Electric vehicles are coming whether Eskom is ready or not

South Africa might be behind on the electric vehicle transformation, but things are beginning to change.

The cost of fuel has reached record levels and there is every chance that new record prices will continue to be set. We may plead for fuel levies to be removed and for prices to return to years gone by, but the reality is that fuel will continue to become more costly, not just to your pocket, but to the planet itself.

If you would like to get off that treadmill we will need to find an alternative.

Electric and hybrids

There are a few types of electric related vehicles which are either battery electric vehicles (BEV) or those which are hybrids. Plug-in hybrids use chargers and fuel; there are versions that only use fuel to charge the batteries. The fuel is typically petrol or diesel, but we may see others like hydrogen in the future. There are actually a very large range of hybrids.

The pure battery version is what we will ultimately see in the end, but while there are more fuel stations than charging stations, we will need the fuel for range.

Typically fuel stations have become the locations for charging, but you don’t typically spend a while at a fuel stop unless it is on a long commute, so more likely alternatives would be shopping malls and employers with staff that have parking spaces might also be a next step.

Home charging for most private owners would be enough given the shortest ranges are now over 200km and anyone with a daily commute of more than that should reconsider the impact of the commute, both on themselves and the planet.

The full electric models in SA are way more expensive than the internal combustion engine (ICE) models and are likely to remain that way for some time. What is more likely is that hybrids will fill the gap for those that want to switch for environmental reasons, but also for those that want to avoid the fuel costs.

In the end I suspect it will be fuel cost that gets the majority to switch. The rising fuel cost is a factor of changing politics, alarm about the environmental impact and ultimately the economic cost to stick with oil version electricity.

Electricity generation may take longer to switch from fossil fuels than transport simply because the investment and improvement in electric motors makes for a better alternative to even the most efficient combustion engines in terms of running costs (fuel and maintenance).

The government does not help at the moment with most full electric vehicles being imported and so subject to duties which are higher than other vehicles and will increase the cost by a hefty 25%.

The SA Government is looking to review this both to make it more attractive for local manufacturers to switch production to electric models but also to at least remove the penalties if not look to offer rebates or incentives to switch.

Those efforts are being supported by the uYilo e Mobilty Programme which was launched back in 2013, but given the relatively few projects and the small impact suggests more is needed.

Consumer led or Commercially led

While mass adoption will require consumers to make the switch, the advantages for running costs and fuel make it attractive to commercial customers already. Despite there not being many commercial vehicles available the efforts of companies like Everlectric which is a local logistics provider that offers businesses a fleet of electric commercial vehicles that can be leased and included free charging. It allows businesses to benefit from the lower running costs and depending on the market they serve might be a marketing advantage to attract more customers. Woolworths recently announced that it will be using the Everlectric partnership to switch 70% of its vehicles for electric ones. Woolworths customers that enjoy deliveries might be more inclined to use them over their competitors because they are using electric vehicles.

Once they switch, the challenge is to their competitors to do the same. No one is covering a retailer buying combustion powered vans, yet many news outlets reported on this deal, which now includes me.

The number of manufacturers and models available for commercial vehicles is growing with most of the major players having already released multiple models.

It means not only will the costs to buy an electric vehicle get better, the cost and availability of combustion models will get harder. Add to that the undertaking by many European countries to ban the sale of new combustion vehicles from 2030 and it is just a question of how quickly things will change and whether South Africa will move with those changes or be left behind.

Unfortunately we have tended to do well on the plans and then fail on the implementation and given we are only 8 years away from 2030, South Africa will either be way behind or have a truly dramatic shift given that electric vehicles are only a tiny percentage of the total number of vehicles on the road.

Manufacturers are making the move

Rather than a call that manufacturers might fight, it appears the SA Government might get a lot of support from manufacturers who will want to switch to make the most of the international demand and to ensure they don’t lose out to the incredible growth of Chinese electric manufacturers.

What about trucks

Commercial vans can use the battery packs and motors already designed for passenger vehicles but trucks need something way bigger, stronger and with a longer range.

Rail transport using hybrid engines is still the most efficient but unless there will be a major investment in new rail, the available road network will make an electric truck the next big piece of the puzzle.

It may still be some time before the truck shift begins in earnest but it is just a question of time.

Usually by now Tesla’s impact and share would have been noted by now, but rather than being a major player in the commercial sector through its much anticipated truck. The Tesla Semi was announced in 2017 with the view to be released soon enough afterwards that they began taking orders, five years later and Tesla’s reported 250 000 orders for the truck will have to wait a bit longer with the latest release date set for some time in 2023.

Why someone would pay up to $20 000 to order a truck that they would need to wait years for does not make much commercial sense and it remains to be seen how many they could produce when they do eventually start.

Public transport

Once the large vehicle challenges have been addressed and production capacity ramped up, we can expect to see public transport shift to electric soon after.

For noise, emissions and costs to operate in urban settings it is fair to say that we are unlikely to see as many combustion versions of public transport as we do now ever again.

It will not only be buses, the minibus is effectively a version of a commercial van and so the option for South Africa to move to electric taxis will also be a given. Some countries have switched by doing conversions to get the best from their current investment and the savings on fuel while others might opt to simply buy a new electric version.

For entrepreneurs the option to ramp up the creation and installation of conversion kits could be a huge boost with others looking to supply the charging options via solar options.

Eskom noted that it is compelled to acquire solar panels from the only SA manufacturer which lacks the capacity and at the moment the price competitiveness to supply what we need so it would be wonderful if the Taxi industry could drive the demand for a new renewable energy producer, new battery and charging infrastructure makers, commercial leasing deals to establish charging areas and finally the local manufacture of fully electric versions.

Besides the large scale conversions there are many other smaller use cases for conversions. South African game reserves are already looking to convert or acquire their game drive vehicles to switch them to electric and there will also be an appetite for fans of vintage vehicles to convert them and enjoy the styling and looks while getting the benefits of power and cost from electric.

In the end, consumers will switch whether they want to or not, the big push will be price. At the moment there is not much that ticks the box. Possibly the best crossover may be the Toyota Cross Hybrid which at over R400 000 is not cheap, but is not much more than the comparative combustion only versions. It becomes more attractive when you find it has the fuel consumption of a small car and is being manufactured in South Africa.

#BusinessUnusual looks at what impact the high petrol price might have on the tiny electric vehicle market in South Africa. @brucebusiness and @colincullis discuss at 7pm. Would you switch to a hybrid/electric vehicle?

— 702 (@Radio702) June 8, 2022

More from Business Unusual