How to accelerate adoption of EVs in South Africa
The future is electric, with many local car companies driving manufacturing in this direction to comply with future bans on internal combustion engines from key export markets like the UK in 2030. But several issues in South Africa's electric shift like slow uptake, value chain disruptions and tax implications will need to be addressed first. Craig Parker, Research Director at Frost & Sullivan joins CNBC Africa for more.
Mon, 11 Apr 2022 10:53:07 GMT
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AI Generated Summary
- High cost of electric vehicles is a major hurdle to adoption in South Africa
- Lack of charging infrastructure poses a barrier to widespread EV adoption
- Importing successful strategies from other regions and addressing tariffs can accelerate EV uptake in South Africa
The future of transportation lies in the shift towards electric vehicles (EVs), a trend that is sweeping across the globe. However, in South Africa, the adoption of EVs has been slow due to various challenges unique to the region. In a recent interview on CNBC Africa, Craig Parker, Research Director at Frost & Sullivan, highlighted the major hurdles towards increasing EV uptake in South Africa and discussed strategies to accelerate adoption. One of the key challenges facing the country is the high cost of electric vehicles. Currently, there are only about 650 to 700 pure EVs registered in South Africa, a minimal number compared to traditional combustion engine vehicles. The majority of EVs on the market are high-priced, making them unaffordable for many consumers. Furthermore, the lack of charging infrastructure in the country poses a significant barrier to widespread EV adoption. While some OEMs are involved in setting up charging stations, the infrastructure remains limited, with a particular shortage of rapid charging stations. This lack of infrastructure makes it difficult for EV owners to charge their vehicles quickly and conveniently. To address these challenges and promote the growth of EVs in South Africa, Parker suggested importing strategies that have been successful in other regions. He emphasized the importance of implementing both city-level and government-wide policies to incentivize EV adoption. In countries like Europe and China, policy measures have played a crucial role in driving the growth of the EV market. City-level incentives, such as congestion charges and tax benefits, have proven effective in encouraging consumers to switch to electric vehicles. In addition to policy measures, Parker highlighted the need for affordable EV options in South Africa. While some cheaper EV models have entered the market, their limited range and speed have hindered mass adoption. Parker proposed a model that strikes a balance between the high-priced vehicles in Europe and the more affordable options in China. By offering mid-range EVs at a lower price point, South Africa could attract a wider range of consumers to the electric vehicle market. Another key strategy for overcoming barriers to EV adoption is addressing the high tariffs and luxury charges imposed on imported EVs. Currently, EVs face a tariff of around 40%, making them significantly more expensive than traditional vehicles. Lowering these tariffs and luxury charges could help to reduce the cost of owning an electric vehicle in South Africa, making it a more viable option for consumers. Despite these challenges, Parker remains optimistic about the potential for EV adoption in South Africa. By implementing a combination of policy incentives, affordable vehicle options, and infrastructure development, the country can accelerate the transition to electric mobility. With the global shift towards sustainable transportation, South Africa has the opportunity to lead the charge in EV adoption and reduce its carbon footprint in the years to come.