SA is experiencing slow transition to electric vehicles, says expert

Electric vehicles have taken centre stage in reducing greenhouse gas emissions around the world. This is no different in South Africa, but there has been a slow transition to make use of the vehicles.

GoMetro CEO Justin Coetzee says there is more that commercial players and government can do to safeguard the industry, because if not, the slow transition will negatively impact the GDP.  

Export of electric vehicles

He says in 2023, 75.5% of vehicles produced in the country were exported to the United Kingdom and the European Union.

“An estimated 67% of the SA’s automotive component exports are also at risk due to a predicted decline in demand, as noted in a Department of Trade, Industry and Competition’s EV White Paper.”

Coetzee adds that the transport industry is South Africa’s third largest source of emissions, representing almost 11% of the country’s aggregate.

He believes the only way to reduce emissions in this sector is to move away from internal combustion engine (ICE) vehicles to EVs, and some say also hydrogen vehicles (HV).

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Clearing the policy roadblock

He explains that the government’s goals for the implementation of EV manufacturing are not supported by the policies that are currently in place, particularly the high costs of importing EVs, due to unreasonable tariffs and duties.

“Government should aim to strike a balance between the preservation of export revenue and jobs and spurring the uptake of EVs in South Africa. Additional incentives could, for example, allow EV startups to pilot and test technologies and scenarios without the penalty of high import duties.”

Coetzee notes that there could be additional policies that can stimulate local manufacturing initiatives, and, as a result, this will accelerate greater corporate and consumer interest by narrowing the price differential between EVs and ICE vehicles.

A framework for compliance

He stresses that the country has no set process that checks if all new vehicles coming into SA comply with local standards.

“Instead, EV compliance is based on the existing standards for ICE vehicles.”

Another debate they have been faced with is the licensing for charging facilities, with scope for further regulatory clarification.

“Selling energy might become a complex issue down the line, and a coordinated effort between key government players alongside Eskom needs to come to the fore. This will ensure industry actors have the certainty to make investments.”

He adds that the Government has also not yet defined guidelines for the disposal of EV batteries. EVs therefore do not depreciate in the same linear ways as ICE vehicles and cannot be written off in the same financial time frames.

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