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Wednesday / 19 June 2024
HomeFeaturesWhy electric cars are still expensive in South Africa

Why electric cars are still expensive in South Africa

The biggest reason for the extremely high prices of electric vehicles (EVs) in South Africa is a higher import tax put on these models when compared to traditional internal combustion engine (ICE) cars driven by petrol or diesel.

This was the view of author, motoring analyst, and journalist Alexander Parker in a recent interview on the topic of EVs on Cape Talk’s The Afternoon Drive with John Maytham.

Motorists looking to get into the electric revolution in 2022 can expect to pay nothing under R723,000 for the battery-powered Mini Cooper SE with 215km of range, as this is currently the most affordable new EV in the country.

A quick search on the pre-owned market also shows that even when going this route, the lowest-priced used EV, at the time of writing, is a 2015 BMW i3 going for R419,900which can’t exactly be called cheap.

Why EVs are expensive in South Africa

The principal cause of the substantial price tags for EVs in South Africa is a tax put on these vehicles by the government that doesn’t regard EVs as a possible solution for global climate change, but rather as a luxury item, according to Parker.

EVs face tariffs of 25% when being shipped into the country from another market, compared to the 18% paid on imported ICE vehicles.

On top of this, it’s generally the premium brands such as Audi, BMW, Mercedes-Benz, and Volvo who are currently leading the electric offensive in South Africa, which also helps to explain the higher-than-average prices of these types of vehicles.

There is a silver lining, however, as Parker notes change is possibly coming to the industry soon.

“It does appear that there is some movement at the Department of Trade Industry and Competition, and the Green Paper that’s been in circulation for 18 months, now, may be starting to be taken seriously and, perhaps, moving towards becoming policy,” he said.

The Green Paper becoming legislation would be a welcome change for the local manufacturing industry which has long been urged to kickstart EV production in South Africa as soon as possible for fear of being left behind by the rest of the world during the transition to green mobility.

Globally, there is already a shift in buyer preferences, and huge advancements have been made in the rollout of infrastructure and improvements of EV technologies, which we don’t really see mirrored in the local market, said Parker.

Consumer demand for EVs surprised even the most optimistic of analysts, with 13% of all the vehicles sold in the world last year being fully electric.

“No one saw this coming at quite the pace at which it is happening,” said Parker.

This already-strong demand is expected to snowball when EVs reach price parity with ICE vehicles, which according to PricewaterhouseCoopers, could be as soon as 2025.

He did admit that public charging infrastructure not just in South Africa but around the globe is somewhat lacking at the moment, largely due to the unexpectedly high demand for these vehicles.

However, he also noted that the vast majority of charging for most owners will take place at home or at the office, which relegates public charging to be used in emergencies or to top up the battery only.

Therefore, the infrastructure still has time to catch up before EVs go mainstream, but the same might not be possible for manufacturers producing vehicles domestically if supporting legislation isn’t implemented.

How green are electric cars really

Parker said the argument that EVs are less environmentally friendly than ICEs when using the grid to charge has been debunked a long time ago.

“Electric cars are more efficient in terms of carbon, even in dirty energy environments,” he said.

“Specifically, the South African environment is a really good example where we are almost 100% coal. It’s still more environmentally friendly to drive an electric car here [than an ICE car], despite the source of the energy.”

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