I’m not the kind of person who cares much about the loud tail-pipe noises that petrol heads love, I always remind people that at one point in our history, we rode horses, especially when talking about the future of electric vehicles in South Africa. However, horses have not disappeared, they have been replaced by Internal Combustion Engines (ICE) and relegated to the racetrack – and the same could happen to ICE vehicles when we go fully electric.
This may not be too far in the distant future, as car manufacturers are starting to make more and more electric variants and the demand for electric vehicles is rising. We see this in the data. In our recently published 2020 AutoTrader Car Industry report, the top 3 most searched for electric vehicle models on AutoTrader was the BMW i3, BMW 3 Series & Jaguar I-Pace. Interestingly, consumers still searched for the Toyota Hilux and BMW 3 Series as an electric vehicle despite these models not being available in the market. Could this be a sign that South African car buyers are ready and wanting for EV’s?
I recently caught up with Janico Dannhauser, (Product and Pricing Manager Jaguar Land Rover South Africa) and Winstone Jordaan, (Owner Grid Cars) and the crux of our discussion was around the future of electric vehicles in South Africa. With Jaguar Land Rover having won many accolades for the Jaguar I-Pace both locally and globally for the first electric vehicle SUV. GridCars being at the forefront of Electric Vehicle Charging Service Equipment (EVSE) and Charging Station Infrastructure and Management Systems it was clearly evident that South Africa is in some ways ahead of the curve unlike some of the more developed countries. Whilst the transition is welcomed by many, there are still a few grey areas that both OEM’s and the automotive industry need to work on as a collective.
Consumer education in the market about electric vehicles
As pioneers in the electric vehicle SUV segment, Janico emphasises the importance of consumer education on electric vehicles as car buying consumers need to be well-informed in order to understand the new technology. He strongly believes that by providing real information to consumers, car manufacturers will bust a few myths around load shedding, stability of the grid, range anxiety, infrastructure and even running costs.
It’s because of this that Jaguar Land Rover are working hard on educating consumers at their Jaguar Land Rover Brand Experience Center, in that way car buying consumers get to understand what electric vehicles are all about.
Local vehicle manufacturing is important
Whilst we’re thinking of driving the demand of electric vehicles in South Africa forward, we also need to think about electric vehicle manufacturing. The subsidiary opportunities that exist around battery cells, cell technology and all those elements/products that are driven by the growing demand of electric vehicles. This means we will not rely on external companies to come and build manufacturing plants in South Africa. In turn we will help build our economy and create jobs.
One of the things people talk about a lot when it comes to electric vehicles is range anxiety i.e. the potential of your car battery running out of power before the intended destination or a suitable charging point is reached.
After comprehensive research conducted by Jaguar Land Rover, they’ve found that the I-Pace can travel up to 470km on a single charge. However, given that the longest daily commute is about 60km, range becomes more relative to how and where you choose to drive every day after an overnight charge.
However, if consumers choose to drive to Cape Town, consumers will not experience a big change in behaviour in comparison to their normal driving habits. Major highways to Cape Town and Durban have charging points along the way for consumers to stop, stretch their legs and top up their batteries. It is a slight change in behaviour, but it isn’t that revolutionary, it’s an adaption that will take getting used to. It’s nothing very different from what consumers are practicing at the moment i.e. filling up the tank, drive it to empty, fill up the tank, drive it to empty. That’s not changed.
But that’s not how consumers should treat an electric car. Consumers are encouraged to treat the electric car like smartphones and charge it at almost every opportunity that they get because batteries actually deteriorate if taken down to empty.
Winstone however, advises that modern electric car batteries don’t suffer from any of these kinds of traditional myths as long the general guidelines of how to use the batteries is adhered to. According to an article he came across about range anxiety, that mentions range anxiety as the most over rated/under rated item. Why? Because once consumers start driving, they will never have to think about range again. Due to the pre-conditioning we’ve experienced through the fossil fuel-type vehicles that typically dictated the range for consumers, this will take some time to get used to.
Tax incentives for electric cars in South Africa are a challenge
In South Africa we seem to be battling with tax incentives on new cars, the import duties, etc massively impact on how much we ultimately pay for cars. Let’s take a look at how much car prices are impacted if consumers buy electric European cars:
- 25% import taxes on EV’s
- 18% import taxes on ICE vehicles
We’re in this odd situation where we actually pay more for our electric vehicles than the rest of the world, only because they have an incentive structure which we don’t. The countries that have tax incentives in place become very stimulated EV markets with one of the best examples being Norway.
As a member of Naamsa and a representative on the Electric Vehicle committee, Janico along with other industry bodies are lobbying with the government to make buying EV’s more affordable for consumers.
These conversations affect the entire automotive ecosystem and if pulled together may ultimately benefit South Africa as a whole. The benefit of South Africa implementing this after first world countries is that we can learn from the mistakes of other markets.
Besides the import duties car buyers have to pay, there are other taxes added onto the purchase price of the vehicle i.e.
- 15% VAT
- 40% Ad Valorem tax
All of these amounts added together is a lot of money for the average person in South Africa. More so, these amounts are made up from the entire ecosystem from the technology & charging infrastructure, installation fees, battery technology, training, etc.
If we cast our eyes into the future, Europe, America, Japan, China, and all the sources of the vehicles will stop accepting our ICE and second of all, they will stop providing us with ICE vehicles. What does that mean? If we don’t have scale at some point that demand curve starts to steepen.
Jaguar Land Rover are committed to electrification in the future, however, for now their future line-ups still consists of diesel, petrol, hybrid and electric vehicles.
Even though there is a plan for certain markets to be fully electric between 2035 – 2050, their commitment right now is to keep delivering on ICE engines and electric vehicles.
The South African EV charging point infrastructure
Winstone concludes by saying that the electric vehicle charging point infrastructure in South Africa is growing steadily with charging points between 100 – 200 kilometers of each other along major highways. All charging points are highly visible to customers or even visible on charging point maps.
Within the metro areas of Cape town, Durban and Johannesburg, consumers are never more than 20 kilometers away from a charging station. If consumers are within those metros, there’s at least another 50 charges across smaller towns. In essence there’s really good coverage of charging infrastructure in South Africa.
However, when you look at international trends, there is one charge of every 20 vehicles and we have one charger for every four vehicles. This reflects that we are ahead of the curve as a nation. Whilst we have this infrastructure available, not all consumers know what a charging station is, they at times mistaken it for a ticket paying machine – evidence of additional consumer education required.
Whilst we have the infrastructure in place, we shouldn’t take our foot off the pedal because vehicles sales will soon happen faster than deployment of charging infrastructure at some point.
The different types of charging infrastructure help consumers either fast charge or slow charge. There are between 60 and 80 kilowatts on most of our highways which give consumers an hour to an hour and a half of charging time depending on where your charge level was. It’s a reasonable break and then you’re off again. However, if you’re talking about home charging and inner city driving, then opportunity charging first, the home charging is especially for the Jaguar I-Pace for at least 200 kilometers, but if you’ve got a daily commute of 200 kilometers, you could probably be charging all the time.
The more the electric vehicles takes over, the more of this infrastructure we will have, meaning consumers could easily charge as they commute along i.e. office to malls and then back home, where consumers plug it in the whole night for maximum charge.
From what I see, it seems we’re going back to the horse example, where people would feed them in their homes, in the stables, only now we’d be ‘filling’ up electric cars at home, right? All that’s left is for us all to be committed to an electric vehicle future in South Africa.