Demand for electric vehicles (EVs) in South Africa remains low, mostly owing to the high cost of the limited options available to South African motorists.
The Electric Vehicle Industry Association indicates that, of the about 12.5-million registered vehicles on South Africa’s roads, 1 000, or less than 1%, are EVs.
“South Africa is lagging year-on-year compared with global averages. Therefore, this sends an unclear message to foreign technology-orientated investors and original-equipment manufacturers (OEMs) which, in line with global market trends, are focused on EVs.”
This is according to United Nations Industrial Development Organisation’s (UNIDO’s) South African regional office energy and climate coordinator, Conrad Kassier, technical project associate, Ashanti Mogosetsi, and project assistant for energy efficiency, Nikola Niebuhr.
In May, the trio accompanied representatives from the Department of Transport, the South African National Energy Development Institute (Sanedi), the Government Technical Advisory Centre, National Treasury, State-owned power utility Eskom, the City of Joburg and the City of Cape Town to the thirty-second Electric Vehicle Symposium, in Lyon, France.
The purpose of participating in the event was to ensure that South African stakeholders who have strategies, research work and demonstration projects relating to the advancement of the local EV industry are exposed to further hi-tech solutions and policy discussions on how to manage e-mobility, nonmotorised transport and sustainable transport equity under South African socioeconomic conditions.
“What became evident during our visit was that EV uptake in most other countries is fruitful because energy and transport policy and charging standardisation are clear from a government support perspective, after an initial learning process,” Kassier tells Engineering News.
Therefore, the way in which EVs are promoted in South Africa requires revision, he emphasises.
To increase EV adoption in South Africa, the trio stress the need to effectively implement national policy and the Intended National Determined Contribution to reduce greenhouse-gas emissions by shifting towards e-mobility, active leadership by municipalities, a reduction in import duties on EVs to allow for OEMs with lower-cost EVs to enter the market and the empowerment of the automotive sector to attract modern and future- orientated investment in EVs in South Africa.
“Many smaller economies in the automotive space are opening up as techno-friendly countries to invite consumers and investors to practice lower carbon lifestyles. These countries include Egypt, Hungary, Poland and Ukraine, and are attracting high-grade skills and knowledge transfer to increase the global competitiveness of their sectors,” notes Mogosetsi.
EV uptake in South Africa is currently limited mainly by the lack of profit OEMs generate from EV sales, limited policy implementation and high import duties that contribute to the high barrier to entry in the local EV market, as well as by the lack of integrated public awareness programmes to influence the buying decisions of various markets across the EV value chain.
“Locally, import taxes on EVs remain higher than conventional internal combustion engine (ICE) vehicles, adding significantly to their cost, with the tax rate set at 45%,” Kassier says.
To counter this barrier, Mogosetsi highlights that the industry and its stakeholders continue to lobby government to reduce this duty and align with global best practices through which EV sales are encouraged, incentivised and, in some countries, partially subsidised.
“Even though South Africa depends on the current automotive industry and fuel levy structure for revenue, it is important to realise that a transition to electrified mobility has inherent co-benefits such as reductions in health expenditure from improved air quality due to zero tail-pipe emissions and the fact that a new industry will produce new revenue from local manufacturing and operational opportunities. “While subsidising the industry may be a tall ask from government, implementing non-financial incentives may give the industry the boost it needs,” she states.
In other emerging economies in Asia, as well as the northern hemisphere, price parity between electric and ICE vehicles across vehicle classes is expected by about 2025, says Mogosetsi, who is the technical project associate for the UNIDO and Sanedi Low Carbon Transport Project in South Africa.
Niebuhr stresses that government is required to further enhance an enabling environment for the benefit of industries and investors so that EVs can be an effective technology that delivers a cheaper, more inclusive mobility experience for all motorists and commuters alike while reducing the effects of climate change and urban pollution.
However, she says, policy implementation issues continue to slow down the effective incorporation of EVs in the country’s energy and transport mix, despite global trends pointing to EVs being the biggest driver of the modern transport industry equation.
Government, which accommodates EVs in its Green Transport Strategy, has reached out to multiple stakeholder levels in both the public and private industry to support and co-implement existing clean-energy transport plans and strategies to advance the local EV industry. The EV industry is of a cross-cutting nature and cannot rely on a single stakeholder for its effective uptake. UNIDO’s stakeholder engagements are tailored to build the required institutional capacity for policymakers and industry players to enable the integrated effort required to grow the market share of EVs in South Africa.