Electric cars in SA could become cheaper and more numerous on our roads now that the government has realised the age of battery-powered vehicles is upon us, and not some distant sci-fi scenario.
While the internal-combustion engine is not destined for imminent extinction, trade & industry minister Ebrahim Patel has committed to the advancement of “new-energy” vehicles with a green paper entitled “The SA Road to Production of Electric Vehicles” released on May 18 by the department of trade, industry & competition. The paper, which invites public comment by the end of May, aims to transition the local automotive industry from the internal combustion engine (ICE) era into electric vehicles (EVs).
The move is a lifeline for the local motor manufacturing industry, which employs 30,000 people and contributes 6.4% to GDP, after it warned of huge job losses and a collapse in exports if it didn’t switch to EV manufacture.
With the world moving to EVs and a number of countries set to ban the sale of ICE vehicles soon, the combustion-engined vehicles produced in SA would run out of export markets, with nearly two-thirds of production going overseas.
For the domestic automotive industry to remain relevant, it needs to be integrated into the global EV value chain as it is clear that the rise of EVs is inevitable, said the green paper.
What it means for local consumers could be more affordable priced EVs in the medium to long term.
Overseas sales of EVs have soared in recent years and the forecast is for new-energy vehicle sales (including EVs and plug-in hybrids) to exceed those of ICE sales by 2038 globally.
Locally the interest has been barely a trickle, with only about 1,000 of the 12.7-million cars on SA’s roads electrically powered. Consumers are put off primarily by their high prices, but also the long time it takes for EVs to charge, their relatively limited range, the perceived shortage of charging stations, and the instability of Eskom’s power supply.
The expensive prices are largely due to the high cost of batteries and punitive import duties, with EVs attracting up to a 25% duty in SA compared to as little as 18% for ICE cars depending on where they're imported from. The government’s green paper hints at a duty reduction that could lower EV prices by a small margin. More importantly, the department’s strategy to have EVs and their components built locally at large scale could be a more important factor in their affordability.
Tax and cashback incentives may also be offered to EV buyers as in many other countries, which could further reduce the price gap between EV and ICE cars.
Battery prices account for one of the biggest costs in EVs, but this has decreased 89% over the past decade, and improved technology and better economies of scale should see battery prices halve by 2030, according to energy research firm BloombergNEF.
If the price is right, there is an appetite in SA for battery-powered cars given that their running costs are much lower than a petrol or diesel vehicle (at an average R1.52/km for an ICE vehicle vs R0.23/km for an EV), while EV maintenance costs are also very low.
They also have impressive performance and torque.
An Electric Vehicle Buyers Survey conducted in 2020 by AutoTrader and Generation.e found that about two-thirds of respondents would want to own an EV if it cost under R500,000.
None of the five EV ranges on sale in SA come close to this: namely the Mini Cooper SE (a single model priced at R686,400), the BMW i3 (a starting price of R754,200), Volvo XC40 P8 Recharge (R1.2m), the Jaguar I-Pace (starting price R1.9m), and the Porsche Taycan (starting price R2.2m).
They’re soon to be joined by the Volkswagen ID.4, Audi e-tron and Mercedes-Benz EQS, with none expected to fall under the half-a-million-rand mark.
Other factors that have stifled consumer interest in EVs, such as range, have been steadily improving. Cars such as the Taycan and I-Pace are able to get about 400km per charge and can juice up to 80% of range in about 30 minutes at public fast-charging stations.
The number of charging points per EV in SA is one of the highest in the world, with just six cars per charging station. However, to meet future demand the charging infrastructure must expand to incentivise motorists to switch to EVs, the green paper acknowledged.
Of course, all this will have to go hand in hand with a stable electricity supply. With Eskom’s well-documented woes, the rise of EVs will need to be complemented by additional energy sources — ideally green ones like wind and solar to tie in with EVs’ planet-saving ideals.
The rise of new-energy vehicles
• Global sales of NEVs (electrics and plug-in hybrids) in 2020 rose 43% to 3.24-million units compared with the year before, despite the overall fall in new-vehicle sales in 2020 due to the Covid-19 global pandemic.
• EV sales in SA comprised only 92 units, or 0.02% of the total 380,206 vehicles sold in the domestic market in 2020, down from 154 units in 2019. Hybrid vehicle sales accounted for 232 units in 2020. Locally, EV and hybrid sales have accounted less than 1% of sales for the past 10 years, with 4,892 new units sold out of the total 5,694,860 sales since 2011.
• Mercedes-Benz SA is the only local company building an EV — a hybrid C-Class powered by a combination of ICE and electric motor. But it is for export only. Later in 2021, Toyota SA will become the first manufacturer to build a hybrid for local use with the launch of its Corolla Cross.
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