Incentives to Buy Electric Vehicles on the Cards for South Africans

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Trade & Industrial Policy Strategies (TIPS), a research organisation that facilitates policy development and dialogue across trade and industrial policy, conducting research on inequality and economic inclusion, and sustainable growth, is currently researching the possibility of rolling out incentivised electric vehicles in South Africa, according to Broad Media.

The organisation says that electric vehicles are set to become very dominant in the coming decades, adding that these vehicles are already increasing on the roads of the world. The organisation is, however, fretting that South Africa will be left behind because of its current economic structure.

TIPS’ research looks at how an inclusive rollout of passenger cars could be incentivised in South Africa, effectively to sway entry-level buyers to purchase EVs instead of petrol-based internal combustion engine (ICE) vehicles. It is also considering how to introduce EVs into public transport, to extend the benefits of e-mobility to low-income and lower-middle-income households in the country.

“The rollout of EVs in the passenger car market is influenced by a series of factors. These range from domestic structural inequality to automotive market dynamics, and to policy developments,” TIPS said.

In an article by the Daily Maverick last year, President Cyril Ramaphosa approved of the vision to manufacture using green technology and the shift to using electric cars.

In April 2020, TIPS said the number of EVs available in South Africa remained limited, with only two battery electric vehicles, 23 hybrid electric vehicles, and 10 plug-in hybrid vehicles (PHEVs). The organisation also said that there were no fuel cell electric vehicles on offer at the time.

“Based on Barnes et al., the incentive is recommended to be set at $5,306.12 (R80,000) for BEVs, $2,652.93 (R40,000) for PHEVs, and $1,326.49 (R20,000) for HEVs. These are the levels of incentivisation required to meaningfully support the transition to EV consumption in the highly price-sensitive first two quintiles of the South African market, and to encourage EV consumption in the more expensive, less price-sensitive market segments,” the TIPS report read.

By Zintle Nkohla

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