Why electric cars are a better option in South Africa
Electric cars are on the road to mass popularity worldwide. In January 2021, experts reported that electric vehicles were close to the “tipping point” of rapid mass adoption worldwide. Bloomberg defines a national tipping point as “five per cent of new car sales powered only by batteries”. Already, 19 countries have reached this milestone for electric mobility. This five per cent threshold is where the usual obstacles to electric motor vehicle sales, such as a lack of charging infrastructure, start to give way.
The USA is the most recent country to reach the electric car tipping point, reportedly hitting the five per cent threshold in October 2022. The next countries to reach it will likely be Canada, Australia and Spain.
South Africa seems much further off the electric car tipping point than other countries. In 2021, South Africans bought twice as many electric vehicles as they did the year before, and in the first half of 2022, sales figures were almost the same as the whole of 2021. But, this year-on-year doubling of electric car sales started from a very low baseline. Specifically, just 92 electric cars were sold in 2020 and 218 in 2021. This represents just 0.05 per cent of total vehicle sales in South Africa. Yet, electric vehicles make up nearly 10 per cent of car sales globally. It would be greatly beneficial for South Africa to close this gap.
The electric car: Less costly than you think
We may think electric cars are expensive because of the higher upfront purchase price. But, over their entire lifespan, electric vehicles work out cheaper for the typical South African driver. It is difficult to directly compare the cost of recharging an electric car with a petrol or diesel vehicle. This is because different car models vary, as do electricity prices. But, most electric vehicles can cover up to 100 kilometres (km) with 15 kilowatt hours (kWh). An electricity user on Cape Town’s 2022/23 domestic tariff pays 298.30 cents per kWh. This amounts to about R44.75 for that 100-kilometre journey.
In comparison, one of the most fuel-efficient petrol cars available would require nearly four litres of petrol to cover the same distance. For example, the Fiat 500 Dolcevita, introduced to the South African market in 2021, claims a fuel efficiency of 3.8 litres per 100km. At October 2022 petrol prices of R22.36 per litre, this would cost the driver R84.97. That is nearly double the price of charging up an electric car. This significant difference in fuelling costs adds up to serious savings over the lifetime of an electric vehicle.
Electric cars and fuel security
As well as being more expensive fuel sources overall, petrol and diesel are less secure sources of energy for your car. Throughout 2022, prices at the pump saw many changes due to outside factors, such as Russia’s invasion of Ukraine. Even when wholesale oil prices came down, the price of diesel remained high. South Africa’s fuel imports have more than doubled in the past two years and continue to rise, causing concerns about the country’s fuel security.
In 2019, South Africa had six fuel refineries in operation. By the end of November 2022, there will likely be just three – the Synfuels coal gasification plant, the Astron Energy refinery and the Natref refinery in Sasolburg. Petroleum industry experts predict that if the Natref refinery were to shut down for an extended period, imports would increase to 60 per cent of local demand. This raises serious doubts about the ability of South Africa’s port infrastructure to cope.
Electric cars are not vulnerable to fuel shortages or volatile wholesale oil prices. They can be fuelled wherever there is an electricity supply, whether that is at a home, a workplace or a public charging point.
The simplicity of the electric motor
Drivers of electric cars save a lot of money on repair and maintenance. An electric motor has fewer moving parts than a petrol or diesel engine, which means less opportunity for parts to wear out or malfunction.
Even the brakes in electric cars will experience less wear and tear. With a petrol-powered car, the brake pads are pressed against the brake disks. The kinetic energy from the moving vehicle causes brake wear. Moreover, the resulting dust from the brake pads is a source of pollution that can harm the lungs. With electric cars, some of the kinetic energy is instead converted into electricity that charges up the electric motor. This “regenerative braking” reduces wear on the brake pads and brake disks.
The most expensive component of an electric car is the battery, therefore replacing this is likely to be the biggest maintenance cost. Batteries for electric vehicles are expected to last between 10–20 years, or 500,000 miles (804,672km). As the technology improves, the staying power of electric car batteries may increase still further.
South Africa’s electric mobility potential
South Africa is well-positioned to benefit from the potential of electric cars. The country’s natural sunshine and wind speeds are enough for the country to be able to produce globally competitive solar and wind power.
Many businesses and households in South Africa have decided not to wait for government investment in renewables. They have become part of a “silent revolution”, installing their own small-scale renewable assets. Harnessing solar energy in your own backyard or on the site of your business is a way to avoid load shedding, save on energy bills and help the environment. Moreover, businesses or homes that switch to electric cars will find that generating some of their own energy makes it cheaper and simpler to fuel them.
