By Sinazo Mkoko
With the ongoing fuel hikes the country has seen over the past year, there have been calls for the South African automotive industry to consider introducing electric vehicles (EVs) to the South African market. The question remains: with all the power challenges South Africa is facing, what will it take to achieve this goal?
Responding to a parliamentary Q&A session in March 2022, Transport Minister Fikile Mabula told members of parliament that the Department of Trade, Industry and Competition (DTIC) had developed a “Green Paper on New Energy Efficient Vehicles” which aims to establish a clear policy foundation that will enable South Africa to coordinate a long-term strategy that will position the country at the forefront of advanced vehicle manufacturing as well as advanced vehicle-component manufacturing.
Mbalula was asked about the fact that globally the automotive future is increasingly looking electric due to growing regulatory moves, “including forthcoming bans on sales of internal combustion engine vehicles and ongoing improvements in battery and charging technology and how would the trend toward electric mobility play out in the Republic’s transport industry and the opportunities and challenges associated with the country’s electric transport future.”
Mbalula highlighted anxiety among consumers that became key in discussions around electric vehicles as one of the challenges they identified. “Although this has dramatically been alleviated with the recent provisioning and upgrade of over two hundred charging stations throughout the country, it still remains a key challenge which we are constantly engaging among one another as government departments to resolve,” he said.
He went on to say that the issue of the constrained power grid from Eskom that also becomes a challenge for the overall uptake with a key issue of how these vehicles will be recharged should a major power outage should occur, or even during the regular load shedding intervals.
“The Department is are [sic] also very cognisant however to the challenges that will occur for this shift in vehicle technology to occur, especially if it would be ‘mass uptake’…
“The first challenge is that the tax regime (import duties) for electric vehicles in South Africa has created a situation of barrier to trade. Compared with the around 18% import duty currently added to the price of a vehicle with an internal combustion engine landing in South Africa, an all-electric vehicle is taxed by up to 25%, Thus [sic] pushing the electric vehicle out of the typical affordability market also puts the electric car into being classified as luxury, irrespective of the type, or model of the car. The import duties are currently being imposed by the Department of Trade Industry and Competition.” – Fikile Mbalula.
He added that there are also efforts to build electric vehicles in South Africa, to keep the auto industry at the “cutting edge of new market developments and to maintain our export capacity for key markets such as the EU and UK, whom have both set new targets and deadlines to reduce the number of fossil fuel reliant vehicles on their roads.
He said the country needs charging infrastructure – and must expand beyond the existing two hundred charging points for electric vehicles in South Africa using the agreed SABS standards.
CAR INDUSTRY REPORT
Autotrader released its 2022 Mid-Year Industry Report, shedding light on the wider automotive landscape, globally and locally.
According to Autotrader, the reporting period for this study covers the first six months of 2022, with over 13 brands and over 21 models featured in the top 10, across various categories.
The report revealed that EVs were “listed 141 times, registering an average price of R1 870 721 as well as a mileage of 21 313 km and an average year model of 2020.
“The most available Models were the BMW i3, Porsche Taycan and the Audi e-tron. Based on the research from the Annual AutoTrader Electric Car Buyers Survey, vehicles which are within the sub-R600 000 price range continue to be the most popular. In this case, these include the BMW i3 and the Nissan LEAF.”
Autotrader CEO, George Mienie, states that one of the trends that the country needs to bear in mind is the move to EVs. “According to the International Energy Agency, global sales of electric cars (including fully electric and plug-in hybrids) doubled in 2021 to a new record of 6.6 million, with more now sold each week than in the whole of 2012. And we’re seeing the move to EVs here in South Africa too. This is confirmed by our data; EV searches (not by fuel-type but searches of the available models) have increased by 102% year-on-year while EV advert views have increased 134% year-on-year,” he says.
Mienie continues: “Coupled with this trend, we’re seeing a growth in fuel-type searches. It is especially interesting to see that hybrid searches are up by 129% while electric fuel type views (i.e. the number of times car adverts are viewed) have increased by 133% year-on-year. The message is clear: we are in the midst of great change. The question is this: is our industry refuelled and ready to deal with – and indeed, capitalise on it?” – George Mienie.
The Breakthrough Agenda Report
At COP26 last year, world leaders gave the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA) and the UN Climate Change High-Level Champions the tasking of developing an annual Breakthrough Agenda report to provide an independent evidence base and expert recommendations for where stronger international collaboration is needed.
The Breakthrough Agenda is a “commitment to work together this decade to accelerate innovation and deployment of clean technologies, making them accessible and affordable for all this decade. To kick start this Agenda, countries endorsed Breakthrough goals to make clean technologies and sustainable practices more affordable, accessible and attractive than their alternatives by 2030 in the power, road transport, steel, hydrogen and agriculture sectors.”
The first annual report of the 2022 Breakthrough Agenda Report, released in September, showed that in the road transport sector, “countries and manufacturers should align target dates for all new vehicles to be zero emission, to shift investment more quickly towards the new technologies and accelerate their cost reduction. Zero emission vehicles accounted for around 9% of global car sales in 2021; this should reach about 60% by 2030.”
The report states that South Africa has the most coal-intensive economy of the G20 – depending on it for 87% of its electricity. “The Just Energy Transition Partnership (JET-P) was developed in cooperation with South Africa and France, Germany, the European Union, the United Kingdom, and the United States, who agreed to provide an initial commitment of USD 8.5 billion through just transition interventions, power sector decarbonisation, and economic diversification into future energy sectors, including electric vehicles and green hydrogen.”
One of the key messages for the road transport sector states that: “The transition to zero-emission road transport is at a relatively early stage in terms of global market adoption, but progress is accelerating rapidly, with substantial take-up of electric cars, urban buses, and two-and three-wheelers in many countries.
They said the sector is more advanced in its low-carbon transition compared to other transport subsectors, such as shipping and aviation. “There are already nearly 18 million zero emission cars, light commercial vehicles, buses and trucks on the roads, plus more than 36 million electric two-and three-wheelers. In 2012, just 120 000 electric cars were sold worldwide but by 2021 more than that number were sold each week, totalling 8.7% of global sales; yet, there remains a long way to go (IEA, 2022a),” the report noted.
According to the report, The Breakthrough goal for road transport endorsed at COP26 is: “Zero emission vehicles are the new normal and are accessible, affordable, and sustainable in all regions by 2030.”
Rapid progress on deployment, cost reduction, availability, and sustainability are all that will be required to meet this goal.