New NAAMSA report shows it’s dark days for the uptake of Eskom powered cars (EVs), but OEMs can’t be blamed.
A thought leadership piece released yesterday underlines the devastating effect on the sales of EVs owed to the government’s lack of policy clarity on such vehicles. It shows that of the 528 963 vehicles sold locally in 2022, only 502 were fully electric. That’s admittedly the highest-yet number for this vehicle category, but when in the context of adding to a total of just 1024 EVs sold since 2018, that’s uhm, shockingly miniscule.
Combining those 502 EVs with other so-called new energy vehicles (NEVs) that comprise plug-in hybrids (122 sold in 2022) and traditional hybrids (4050 sold), the total for the NEVs tallies at 4764 units; or just 0.88% of all vehicles sold locally last year.
Leaving aside traditional hybrids – of which the lion’s share were sold in the form of the locally-made and popular Toyota Corolla Cross that’s driven like a normal vehicle without concerns of range and charging – the flat appetite for NEVs stems directly from their exorbitant purchasing costs.
Internationally, hybrids are priced at 12% more than conventional ICE models; plug-in hybrids 43% and battery electric vehicles 52%. In South Africa, that price gap is further exacerbated by VAT and import duties, which at 25% is a further 7% higher than the duty for ICE cars – quite the opposite of an incentive to buy them.
The NAAMSA report aims to provide guidance to the Department of Trade and Industry and the Treasury towards speeding up a workable long-term strategy aimed at not just stimulating local EV sales, but critically, enabling local manufacturers to transition to a position that will be globally relevant and competitive.
If the move towards NEVs is forced without some form of purchasing incentive, the domestic market will significantly contract.
On the other hand, attractive subsidies (and conversely, higher carbon taxes for ICE vehicles) combined with a more holistic approach to charging infrastructure and EV consciousness would trigger a shift in the market towards more affordable, entry-level EVs. These would see the focus move away from the current sole provision of seven-digit unobtanium towards more wallet- and eco-friendly transport in line with global emissions targets.
