It appears unlikely that South African consumers will secure special incentives or tax breaks to buy electric vehicles (EVs), as has been the case in many developed countries in the world. While government says it is seeking to support this new technology, it cautions that it will have to find other mechanisms to do so than what has become the norm in countries with deeper pockets.
In California, in the US, for example, EVs receive an incentive of $7 000 to $8 000. In the UK there is a 5 000 pound purchase grant for buying an electric vehicle.
These all serve to bring the price of these zero-emission (at the exhaust), zero-fuel vehicles down to a figure that more resembles that of a car with an internal combustion engine.
“We are very supportive of EV production and the introduction of these vehicles in South Africa, but we have to use the instruments we already have to make this happen,” warns Department of Trade and Industry (DTI) deputy director-general of industrial development Nimrod Zalk.
This means the DTI will rather make use of existing support structures for the automotive industry, such as the Automotive Production Development Programme (APDP), which aims to stimulate local production volumes.
“It would be really difficult to introduce a new dedicated consumption subsidy for electric vehicles,” notes Zalk.
“We will have to find our own particular way of doing it. We need to find a way that is realistic for South Africa. We cannot do it in same way as the UK or Denmark. They have much bigger pockets.
“Yes, government has a strong role to play, but it cannot just be government doing this. The expectation that it all comes down to government is not realistic.”
Zalk says the DTI is in the process of drawing up an “overarching position paper” on EVs in South Africa, which it will take to Cabinet during the July–September quarter.
“As far as we are concerned our processes are on track, and work is underway on the position paper.”
Zalk says the DTI believes that EVs should be introduced in South Africa, but with a focus on local production, if possible.
“We have a strong focus on trying to ensure we do it in a way that integrates us into the production of these vehicles, rather than make us passive consumers.”
Probably the best-known electric vehicle today is the Nissan Leaf, crowned as the 2011 World Car of the Year.
“In 2011, we are going to sell 50 000 units,” says Nissan Motor Africa, Middle East and India corporate VP Gilles Normand.
Nissan is then also one of the early movers in the local market – both in possibly launching a vehicle, and in seeking government support for its product.
“We are ready to work with the South African government on a framework for electric vehicles – to get an incentive to boost EV technology in South Africa,” says Normand.
He says any incentive does not “have to be there forever – only at the beginning, while we do not yet have the scale”.
The other requirements for the introduction of EVs into a country are consumer education and putting in place charging infrastructure, he adds.