Who takes over Tritium, the titan house of EV charger manufacturing in Australia?
APRIL 26, 2024
https://www.watoday.com.au/business/companies/who-takes-over-tritium-the-titan-house-of-ev-charger-manufacturing-in-australia-20240422-p5flq4.html
Less than a year after Labor was catapulted into power, Prime Minister Anthony Albanese headed back to Tritium’s headquarters in Brisbane to spruik yet again his government’s key election commitment – a $15 billion National Reconstruction Fund to support the nation’s ailing manufacturing sector.
Walking through the factory during his third visit to the company, vowing to challenge the global dominance of Tesla in electric vehicle charging, Albanese posed for photos with Tritium chief executive Jane Hunter and declared this was the type of Australian business the federal government could get behind.
“This is what one of the world’s fastest electric vehicle chargers looks like,” Albanese tweeted. “It’s the kind of technology we need to make Australia a renewable energy superpower. Businesses like Tritium here in Brisbane need certainty to invest in new tech, new ideas and new jobs.”
By the end of that year, the company was struggling to raise capital from governments or investors, being threatened with delisting from the Nasdaq, and eventually forced to shut down its Brisbane manufacturing plant, laying off 200 staff, to consolidate its operations in the United States as a last-ditch effort to save itself.
After a rapid rise, and at the centre of US President Joe Biden’s electric car revolution, the company’s fall had been equally rapid, culminating in its collapse last week.
“They designed a pretty cool piece of equipment, and they filled what was clearly a significant market gap, and it was growing rapidly,” says Tony Wood, the director of the energy program at the Grattan Institute.
“You look at their growth and their share price, and it was quite dramatic. Maybe they got carried away because when you have a market like that, you need to keep up with it, you need to raise capital because if you don’t, others will step in and eat your lunch.
“It’s the nature of a capitalist market system. It can be very cruel.”
Who fills the significant gap now?
Tritium was viewed as a national success story by state and federal politicians. The company had claimed it was the second-largest producer of charging infrastructure outside China, and owned and operated three-quarters of EV chargers across Australia.
When it moved to the United States in 2021, its future seemed so promising. It listed on the Nasdaq with a $2 billion valuation, built a factory in Lebanon, Tennessee, to produce 30,000 units a year, and employed thousands of local people.
It was building critical infrastructure in a fast-growing industry, and expanding its market, but as high-profile shareholder Brian Flannery lamented before pulling out two months ago, its bloated corporate management structure was stunting profit.
Tritium reported a revenue of $US185 million ($284 million) in the 2022-23 financial year, more than double what it recorded the previous year, but it had failed to make a profit over the past three years.
The collapse of Tritium as a business model will be raked over, but the real question for the rest of us transitioning to a low carbon economy is: how do we grow this critical industry in a nation where EV uptake had for far too long been too low, and what are the lessons from the once titan house of fast-charger manufacturing?
“They had a problem when the proportion of their chargers not functioning was quite high. You’d turn up at a charging facility, and of the four units, two were usually not working. They got a bit of a reputation for not being reliable, but they still had that market share, so I don’t know who’s going to step into that.”
There are now more than 180,000 EVs on Australian roads, a figure that has doubled since 2022, but represents less than 1 per cent of the total passenger vehicle fleet.
A Deloitte report, EV charging infrastructure – the next frontier, published in January, notes the uptake of EVs is projected to increase from 8.4 per cent of all new passenger vehicle sales in 2023 to 43 per cent by 2033.
To service that demand, Australia will need an eightfold increase on current public charging capacity, which means installing, on average, eight new public chargers every day for the next nine years.
It is one of the reasons why NSW and Victoria last year scrapped $3000 subsidies for drivers who buy new EVs and redirected some of the savings to roll out more charging stations in public spaces.
University of Melbourne chair in management Daniel Samson is confident EV charging infrastructure will continue to grow in Australia, but he hopes this industry will be far better supported than car manufacturing, which disappeared from the nation’s shores seven years ago.
“For far too long, Australia has had almost no industrial policy to speak of in which we positively helped catalyse sufficient industries to start up … so personally, I really welcome the idea of us having a business plan and a Future Made in Australia approach,” Samson says.
“And the other thing the government can do about EV charging is try to establish some standards so that rather than have a whole bunch of EV charging systems and approaches, if we can have some standards that manufacturers realise their equipment needs to fit, then that will reduce some of the risk.”
It’s still early days, but receivers McGrathNicol are in the process of finding a buyer for Tritium.
Partner Shaun Fraser said a sale process for Tritium’s business and assets had already been under way, and McGrathNicol would engage as a “matter of urgency” with those potential buyers.
“Our immediate focus is to stabilise operations and work closely with Tritium’s employees, customers and suppliers as we attempt to secure the best possible outcome for all parties,” Fraser said in a statement after Tritium’s collapse was announced last week.
Bjorn Sturmberg is a senior research fellow at the Australian National University and his work focuses on electric vehicles and general grid integration of green techs. The collapse of Tritium is a significant loss, he says, but it should not detract from the quality of Australian innovation.
It is more important than ever to continue turbocharging this industry.
“They had three-quarters of the market share in fast chargers so in that case it is calling into question the availability of parts and serving those – it’s a serious hit,” Sturmberg says.
“But I would kind of balance that off with [the fact that] the vast majority of the cost of fast-charging stations goes into the engineering, work of finding a site, developing a site, civil works, upgrades you need to make. So even for sites that may have a Tritium charger end up being uninstalled, it’s not the end of the world, and it’s still an imperative we have lots of charging stations deployed.”
This week, Stockland announced it was joining forces with Ampol to roll out one of the biggest Australian shopping centre networks fast EV charging stations. The ASX-listed fuel supplier is aiming to become one of Australia’s leading EV charging networks.
Tritium’s collapse won’t sound the death knell for clean technology manufacturing in Australia, and while most experts agree it has only highlighted how imperative it is for the nation to power an industry that is critical to a net zero future, others are wondering whether we can ever keep up with the EV titan, China.
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