Local manufacturers must focus on EV production

With different stages of load-shedding, some days leaving South Africans for hours without electricity, the conversation around electric vehicles (EVs) on home soil, might sound irrelevant to some people. There can, however, be no doubt that the future of motoring is electric.

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The question that needs to be answered, is what direction the South African motor industry will have to follow for long-term survival. A perspective on this issue was recently given by Mpho Dipela, Chairman and shareholder of Legacy Motor Group - LMG.

Mpho says the global drive to reduce emissions coupled with meteoric advancements in technology have radically accelerated the electrification of transport.

According to the International Energy Agency, for example, just 120 000 electric vehicles (EVs) were sold worldwide in 2012, compared to the new record of 6.6 million sales achieved in 2021. That means nearly one in ten of all vehicles are electrical in global sales. This year, indications are that EV sales could reach new highs yet again, with two million sold in the first quarter of this year alone – a 75% increase from the same period in 2021.

European policymakers declare that the region will be implementing a ban on the sale of petrol and diesel cars by 2035.

“As South Africans, this announcement is significant given that the European Union represents nearly two-thirds of the local sector's export market and accounted for R105 billion in sales in 2021. The high cost of remaining fixated on internal combustion engines would therefore be disastrous for both the automotive industry and for the country, given the importance of the industry as a key economic driver,” he says.

Mpho Dipela, Chairman and shareholder of Legacy Motor Group - LMG.

“This underscored the need for an urgent shift in our own automotive manufacturing production away from internal combustion to battery-powered engines. But as the world switches to EVs, the question inevitably arises: is South Africa ready to embrace the future of mobility?

Mpho says there are three roadblocks on the journey to electrification.

  • Eskom’s power constraints:

These resulted in more than 103 days of load-shedding in 2022 so far. The greater risk is that increased adoption of EVs will add to demands on our energy infrastructure. Additionally, the national grid's reliance on coal-powered stations will continue to reduce the effectiveness of EVs in cutting emissions.

To overcome this, we first need to get the basics right by securing reliable energy supply and decarbonising the grid – issues that we have been trying to solve for nearly 15 years. This said, evolutions in battery technology mean faster charging times with longer ranges, substantially reducing EVs overall energy demands.

  • Charging infrastructure:

“Few South Africans will be able to afford the cost of installing a home-charging station, which is also only possible for those with garages or assigned parking spots on their properties. As a result, many people will rely on public charging facilities, which are not yet widespread and are still unevenly distributed.

“To solve the problem, innovators around the world are introducing new solutions such as wireless charging technology that can recharge EVs while they are moving using special charging strips placed on electric road systems. But while this offers a compelling answer to the long-standing question of EV's charging capabilities and range, this seems like a towering goal for a country with a vast road network spanning some 750 811 kilometres, in which nearly a third of paved roads are in a poor to very poor condition.

  • High costs of EVs:

Finally, there is the barrier of prohibitively high upfront purchasing costs, preventing the majority of households and businesses from making the switch to EVs.

“While EVs offer the benefit of lower maintenance and running costs, the cost of acquiring an EV is currently more expensive than their petrol or diesel equivalents. For fleet owners involved in high-mileage services such as taxi operators and delivery companies, this is particularly concerning given the potential constraints on their service capacity.

“Again, evolutions in battery technology are gradually reducing EVs expense while increasing their range, but uptake may be slow without the addition of other financial incentives or subsidies. This said, the growth of Mobility-as-a-Service (MaaS) models among younger generations, particularly in Europe, is disrupting the automotive sector through reducing the need for car ownership.

“Ultimately, ready or not, the future of mobility is arriving, complete with its own set of challenges and opportunities. So, as we look ahead to 2023 and beyond, government and the private sector will need to work closely to rise to these challenges, or risk inflicting irrevocable harm on our economy and society,” he says.

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