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EVs to account for 70% of global passenger vehicle sales by 2040; SA must keep up

Price parity between electric vehicles and internal combustion engine vehicles is ‘getting really close’ – BloombergNEF.
EVs are more expensive than conventional vehicles, but have the advantage of lower maintenance and fuel costs (until the battery pack needs to be replaced). Image: Patrick T Fallon, Bloomberg

Electric vehicles (EVs) will account for about 70% of the global passenger vehicle sales mix by 2040, resulting in a corresponding drop in sales of internal combustion engine (ICE) vehicles.

“We are getting really close to price parity for these vehicles,” BloombergNEF senior associate Andrew Grant told the Smarter Mobility Africa conference on Wednesday.

BloombergNEF is a provider of strategic research on the pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition.

Grant said several factors have led it to believe that ICE vehicles might have already peaked on a global basis.

These include policy trends, whether these are policy incentives or upfront subsidies for EVs; the flood of investments into EV charging infrastructure; and the significant cost decreases in the price of batteries for EVs, which have subsequently reduced the price of EVs to consumers.

Read: Government takes first step toward mapping out electric vehicle strategy for SA

Grant said decreasing battery prices for EVs is having a real effect on how affordable these vehicles are for consumers.

“For the US and medium-sized vehicles, you are looking at 2024 or 2025 for a battery-electric vehicle in that category and in that geography being cheaper on an upfront basis for consumers than for an internal combustion engine vehicle.

“So we are getting really close to price parity for those vehicles. This can vary depending on the geography and the vehicle segment,” he said.

Price tags in perspective

Absa Vehicle & Asset Finance head of strategy and business analytics Henry Botha said the obstacle to getting higher EV adoption rates in South Africa has not been the cost of EVs but rather how much more EVs cost than an ICE vehicle.

Botha said the average purchase price of a new vehicle in South Africa is between R300 000 and R400 000 while there are only a few EVs that cost less than R1 million and the majority are priced at between R1 million and R2 million.

He said 241 EVs – either electric or plug-in hybrid vehicles – were sold in South Africa in 2015 and EV sales in the country peaked in 2016 at 268.

However, Botha said only 126 electric and plug-in hybrid vehicles have been sold so far this year.

Botha does not believe cost is the only factor influencing EV adoption in South Africa, adding that with any new and fast-growing product development there are always early adopters who are prepared to pay a premium and take the risk of unknowns.

Botha said the second wave of adopters will however need to see EV vehicles in the sub-R600 000 price bracket to get EV adoption going.

Botha said it could take the next 10 years before South Africa gets to mass adoption of EVs, which will likely follow after 2030.

He said the biggest contributor to the monthly cost of a vehicle is the depreciation of the asset, with 58% of the cost of that vehicle being the cost of manufacture, distribution and getting it sold in the dealership and between 35% and 42% the depreciation that comes, along with the tax that gets levied on that vehicle.

Pros and cons

Botha said EVs are still more expensive than their equivalent ICE vehicles but EVs have the advantage of lower maintenance and fuel costs than an ICE vehicle.

He said the cost of electricity has increased by 17% in South Africa over the past year while petrol and diesel has increased by between 20% and 30% over that same period.

But Botha said the big difference between an EV and a gas-powered vehicle is that the electricity for an EV can be self-generated through solar panels at home and at the office, while that is not possible with an ICE vehicle.

Botha said up to 4 000 kWh of charge is required by EVs to travel 25 000 km a year, which at R2.70 per kW in South Africa means it will cost up to R15 000.

By comparison, a fossil fuel engine will require about 1 700 litres of fuel and, at the current rate of R18 per litre for fuel, will cost R31 000 to travel that same distance, he said.

Botha said the maintenance cost of an EV should be lower due to the regenerative braking and a less complex engine that has fewer items to replace and service at each service interval.

“Since maintenance cost and the cost to travel is lower for an EV, it should then give you lower depreciation because of the used market looking for vehicles that are less costly to maintain.

“With that we can assume that the depreciation on an EV will be lower than a petrol vehicle.

“Those two elements make us excited that an EV will have a lower long-term cost of ownership than an ICE vehicle, as long as we can sort out how it gets charged and that the charging can be done at a lower cost per kilometre than using fossil fuels, as is the case today,” said Botha.

He highlighted that the increased cost of an EV beyond eight years of age is related to the replacement of the battery, adding that this is a big concern and creates uncertainty for consumers.

He said EV batteries on average are guaranteed for eight years or 160 000km and the replacement cost is between R20 000 and R100 000 depending on whether the battery pack is rebuilt or replaced.

“This is a big expense waiting in the future of EV ownership but it can be planned for and saved up for in advance.

“It also means that … when the vehicle gets sold, the new owner of that second hand vehicle will need to set money aside for a future replacement,” he said.

Grant said a big factor in the challenges of EV adoption in the African market, and in South Africa in particular, is the availability of appropriate models.

He said the EVs that have been sold have been high-end luxury vehicles that are not designed for mass market adoption.

Entry level EVs

But Grant said that with the price of EVs declining, a lot of automakers are realising that they can produce entry level or mid-market EV vehicles at an economic level and sell them in markets like South Africa and throughout Africa.

“I think you are going to see a lot coming into African markets over the next decade and next few years, particularly from the Chinese automakers.

Read: Government, auto sector look to accelerate new-energy vehicle production in SA

“So I think the model availability will be there and that will certainly increase the chances of strong EV adoption,” he said.

However, Grant said policy incentives also play a role in reducing the price of EVs, as has been seen in other markets where there has been strong EV adoption.

