BlackRock in $100m-plus equity, loan deal with Jolt Charge to boost EV uptake

Global investment giant BlackRock has picked Sydney start-up Jolt to take a $100m-plus punt on Australia’s electric vehicles market.

One of the Jolt charging stations in Adelaide. Picture: Sabrina Maschke

The world’s biggest fund manager BlackRock expects to “scale up” its investment in Australia’s electric vehicles market to several hundred million dollars after an initial $100m-plus equity and loan deal with Sydney start-up Jolt Charge.

Following nearly 12 months of discussions, BlackRock Real Assets, the real asset arm of BlackRock, has acquired a “substantial minority” stake in former advertising executive Doug McNamee’s Jolt, which wants to install EV charging stations around the country.

The deal includes a $100m loan to Jolt to install the first 1000 of the 5000 stations it wants to set up in the next three to four years.

A Tesla Model X car on display. Picture: Kenzo Tribouillard/AFP.

The investment is the first by BlackRock Real Assets in the EV charging sector in Asia Pacific and is designed to support Jolt's expansion plans to build out essential infrastructure to enable the transition to EVs in a market that lags other developed countries.

“What cut it for Jolt is their business model and their team,” said Charlie Reid, BlackRock’s managing director of BlackRock Renewable Power.

“They have a unique approach of combining outdoor advertising with EV charging and they also have a high funding requirement in order to install their units.

“We see it as a partnership that delivers attractive yield for our investors, but also the opportunity to scale (investment) up to several hundred million dollars.

“The circa $100m of capital … will fund around a 1000 chargers and given the scale of their pipeline where they want to install 5000 chargers, they would have a funding requirement of $500m over time and given the scale of capital we have at our disposal on behalf of our clients – that kind of scale is attractive to us.”

Mr Reid said BlackRock was a “firm believer” in the transition to EVs.

Doug McNamee, founder and CEO of Jolt Charge

“Australia is a laggard, but it will follow the trajectory of other markets.

“We felt that this was a good opportunity to get in early.

“We want to scale the Jolt opportunity and Jolt will be our platform for EVs,” he said.

BlackRock Real Assets believes the electrification of transport as playing a pivotal role in advancing Australia’s energy transition.

Mr McNamee, who started the business to realise his dream of owning an EV without the cost burden of charging infrastructure, said he and the Jolt team were “exceptionally excited”.

“Having BlackRock, the largest investor in the world, be able to come and join us is a huge validation of both the EV charging industry in Australia, but also Jolt’s management team and how we go about scaling EV charging infrastructure.”

Jolt founder Doug McNamee has the Tesla Model Y EV on his wishlist, unveiled by Tesla founder Elon Musk in 2019. Picture: Frederic J Brown/AFP

He said the business had an “infrastructure mindset” and had developed an asset-heavy business with the right partnerships and contractual arrangements.

By the end of September, Jolt will have 21 charging stations in Adelaide, funded partly by $2m from the Australian Renewable Energy Agency.

Its first charging station in Sydney, in partnership with Ausgrid, will open to customers next month.

“I think those sort frameworks and networks brought us into BlackRock’s sphere,” Mr McNamee said.

“I think the nature of this industry and this type of investment is that you need to take a longer term view.

“I think looking through the pandemic and saying this is going to be a need and an opportunity … helped us get there (with BlackRock).”

Established in 2018, Jolt declined to disclose its valuation, but said it has other high net worth families and individuals supporting the business.

Mr McNamee said Australia and Jolt were “just at the start of the EV journey” with consumers and the private sector doing the heavy lifting on driving its growth.

“We take the approach that we are building charging networks that solves a consumer need, making it easier for people to transition to EVs.

“Institutional capital will play a critical role in developing the infrastructure that will galvanise and accelerate EV uptake in Australia.

“Australia has a critical role to play in advancing towards a net zero emissions future.

“We’re excited to be leading the way forward by building the vital infrastructure needed to power our roads, address range anxiety and help get more Australians behind the wheel of an EV.”

Global annual passenger EV sales are expected to increase sharply from 3.1 million in 2020 to 14 million by 2025.

So far in 2021, 8688 EVs have been sold in Australia, representing 1.57 per cent of the total light vehicle market, according to the Electric Vehicle Council’s annual report, released on Monday.

That number is already higher than the 6900 electric vehicles sold in 2020.

The report highlighted government incentives, regulatory changes and investment in charging infrastructure as primary drivers.

“The delay of a national electric vehicle policy has caused investment and uptake in Australia to lag comparable markets,” it said.

The report criticised the “lack of leadership at a federal level” on a national EV strategy and warned it would continue to have a negative effect on future uptake.

And while state government investment and incentives were welcome, Victoria’s EV road tax and SA’s now-postponed move to also make EV users pay for road use was “counterbalanced”.