Meanwhile, the growing network of EV charging stations is helping to support electric mobility in South Africa. In August 2022, Audi South Africa announced that it had finalised the installation of 33 charging stations across the country. The chargers will work for any model of electric motor vehicle, because the goal is to ensure that all EV drivers can feel confident travelling around the country. ‘Range anxiety’ – the often incorrect perception that charging stations are too few and far between – is a real barrier to the uptake of electric cars in South Africa. Drivers need the psychological security of knowing that charging stations are available even when not needed. This is why many big car brands are publicly investing in infrastructure projects, such as the Jaguar Powerway along the N3 and the N1 highways.
Electric vehicles and the economy
South Africa’s car manufacturing industry is an important contributor to the economy. Namely, 18.7 per cent of the value of domestic manufacturing comes from cars and car components. Accordingly, investment in the sector is strong. In 2020, the seven global car manufacturers that operate in South Africa invested a record R9.2 billion. The component sector invested R2.4 billion.
The export value of these products reached a record R207.5 billion in 2021. This amounted to 12.5 per cent of the country’s total exports. However, to continue with this level of exports, it is important that the sector keeps up with the times. Nearly three-quarters of the cars that South Africa exports are destined for Europe. However, the European Union has a 2035 deadline for ending sales of petrol and diesel cars. Therefore, South Africa’s car manufacturing industry can only remain a key contributor to the economy if it pivots to electric as soon as possible.
In President Ramaphosa’s February 2022 State of the Nation address, he spoke of change. “An important pillar of our Economic Reconstruction and Recovery Plan is to revitalise our manufacturing base and create globally competitive export industries.” On that account, manufacturers must adapt to changes rather than continuing to produce what they have always produced. Electric cars are critical to the continued strength of South African manufacturing.
Electric cars and the green transition
Manufacturers must also adapt to changing energy policies. In October 2022, South Africa moved closer to a Just Transition deal when the cabinet endorsed an investment plan from the Just Energy Transition Partnership. The plan is key to securing the USD $8.5 billion (R155 billion) in investment that was promised by various other countries. It is South Africa’s roadmap to deliver on the political declaration to move away from fossil fuels, signed at COP26 in November 2021.
Although the emphasis has been on coal, South Africa’s green transition must involve the phase out of all fossil fuels. South Africa also has a separate commitment to reach net-zero emissions by 2050. In a country where roughly a third of households own a car and road transport is a key contributor to emissions, switching to electric vehicles will be an important part of this transition.
The government recognises this. Consequently, it has begun to explore options to support the switch to electric cars. The Department of Trade, Industry and Competition published a green paper in May 2021, proposing some important changes. These include investment in electric mobility technology and an updated “fiscal and regulatory framework”. The overall aim is to give South Africa a competitive advantage in the field of electric cars. Despite slow progress with implementing any of the proposed measures, some sources report that the paper has already encouraged investment in electric cars, as it made the government’s hopes for the automotive industry clear.
Barriers to the uptake of electric cars
As things stand, South Africa seems fairly far off the tipping point for electric car adoption. The country may have the most advanced electric mobility market in Africa, but the number of electric cars on the roads is comparatively tiny. A January 2022 news report estimated that there were only 1,000 electric cars on South Africa’s roads out of a total fleet of 12 million vehicles.
Some barriers to the wider uptake of electric vehicles are almost universal. These include a lack of charging stations, high upfront costs for electric cars and a lack of consumer awareness. In South Africa, the concern with charging stations extends beyond just numbers. It is also about how they are distributed. They are mainly found in big cities and along major routes that connect those cities. This makes electric cars a less practical option for people in rural areas.
Another problem specific to South Africa is a tax structure that makes electric cars more expensive than they need to be. The government places a 25 per cent import tax on electric cars, while petrol and diesel cars incur just 18 per cent. Electric cars also incur a further 17 per cent ‘ad valorem’ tax because they are considered luxury items. Given that a high price tag is already a barrier, the government’s tax decisions actively discourage further adoption of electric cars. A change in monetary policy could reverse this.
A new perspective
Electric mobility is not intrinsically a luxury transport option, and it does not have to exclude people outside cities. 2019 pilot projects in Nigeria and India showed that two- and three-wheeled electric vehicles could be a tool to improve rural mobility. The projects used renewable energy mini-grids to power the vehicles. The subsequent findings suggested that this type of solution could improve access to jobs, education and healthcare in these rural areas.
Although the project used smaller vehicles, some of the lessons learned can be applied to electric cars in South Africa. It demonstrates that distributed power infrastructure could provide charging station connections without putting additional strain on the electricity grid. Furthermore, it also demonstrates the importance of understanding and working with communities’ existing priorities rather than imposing solutions on them.
The South African government’s green paper contains many solid proposals for making the country a global leader in manufacturing electric cars. It is now time to move forward with making these ideas a reality. At the same time, the government needs to change consumer attitudes. Different fiscal policies – including the removal of the ‘luxury’ tax – could help drivers to recognise that electric cars are actually a sensible, practical solution.