KATE THOMPSON DAVY: Is SA ready for infrastructure and culture change needed to drive EVs?

KATE THOMPSON DAVY: Is SA ready for infrastructure and culture change needed to drive EVs?

2021-10-27 02:49:00 AM

KATE THOMPSON DAVY: Is SA ready for infrastructure and culture change needed to drive EVs?

Adoption will be determined by alteration of policies and demand, if the cars become more affordable

Picture: REUTERSAfter a $4.2bn Hertz order for 100,000 electric vehicles (EVs), Tesla breached the market valuation milestone of $1-trillion on Monday. It is the fifth company to do so, alongside the likes of Amazon and Microsoft. The others are all tech companies, which gives some insight into how the investors of the world categorise Tesla, despite it being technically a car manufacturer with a side of software. The deal led to a 12.6% surge in the company’s share price, the BBC reports.

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Tesla fascinates me, honestly. It’s been the apple of speculators’ eyes for a while — even when production speeds lagged and its headline-grabbing products (such as self-driving models) stayed largely in limited availability and testing. Interestingly, also on Monday Tesla pulled its latest update to the “full self-driving” car software — which was available for just a day or so — due to user reports of bugs. And “full self-driving” remains a bit of a misnomer as the cars are really semi-autonomous.

Still, I imagine those who bet on the principle of promise — both electric and autonomous — are enjoying themselves this week. The Hertz deal also includes the development of a network of charging stations in the US. Despite its market value Tesla remains a small player in terms of vehicle volumes, producing about 500,000 units last year. Even in the dark spot of the year that was 2020, 78-million motor vehicles were produced worldwide, reports Statista. headtopics.com

Globally though, the tide is pushing towards EVs. The UK government has stated its intention to prohibit the sale of diesel- and petrol-powered cars by 2030. The US is targeting 50% EV adoption by the same year, and China’s mandate to vehicle manufacturers is 40% of all sales by 2030.

Looking beyond 2030, speaking at a Smarter Mobility Africa conference earlier this month, BloombergNEF’s Andrew Grant shared the forecast that EVs will account for 70% of global passenger vehicles sales by 2040. The key matter in achieving that estimate, he said, would be price parity between EVs and non-electric (internal combustion engine) vehicles.

A solid number essentially said if we can’t keep the lights on reliably (thanks, Eskom), they can’t see themselves buying an EVSA has about 10-million to 12-million registered vehicles, of which a few thousand (estimates vary between 1,500 and 7,000) are fully electric or zero-emission cars. Tesla vehicles are not commercially available here yet; Cars.co.za says just four EV models are available locally. But five more are expected to hit the market shortly, including EVs from Audi and BMW. From what I could dig up, the cheapest EV on the local market is the Mini Cooper SE, priced at just more than R640,000. Importing an EV means swallowing a levy of 25% import duty, compared with 18% on internal combustion engine cars.

Thankfully, big change is on the cards here too. The department of trade, industry & competition published a draft green paper on the advancement of new energy vehicles in SA in May that includes using “tax reforms to support industrial policy ambitions”. Also in the document is a discussion of SA’s need to seriously consider electric vehicle battery manufacturing, which can comprise nearly half the cost of the vehicle. The car industry contributes about 6.8% to GDP. SA is a net exporter of vehicles, producing about 600,000 vehicles for export, according to Green Cape’s 2021 Electric Vehicles Market Intelligence Report. headtopics.com

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Audi’s Sascha Sauer says EV adoption in the country will be built on “four rings of e-mobility”: sustainability (net zero mandates, and so on), digitalisation, the rapidly improving performance of EVs, and design (versatility and aesthetics). All of these are principles Audi has embraced, yes, but Sauer says real change will come from “a collaborative voyage by all players in the market, not just the automotive manufacturers”.

Informal pollSo it seems likely that the changing mix (or lack thereof) of cars on our roads in the coming years will be, ahem, driven by both policy change and demand, if the prices shift to something a little friendlier towards the family budget. In conversation with Moneyweb earlier this month AutoTrader SA CEO George Mienie said he had seen a 211% increase in searches for EVs on the platform in the first half of 2021 compared with the corresponding period of 2020, but AutoTrader’s survey data shows price remains the biggest barrier, as does concerns over the range these vehicles can cover between charging.

Finally, there’s the matter of how these vehicles fit into our lives — into the multifamily, multigenerational, middle-class reality of local car buyer’s lives. A few weeks ago I did a small and wholly informal poll on my social channels, asking friends if they were ready to swap their cars for electric ones. The feeling from this crowd — with the acknowledgment that this is a tiny, self-selecting sample — was that people were tentatively interested but worried about the charging infrastructure in the country. A solid number essentially said if we can’t keep the lights on reliably (thanks, Eskom), they can’t see themselves buying an EV.

So once again I find myself — in this column about cutting-edge tech — asking if those responsible for the almost 200-year old tech could please step up. The rest of us are ready for the digital party and all its promise to swing into high gear. Read more: Business Day »

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