Daily Maverick
Dailymaverick logo

Business Maverick

Business Maverick, South Africa, Our Burning Planet

Consumers eye electric cars, but price and availability are deciding factors

Consumers eye electric cars, but price and availability are deciding factors
Georgina Crouth
By Georgina Crouth
17 Oct 2022
Facebook
1
With only 2,689 new-energy vehicles sold between January and August 2022, the market is currently niche. AutoTrader says that although customers are interested, price and availability remain a barrier.

Some consumers in the market for a car would consider electric vehicles (EVs) or hybrid vehicles — if they were more affordable. 

Online automotive marketplace, AutoTrader, in partnership with Smarter Mobility Africa, has released its third report on the market for EVs, which questions whether demand is growing due to motorists’ genuine desire to go green, or on the strength of a push from suppliers influenced by the European market, which is increasing pressure on local production plants to adapt to the technology.

With only 2,689 new-energy vehicles (NEVs, which include fully electric and hybrid vehicles) sold between January and August 2022, the market for NEVs currently is a fraction of that for internal combustion engines (ICE).

The Automotive Business Council’s (Naamsa) latest sales estimates show that 1,715 traditional hybrid and 476 plug-in vehicles were produced locally in August 2022. Of the 1,022 imported, 267 were medium commercial vehicles, 99 were plug-in hybrids and 654 were traditional hybrids.

These figures do not include BMW, which reports sales information quarterly, in line with its global directive.

Compared with sales of ICE vehicles, this has a minimal impact on the market. Naamsa’s September 2022 new passenger car market was estimated at 32,392 units, compared with the 29,537 new cars sold last September.

The 2022 AutoTrader Electric Vehicle Buyers Survey of 4,000 “in-market car buyers” who are actively looking to buy a car reveals a slight shift in sentiment around full EVs, but says the initial cost is a disincentive for customers.

Higher taxes


EVs in South Africa incur higher taxes than ICE, with the former attracting taxes of 25% as opposed to 18% on ICE imports. This makes a substantial difference to the price, says George Mienie, AutoTrader CEO, which is driving customers to adopt a “wait and see approach”.

Most respondents in 2022 (73%) cited reduced carbon emissions as the biggest advantage of an electric car, with older customers in the 55 to 64 age bracket placing the highest value on EVs’ green factor.

Air pollution came in second, with 61% of respondents concerned about fossil fuel emissions, while 57% of respondents said cheaper running costs were the third-biggest advantage of an EV.

Visit Daily Maverick’s home page for more news, analysis and investigations

Styling appeared to be an afterthought, with just 4.7% placing stock in appearance.

For the first time, the initial cost of purchase was noted as the biggest disadvantage of an EV (65%), while 51% of respondents believed a lack of national charging infrastructure to be a disadvantage and 59% saying charging time was a concern.

The EVs considered in the survey included Audi’s e-tron, e-tron GT and RS e-tron GT; BMW’s iX and iX3; Jaguar I-Pace; Mercedes-Benz’s EQA, EQB EQC and EQS; MINI Cooper SE; Porsche Taycan; and Volvo’s XC40 P8 Recharge and XC40 P6 Recharge — the cheapest of which is the MINI Cooper SE, which has a starting price of R694,600, while at the other end of the market, the Porsche Taycan Turbo S fetches northwards of R4.1-million. AutoTrader has a second-hand 2020 Taycan Turbo S on its site, with a listing price of R3.5-million.

At such prices, EVs are still out of reach for most customers, but 64% of respondents said they would spend up to R500,000 on such a vehicle. 

Refuelling vs recharging


EV sales are growing, the report notes, but with just over 6,500 EVs on SA roads compared to over eight million ICE vehicles, it needs to make “cents” too: Citing the example of the full battery-electric Audi RS e-tron GT electric car — which has a 95kWh lithium-ion battery — Mienie said the 9.61% increase in the price of electricity, from R2.30 to R2.60, had a R28 impact on the charging price, while the increase in the fuel price over the same period would make refuelling R235 more expensive. 

Later this month, the inaugural Naamsa/South African Auto Week will be taking place at the Kyalami International Convention Centre in Midrand from 25-28 October, which coincides with Transport Month. Co-sponsor Wesbank said the shift to clean energy production will have a profound impact on South Africa. 

Alan da Silva, sales and marketing executive at WesBank, says original equipment manufacturers will need to gear their plants for NEV production and remain competitive.

Government support ‘essential’


“Government support to the SA auto industry is essential to assist the manufacturing sector to adjust to these NEV changes. Without this, it is unlikely that we could be a competitive global player and the risk is that the manufacturing of these vehicles will take place elsewhere in the world.”

Da Silva said the rollout of NEVs will have a profound impact on South African issues such as revenue collections (through fuel taxes); job security for fuel forecourt employees; powering NEVs on an already constrained grid; rising electricity costs; the evolution of the taxi and public transport systems, and the availability of suitable vehicles to power commercial fleets.

Declan Jones of WesBank said that while global adoption of NEV was accelerating, SA’s energy crisis was stifling uptake. 

“The reality is that, at least initially, these vehicles will be restricted to a niche population with the ability to afford NEVs. While vehicle prices are reducing, the access to charging ports and cleaner energy options will burden the consumer more than just the cost of the vehicle.” BM/DM

Categories:

Tags: