Growing the Electric Vehicle Sector in South Africa
September 29, 2019
Imagine there’s no petrol. It’s easy if you try. No oil below us, above us only sky. How long before electric vehicles become a viable alternative to regular cars on South Africa’s roads?
“More than a billion people on the African continent need to be connected to markets, services and communities. In a context of limited roads and transports routes, millions of people spending hours waiting for transport, and the high cost of transporting goods means the potential of renewable energy, combined with battery technology, along with affordable and practical vehicles designed for purpose, could unleash positive disruptive change on a massive scale,” says Shantha Bloemen, a director at Mobility for Africa.
Registered in Zimbabwe the company is working with a strategic Chinese partner and social impact investors to build a market for robust, renewable energy charged electric tricycles. The vision is for these vehicles to be powered through community-based off-grid energy supply.
Price will be the major factor determining demand for electric cars in South Africa, suggests Khanyisile Khumalo a sustainable transport analyst at GreenCape, a non-profit organisation that drives the widespread adoption of economically viable green economy solutions from the Western Cape.
Total import taxes at 42% on EVs and hybrids
“High import duties are a constraint, especially in SA,” she says. Currently, electric vehicles [EVs] are subjected to 25% import duties while buses and trucks carry a 20% duty. In comparison, ICE [internal combustion engine] vehicles incur import duties of 18%. Electric vehicles are further subjected to 17% ad valorem (luxury tax duty) because of the battery price pushing the overall cost of the vehicle into a luxury threshold. Total taxes on electric vehicles and hybrids is now 42%, which is significant.”
Taking the move to electric vehicles as inevitable, Khumalo comments that adoption will be influenced by the rate of growth in the sector as a whole, “As we transition to an EV-led vehicle industry, we will need appropriate skills to facilitate market growth. There are currently not enough skills in the automotive market and ancillary services sectors to adapt to the growth of the EV manufacturing section. We need to up-skill practicing technicians to ensure the transition towards electric mobility is possible. This training is also important for first level emergency responders, dealership and aftermarket services as these sector also play an important role in a functioning transport sector.”
Without any government support, Khumalo predicts a medium- to long-term timeline before EVs become a realistic option for everyday South African motorists.
Bloemen suggests that current challenges, such as being able to generate renewable energy, off-grid energy storage and the lack of a pro-poor regulatory environment, is hobbling the sector. The taxes on lithium batteries and storage units are clear examples of this.
The urgent need for developing nations like South Africa to reduce its carbon emissions and combat global warming can be given a significant boost by catalysing the EV sector, to the benefit of rich and poor households. This would especially be evident should government encourage local electric buses to be integrated into the public transport networks, says Khumalo.
Drones as electric vehicles
The drone industry is advancing at full flight. Drones now range from simple toys to valuable assets enabling a range of new products and types of work. In the film industry drones are being used to land on water, and film under it, and solar-powered battery technology is allowing high-altitude drones to fly for weeks at a time without landing.
With technology and safety advances in battery technology, off-the-shelf drones are becoming easier to fly – even at distances of 4km away. In the next couple of years drone technology is expected to advance to enable control beyond a visual line of site, and then this range will then grow with flight time abilities. Along with technical advances, regulations are also hoped to improve as, for example, there is currently a two-year application process to receive a Remote Operating Certificate.
If you are interested or involved in motivating for more electric vehicle charging stations in private developments, consider qualifying as a GBCSA Accredited Professional.
More information:
- Electric Vehicles 2019 Market Intelligence Report by GreenCape
- State of drone report 2018 by Rocketmine
