The tipping point for battery-electric vehicles (BEV) in South Africa is anticipated to occur around 2032, provided there is no government incentivisation to purchase these autos introduced before then.
Should incentivisation become a reality, the timeframe is shortened to 2029.
This is the view of Greg Cress, Principal Director of Automotive and eMobility at Accenture, who spoke on key trends in the South African automotive landscape at Toyota’s annual State of the Motoring Industry Address.
The inflection point is the point at which BEVs get to around 5% of the total passenger car parc. At present, while around one in five cars sold globally is a BEV, South Africa is far behind in terms of electric adoption.
The missing link
In 2023, just over 1,000 BEVs were bought within our borders according to the International Energy Agency. In comparison, around 450,000 BEVs were registered in the United Kingdom and 470,000 in France, both of which have a similar population size to South Africa.
A big contributor to these high sales figures was government incentives, something the domestic market lacks.
In France, for example, the government had a 1.5-billion euro (R29-billion) fund allocated to a programme that allowed for incentives of up to 7,000 euros (R136,000) for consumers financing or leasing a BEV.
The policy helped lower-income households access such a vehicle from as little as 100 euros (R1,900) a month, according to Reuters.
However, in late 2024 the French government significantly reduced its support programme, lowering the total budget to one billion euros (R19.4 billion) and the maximum support per buyer to 4,000 euros (R77,000).
Its reasoning: “Thanks to the economy of scale and to progress on batteries, the cost of electric vehicles has gone down and their share of total vehicles sold has increased, reducing the need for subsidies,” said the finance ministry.
This, Electrive reports, is expected to stimulate the purchase of around 200,000 BEVs in 2025. By comparison, almost 240,000 electric vehicles were sold in France in just the first ten months of 2024.
Representatives for the French automobile industry said government assistance was still needed as BEV sales had stalled by 17% and automakers need to sharply lower carbon-dioxide emissions for vehicles they sell if they want to avoid heavy European fines.
This illustrates the dramatic impact on car sales the incentives had and suggests that if South Africa had something similar, we might have been much further in BEV adoption than we currently are.
Of course, the notoriously untrustworthy national electricity grid and a perceived lack of a public-charging network also complicated things, but with new charging stations popping up every day in all corners of the country and over 300 days of no load-shedding (we won’t talk about that one weekend), these concerns have somewhat been quelled.
Many of those who have the means but are just on the precipice of BEV adoption have also begun relying on solar power to keep them going more than Eskom’s lines which further reduces sleepless hours, and more and more brands are competing to see who can bring the most attainable battery-driven wheels to the country the quickest as they are well aware of the affordability concern.
Government knows of these phenomena and has finally started taking steps to address the country’s slow start out of the blocks.
President Cyril Ramaphosa signed new manufacturing incentives into law in December 2024 which allows vehicle companies to claim a 150% tax deduction on investment in BEV and hydrogen-fueled vehicle production facilities set up in South Africa.
The country is an attractive destination for BEV assembly as it’s the world’s biggest producer of manganese, it mines nickel, and it has deposits of rare earths — all key components in the manufacture of car battery packs.
It’s also the largest miner of platinum, used in the fuel cells that power hydrogen-fueled vehicles.
These tax breaks have already caught the eye of at least three Chinese automakers, who signed non-disclosure agreements with Naamsa the Automotive Business Council.
The policies have the potential to safeguard the future of the country’s vital automotive manufacturing sector – which is responsible for approximately 5% of the national GDP – as important export markets transition further into an emission-free future, but consumers have somewhat ended up with the short end of the stick.
The manufacturing incentives are only the first phase of the country’s New-Energy Vehicle White Paper, with the second phase expected to place priority on motivating private buyers to purchase electric and hydrogen-fueled cars.
Unfortunately, said Ebrahim Patel, Minister of Trade, Industry, and Competition, in early 2024, this is only expected to take place in approximately seven years, giving us a ballpark year of 2031.
This lines up perfectly with the prediction of Accenture’s Cress, who projects that 2032 should be the year in which BEVs go mainstream in South Africa.
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