial Battery Electric Vehicle (BEV) panel vans specifically designed for South African businesses, particularly those in the logistics sector.
According to the International Energy Agency (IEA), the global stock of electric vehicles (EVs) surpassed 16 million units in 2022, reflecting a remarkable 60% increase from the previous year. Projections indicate further growth, with an anticipated 35% increase in 2023 and an additional 25% in 2024. This upward trend in EV adoption is also gaining traction in South Africa, where the country is increasingly shifting towards more sustainable transportation solutions.
EVs are part of a broader category known as new energy vehicles (NEVs), which also encompasses hybrid and plug-in hybrid vehicles. The National Association of Automobile Manufacturers of South Africa (Naamsa) reports that 2023 marked a record year for NEV sales in the country, with significant growth continuing into 2024. Notably, NEV sales surged by 88% in the third quarter of 2024 compared to the same period in 2023.
Recognizing the significant untapped market potential presented by this pioneering enterprise, Everlectric has successfully secured venture debt funding from the Vumela Fund. Co-founder Ndia Magadagela expressed enthusiasm about the partnership, stating, “We are delighted to be partnering with Vumela on this venture debt transaction. This collaboration underscores Vumela’s commitment to providing innovative growth finance mechanisms that enable the rapid scaling of South African startups. The venture debt is the right catalyst, at the right time, with the right debt provider, facilitating Everlectric’s growth.”
Established in 2010 through a collaboration between FNB Business Banking and business development specialist Edge Growth, the Vumela Fund aims to provide growth capital to black-owned small and medium enterprises (SMEs). The fund’s objective is to invest in high-growth SMEs and support their development and expansion.
Developing alternative funding solutions is crucial for addressing the challenges of access to capital faced by SMEs. The venture debt offering is specifically designed to meet the funding needs of venture capital-backed scale-ups that require non-dilutive capital to support growth between funding rounds. Philippa Lloys Ellis, Investment Principal at Edge Growth, noted that Everlectric has created an innovative solution to assist South African businesses in transitioning to EV fleets, effectively addressing many concerns surrounding EV adoption. This presents a potentially vast and untapped market in South Africa.
“We have been impressed by Everlectric’s innovative, organized, and ambitious management team. We look forward to partnering with them and supporting their growth, and we expect that the venture debt funding will be catalytic in helping the business unlock further capital for expansion,” she added.
Founded by Magadagela, along with Paul Plummer and Wesley van der Walt, Everlectric offers a risk-free and cost-effective pathway for businesses to adopt commercial EVs in South Africa. Their service includes leasing internationally manufactured BEV panel vans, access to a network of charging infrastructure, and an enabling smart device platform.
Mike Sage, FNB’s Investment Capital Head and a Vumela Trustee, expressed excitement about the funding, stating, “We are incredibly excited to provide funding to assist Everlectric’s growth. Everlectric is pioneering the transition of business fleets onto EV platforms, which we believe will create sustainable long-term outcomes.”
By investing in electricity instead of fuel, Everlectric enables businesses to decouple their operational costs from the unpredictable fluctuations of fuel prices. Their charging solutions address fleet range anxiety and charging needs, facilitating a smoother transition to EVs. A leading South African multinational retail company is already utilizing EVs provided by Everlectric for customer deliveries as part of its commitment to reducing its carbon footprint.
With a proactive approach that emphasizes “early action leads to opportunity,” Everlectric is effectively dispelling the misconception that EVs are not commercially viable in South Africa. Their comprehensive service offering minimizes barriers to EV adoption, paving the way for a seamless transition to electric vehicles.
