By Justin Manson, Sales Director at Webfleet Solutions
Eskom’s Chief Executive Officer, Andre de Ruyter, has warned that South Africa can expect another five years of load shedding as the country continues to face a shortfall of 4 000 megawatts. Not only do these rolling blackouts hinder the country's economic growth, but they also contribute to the country falling behind in the rollout and adoption of electric vehicle (EV) technologies.
According to an international study conducted by StressFreeCarRental.com, approximately 1 100 vehicles, out of 10 million on the country's roads, are EVs. This number only increases by a handful every month, whereas globally, numbers are growing by up to 40% annually. It’s also significantly lower than the 480 000 EVs found on the roads of European countries like Norway.
Barriers to EV adoption in SA
Load shedding is a considerable barrier to investment in electric vehicle infrastructure, which paints a bleak picture for the large-scale adoption of this mode of transportation. Although we're seeing the establishment of charging stations in parts of the country, like the Western Cape, which recently opened another EV station in Somerset West, the country’s charging network will only ever be as good as its power supply.
Unfavourably high import duties imposed on EVs are another barrier inhibiting the growth of this industry. These vehicles incur up to 25% import duties, while, in comparison, internal combustion vehicles (ICE) are significantly lower at 18%. EVs are further subjected to ad valorem tax because they are considered by tax legislation to be luxury items. The average ad valorem tax for EV products in 2020 was 17%.
A promising outlook for the industry
Despite these hurdles, the increasing cost of fuel along with government and societal pressure for greener operations has been enough reason for businesses to consider investing in EVs and EV fleet management technology.
The Londolozi Game Reserve is an example of an early adopter of this technology. The business received its fifth all-terrain electric research vehicle from Land Rover South Africa in 2014, after unveiling its prototype EV five years before. There have also been some groundbreaking developments in EV technology manufacturing by Durban-based company Maxwell and Spark. The company manufactured the world's first battery-electric truck refrigeration system known as PolarLi, which effectively replaces standard diesel truck refrigeration technology to promote greener trucks.
We can expect to see even more of these breakthroughs simply because operating an electric fleet is significantly less costly in the long run than ICE vehicles, as they don’t need expensive and harmful fossil fuels. EVs are also simpler and cheaper to maintain because they have fewer moving parts, so fleet managers save a considerable amount on maintenance costs and ultimately reduce their carbon footprint.
The 2018-2050 Green Transport Strategy (GTS) for South Africa aims to accelerate this adoption through collaborative efforts between the Department of Transport (DoT), the national, provincial, and local government departments and authorities, as well as the automobile industry by setting annual targets for the uptake of EVs and hybrid electric vehicles (HEVs) in the government vehicle fleet. It will also assist in establishing and developing local EV original equipment manufacturers (OEMs).
These developments present a significant investment opportunity for EV technology manufacturers and charging station suppliers. Fleet management solutions like the WEBFLEET EV fleet management software assist early adopter customers in the EV transformation journey by providing a fleet electrification data report which evaluates customer’s current fleet and recommends which vehicles could be replaced with an electric model. In addition, data retrieved from the software helps fleet managers optimise their workforce planning, monitor their electric vehicles from anywhere, provides real-time battery levels and provides EV charging reports to help businesses manage their electric vehicles more effectively.
Although the country still faces numerous hurdles along its path to EV adoption, the government's willingness to collaborate with the automobile sector and groundbreaking South African innovations in EV and EV technology hint at a promising outlook for the industry.