Efic’s Export Contract Loan helped innovative first-time exporter SEA Electric (formerly SEA Automotive) take its electric vehicle technology to New Zealand as their first export market.
Established in 2014, SEA Electric (SEA) is an automotive technology company that assembles and sells complete electric vans and trucks, as well as providing electric vehicle (EV) conversions to original equipment manufacturer (OEM) platforms for transport and logistics companies.
“We determined very early on that electric vehicle technology was to become commercially viable sooner than early forecasts,” said Tony Fairweather, SEA’s Executive Chairman, “given the exponential reduction of electric vehicle component and battery costs.”
The challenge for electric vehicles up to now has been around price, with the excessive cost of batteries, technology and components making them uneconomical when compared to diesel alternatives.
“In the last 8 years, the cost of components has dropped by 500%, with the rate of reduction increasing every year,” said Tony. “So if a business is intending to hold the asset for more than a 4-5-year period, it’s now actually cheaper to buy an electric truck over a diesel truck.
“These large cost reductions are also expected to continue, with component costs predicted to fall by another 300 per cent by 2020.”
SEA’s vision is to have every commercial vehicle that travels less than 200km per day (some 350 million vehicles globally) to be zero emission, 100% electric.
Growth through exporting
SEA’s technology allows standard diesel platforms to be converted to 100% electric, whether that involves converting them after they’ve been manufactured, or working with the manufacturer as part of the build process.
SEA also has exclusive rights to its own range of donor commercial vehicle platforms for conversion to electric vans and trucks.
“We’ve found that, performance-wise, drivers love electric vehicles,” said Tony, “as they are quiet and responsive, with no smell, and they perform better than a diesel vehicle.”
“And with component costs coming down globally, exporting our technology was really the next step in growing our business.”
SEA began exporting after it received orders from a number of large waste management and transport companies in New Zealand, all of which were looking to upgrade their commercial vehicle fleets to class leading technology.
“The export opportunities in New Zealand really came to us, through a combination of our own marketing and the significant incentives that the New Zealand Government is offering companies to trial and use electric vehicles.
“While the good news was that our products satisfied all the design standards and vehicle requirements that are in place in New Zealand, the main challenge that we had was around financing the component procurement and assembly,” said Tony.
Like many advanced manufacturers, SEA needed to pay its component suppliers upfront, as well as paying for production. This would have put significant pressure on its working capital, especially as a relatively new business.
SEA used Efic’s Export Contract Loan to help fund the upfront costs associated with the manufacture of key components, and the production and assembly process to fulfil its initial export order of three trucks into New Zealand.
“Many of our large components are quite expensive and are imported from large suppliers in Europe and Canada, which means inventory costs need to be managed carefully, prior to us delivering our vehicles and getting paid.
“This is where Efic’s funding via its Export Contract Loan has filled that niche very, very well,” Tony explained.
And with SEA now exploring new export opportunities in South East Asia, the future is looking very bright for this innovative Australian technology company.