Sales of electric vehicles surge in South Africa

Electric vehicle (EV) sales might be slowing down internationally, but in South Africa we’re just getting started.  

The latest sales figures from the National Association of Automobile Manufacturers of South Africa (Naamsa) reveal that customers bought 3,042 new energy vehicles (NEVs) in the first quarter (Q1) of 2024, which is up by 82.7% from the 1,665 units sold in the same period last year. 

NEVs include electric and plug-in hybrid vehicles. Battery-powered electric vehicles (EVs) do not have an internal combustion engine (ICE), whereas plug-in hybrids have both a rechargeable battery and electric motor and an ICE that runs on petrol. Hybrid vehicle batteries are smaller than those of EVs and have a much shorter range than battery-powered electric vehicles, and the car switches over to petrol once the battery runs out or if the driver changes the settings. 

The International Energy Agency expects EV sales to reach around 17 million this year, accounting for more than one in five cars sold worldwide. The agency says EVs will become a mass-market product in many countries. 

There are concerns about the industry’s pace of growth, which is being hampered by tight margins, volatile battery metal prices, high inflation, and the phase-out of purchase incentives in some countries, but global sales data show that in the first quarter of 2024, EV sales were about 25% higher than in the first quarter of 2023 (similar to the year-on-year growth seen in the same period in 2022). 

This year, the electric vehicle market is expected to expand by about 45% in China, 25% in Europe and 11% in the US, due to hotting up competition among manufacturers, battery and car prices dropping, and ongoing policy support.

Goldman Sachs Research attributes three main factors to the blunting of EV penetration: 

1. Rising concerns about EV capital costs due to lower prices being realised for used EVs, as already seen in the UK, where the prices of used EVs have fallen sharply in recent months;


2. Uncertainty about a number of elections this year (more than 50 countries are going to the polls in 2024) has taken the spotlight off potential changes to government policies affecting the EV industry; and


3. A shortage of rapid-charging stations. Despite the acceleration of EV penetration, rapid-charging station infrastructure issues have emerged as a big problem, with several car manufacturers saying that concerns about driving range and charging infrastructure are increasing.