The South African government needs to follow in the footsteps of its Australian counterpart when it comes to incentivising electric vehicles (EVs) and making them more affordable. So says AutoTrader CEO, George Mienie who – for many years – has been advocating for increased EV ownership in this country.
Australia has just passed what is known as the Treasury Laws Amendment (Electric Car Discount) Bill. In terms of this piece of legislation, EVs will be exempt from import tariffs and fringe benefits tax. “The implications are considerable,” explains Mienie. “Practically, this will see the price of some EVs being reduced by up to $9,000 (roughly R103,074) for businesses or $4,700 (about R53,827) for individuals.”
There are also plans in Australia 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.1. “This will impact the second-hand market – the increased availability of used EVs could bring down prices for consumers substantially,” explains Mienie.
The AutoTrader CEO – who has owned an EV for over a year now – says that the South African government would be well advised to implement similar legislation. “We have done a considerable amount of research into EV ownership,perceptions and expectations in South Africa. We know that consumer demand for EVs is growing exponentially,” he points out.
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 Views of Adverts (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%, pointing to a larger audience of in market car shoppers 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 cost of purchase 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,” Mienie points out.
He says that it’s time for the EV anomaly to change. “South Africans pay 25% import taxes on EVs and 18% import taxes on internal combustion-engined vehicles. Hence, we’re in an odd situation whereby we actually pay disproportionately more for our EVs than the rest of the world by comparison, only because they have an incentive structure which we don’t. The countries that have tax incentives in place have become very stimulated EV markets (with one of the best examples being Norway),” notes Mienie.
“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!” he concludes.
