South Africa is behind the curve on the adoption of electric vehicles (EVs), and this is not a sustainable situation, warns Nissan South Africa MD Mike Whitfield.
“Industry and government need to cooperate a lot more. We are behind the curve. There are no two ways about it. The interaction between industry and government has not yet reached the stage where we have a policy framework.”
Whitfield says only Nissan and BMW have, in the past, actively engaged government to provide a stimulus package for the local introduction of EVs, as well as the charging infrastructure required for these vehicles.
However, everyone is now “getting on board”, notes Whitfield.
“In recent months we have seen that all brands are now working together with the National Association of Automobile Manufacturers of South Africa to actively engage government on this.”
The successful introduction of EVs in a number of global markets have been supported by a range of government incentives, such as tax breaks and toll payment holidays. Zero-emission EVs are currently still more expensive than standard internal combustion engine vehicles.
South Africa offers no EV incentives.
The global rollout of EVs is happening whether South Africa “likes it or not”, says Whitfield. “If we don’t wake up, if we don’t move forwards, we are going to be left behind.”
This is also true for South Africa’s new vehicle manufacturing base.
“One way in which to make sure we have an industry that is viable, is to start adopting new technologies. Who are we going to sell cars to in 15 years, globally, if we are not accessing these technologies?” adds Whitfield.
The same is true for South Africa’s failure to produce cleaner, more environment friendly fuel.
Cleaner fuel production would allow vehicle manufacturers to introduce the latest in engine technology to the country, which could bring consumers significant relief at the pump.
South Africa was to see the introduction of clean fuels in 2017, but government has failed to execute its planned clean fuels policy.
“It is dangerous to assume you are going to stay behind on technology. There is no such choice,” says Nissan Motor Corporation marketing and brand strategy global head Roel de Vries.
He says a country may be “one, two, or three years behind”, but that it would be impossible to have “two worlds running” on a global level – one using the latest in technology, and the other one using older generation technology.
“We are not going to develop a new bad fuel consumption six-cylinder engine – no one is going to develop that. We are not going to develop any cars in future that do not have technology.”
Vehicle manufacturers will either not bring a vehicle to a market lagging behind others, or it will be available at a premium.
“People think old technology is cheaper, because the costs are amortised and so forth, but that is not necessarily the case,” explains De Vries.
“The car business is a volume business. If you think 20 000 units of a dedicated engine for a specific market to meet regulations is affordable, it’s not.
“The supplier of that engine is going to charge massive premiums to keep the line running for 20 000 engines.”
Whitfield echoes this sentiment.
“The reality is that no one is going to make the effort and spend money to build a car that operates in what is 0.6% of the global market.”
New-vehicle sales in South Africa in 2017, at about 555 700 units, made up 0.6% of the global market of more than 98-million vehicles.
Whitfield warns that manufacturers already cannot bring some of the newest vehicle models to South Africa because of the poor fuel quality in the country.
“We are going to have to adapt. We cannot delay the inevitable.”
Bloomberg New Energy Finance’s latest forecast shows EV sales increasing from a record 1.1-million worldwide in 2017, to 11-million in 2025 and then surging to 30-million in 2030 as these vehicles become cheaper to make than internal combustion engine cars.
The number of EV models available is set to jump from 155 at the end of 2017 to 289 by 2022.