Part 1: The future of South Africa’s roads is electric
South Africa’s plans to transition to a clean green economy, means that the days of combustion engines on South Africa’s roads are numbered. Although it seems impossible, with the good old engine that has been carting people around for more than 100 years still thriving on the country’s roads, climate legislation will force motor manufacturers to change to electric vehicles.
South Africa is not immune from the change. In fact, the South Africa government has decided to embrace electric vehicles in its transition plan, including it as one of its three key priorities for climate action. The other pillars of the climate plan include reducing carbon emissions at Eskom by shutting down ageing power plants and fast-tracking plans for a green-hydrogen economy.
In a two-part series we look at how the switch to electric vehicles will change South Africa’s roads and, in the second instalment, how crucial it is for South Africa’s car manufacturers to adapt to the green revolution if they want to remain competitive in a global market that is increasingly shunning fossil fuels.
The South African government plans to invest heavily in the electric vehicle industry as part of its plans to decarbonise its economy, and its draft paper on a road map for increased production of fully electric vehicles will be presented to potential investors to attract climate funding.
The government hoped that the strategy would boost investment, because investors disengaged from fossil fuels, even in the transport sector.
At the end of 2019, statistics showed that there were only 1,100 electric vehicles on South Africa’s roads. But in 2020, in a poll by car magazine Autotrader, almost 70% of South Africans who took part indicated that they were keen to buy an electric vehicle.
Simon Woodward, automotive sector head at investment bank RMB, warned that South Africans still had to fork out much more for an electric vehicle than a similar combustion engine model.
Woodward says RMB had seen better collaboration between private entities and car manufacturers to expand charging stations in South Africa, and to make the changing stations compatible. Developing the domestic electric vehicle market was crucial in the electric vehicle climate plan, he said.
The switch had happened, he said, with sales information showing that electric vehicles sales had increased from a few hundred a year to more than 10 000 a year.
“A good starting point to boost sales would be for the government to consider tax incentives for the purchase of new, domestically produced electric vehicles. The current import tax regime for these vehicles is punitive and adds tens of thousands of rands to the cost of even the most basic electric vehicle,” Woodward said.
But the sales needed to shoot up to hundreds of thousands to make a difference.
If fleet car operators and the government would add electric vehicles to their respective fleets, it would boost consumers’ confidence to join the early adopters.
Retailer Woolworths tweeted this week that it was testing electric vehicles as part of its delivery fleet. But the current lack of charging stations in and between cities and towns in South Africa, remained a challenge
Woodward said car manufacturers were considering funding a company that builds and operates electric vehicle charging stations nationally to vastly increase the charging network.
“This does appear to be imminent.”
Consumers were also sceptical on whether South Africa’s constant loadshedding would allow them to charge their vehicles in their homes.
“While this causes inconvenience for consumers, we do know that most cars will be charged overnight and between bouts of power outages,” Woodward said.
“This is an understandable worry which needs to be overcome. A potential solution could involve the coupling of incentives by car manufacturers and the government so that new electric cars were sold with photovoltaic solar solutions – like solar panels. These would help homes become less reliant on the grid, ensuring a more reliable power supply,” he said.
Read part two here.