George Mienie, AutoTrader CEO, has been advocating for increased EV ownership in this country for many years. Now that Australia has a new bill to incentivise electric vehicles, he says South Africa should take a page from their book.
The South African government needs to follow in its Australian counterpart's footsteps when incentivising electric vehicles (EVs). To make them more affordable, Australia has just passed what is known as the Treasury Laws Amendment (Electric Car Discount) Bill. In terms of this legislation, EVs will be exempt from import tariffs and fringe benefits tax.
The implications are considerable. Practically, this will see the price of some EVs fairly reduced. The reduction amounts to $9000 (roughly R103 000) for businesses or $4700 (about R54 000) for the general public.
Australia also plans to convert the government fleet to EVs – and this fleet is substantial. In 2018, 38 300 new cars were sold to government customers in Australia. This will impact the second-hand market – the increased availability of used EVs could considerably reduce consumer prices.
The South African government would be well advised to implement similar legislation. We have researched EV ownership, perceptions and expectations in South Africa. We know that consumer demand for EVs is growing exponentially.
According to the 2022 South African EV Buyers Survey (3rd Edition), searches for EVs have grown by 102% year-on-year, which is just one indicator demonstrating their growing popularity.
Consumer Advert Views for EVs are up by 134% – versus 25% for cars with internal combustion engines. Most importantly, enquiries for EVs are up by 74%, indicating a larger audience of in-market car shoppers is likely to buy an EV in the near future.
The initial price may, however, deter them from that purchase.
Our survey established that the initial purchase cost is the single biggest disadvantage when it comes to EV acquisition (65% of our respondents indicated this). Therefore, it's crystal clear that EVs are simply too expensive in South Africa.
It's time for the EV anomaly to change. South Africans pay 25% import taxes on EVs and 18% import taxes on internal combustion engine vehicles. Hence, we're in an odd situation whereby we pay disproportionately more for our EVs than the rest of the world only because they have an incentive structure which we don't. The countries with tax incentives in place have become very stimulated EV markets (one of the best examples being Norway).
Countries such as Norway and Australia have shown us what we need to do. It's clearly time for South Africa to follow their example. EVs are the future! Our country needs to be part of that future!