Grant said these have not only been from the upfront purchase subsidies for consumers – there have also been a lot of tax incentives.

This could involve a range of more punitive incentives for importers of vehicles or restrictions on what automakers produce in the country to qualify for manufacturing grants, he said.

Read: SA drives ahead with policy framework to support local new energy vehicle assembly

“There are a lot of policy incentives that policymakers have at their disposal in order to bring costs down,” he said.

“It will be interesting to see from the African market what lessons are learnt from markets like Norway and more recent examples of strong policy interventions like Germany and how those can be adopted in Africa.”

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Makes a lot of sense seeing that we have such an abundance of reliable electricity.

Oh, don’t be such a pessimist! We’ve got the Karpowerships coming AND a new nuclear power station! With of course the HUGE excess from Medupi and Kusile! There will be a glut!


Talks about everything but the availability of electricity except to mention solar power. 99% of people do not have solar power available to them and if they do have it it is mostly at home. Most of the time the vehicle is parked at home during the night so solar power will not work then. Therefore most of the electricity to run these vehicles will have to be supplied by Eskom and they they cannot supply the county’s current needs let alone the needs of the thousands of electric vehicles the article thinks will be sold in SA.

“Most of the time the vehicle is parked at home during the night so solar power will not work then.”

Ever wondered where these vehicles are parked during the day?
The majority of PV deployed in SA is at commercial / utility scale not residential.

I suspect in a couple of years time companies will provide their employees with free car charging as a company perk, you can use intelligent chargers to slowly charge employee vehicles throughout the day with any excess PV.

Honda have you heard of a battery? You can most certainly charge your car at night because the solar panels have been charging the batteries during the day LOL!

Zuma had a plan to build 8 nuclear power plants at a cost of $76 billion. This would solved the power crisis and prepared us, for the electric vehicle age.

President Zuma was not perfect, but we have to admit, that he had foresight.

Haha this guy is hilarious!

Every single anc and eff member have a plan starting at A and ending c, after which they could not care as long as the voters get hooked that is all that matters…

The anc collectively and purposefully destroyed the manufacturing and construction industry as can been seen the one of the more recent moneyweb articles, they created a problem just for them to be seen as the Hero at a later stage unfortunately they never succeeded in solving the self made problem.

The idea was always to push up the price of electricity so that a handful of “BEE” Politically connected individuals would benefit generously.

When demand outstrips supply for long enough eventually the demand will subside, this can clearly be seen in the production of electricity which is probably at an record low since the dawn of democracy.

Hopefully enough voters are suffering and come up with a plan to change the vote so that sanity will prevail or more will need to suffer.

The only foresight Zuma had was to turn this country into a crime ridden hell-hole and oh man did he do a great job!

EFF stirrer:

you have it wrong again : if Former Prisoner Jacob Zuma really had foresight he would have upgraded our prisons instead of Nkandla


Good luck in travelling from Johannesburg to Cape Town in your EV. You can do about 500km and then your battery needs to be recharged for anything between 1-12 hours. Even based on the assumption that you will have a charging point every 500km, it is going to be a long journey definitely not possible in 1 day like it currently is. The big joke of course is that it will still be Eskom’s coal fire turbines producing the electricity so I don’t think that Gretha will approve.

“The big joke of course is that it will still be Eskom’s coal fire turbines producing the electricity so I don’t think that Gretha will approve.”

No, the big joke is that, apart from the electricity source being coal fired turbines, SA can’t produce enough electricity to support a surge of EV sales.

You wouldn’t believe how common EV’s are here in the first world, SA is so far behind the curve and has no way of catching up.

And I can guarantee that as soon as those charging stations are built they will be stolen and sold for scrap lol!

Not to mention the copper cables running under the ground!

EV’s should have specially designed, lightweight integrated solar-panelled roofs to allow for charging anywhere, anytime there’s sunshine. Some IEC vehicles already have glass roofs so it shouldn’t be that difficult to find a solution. Could be a nice challenge to solve for a organization like Battelle Memorial Institute in the USA.

A friend of mine from Sydney also had a good idea: Standardise EV batteries to be compatible with all EV’s, and then instead of re-charging one’s existing battery, one could just hire charged batteries as and when needed – similar to exchanging empty gas cylinders used at home. This would also make battery recycling also much easier for the recyclers and help bring down the costs.

If everyone is really so focussed on doing what’s right for the environment then this sort of co-operation should come naturally.

You mean COAL FIRED ELECTRIC VEHICLES?????? Ever wonder why this country sniffs the bum’s of other countries???? No original thinkers! Oh we have them but they are tucked away and we are given “stalwarts” or as I say WARTS.

It would be great to think that SA could move forward into the 21st century but we have to be realistic
– we don’t have the infrastructure in place for it
– our taxi associations have already taken out the competition in public transport by encouraging the destruction of Transnet, I doubt they will encourage the introduction of EV and the expense of upgrading their fleets
– whilst we have the precious metals, aluminum for battery bases and the technology needed, we do not have the manufacturing capability nor the skills required to take on EV manufacturing
– the above point means that we will have to Import ( with duties) the EV vehicles into this country – will make the cost of new vehicles for the average motorist prohibitive
– initially EV use will be affordable for only a minority which in turn could result in accusations of racism and WMC
The intro of EV will benefit the scrap metal dealers! Might compromise the PGM price balance with the flood of recycled platinum from catalytic converters? And would definitely be a great opportunity for the ruling party to feed from a new trough!
Sadlly, in my opinion, South Africa will have to live with redundant technologies ( coal fired electricity, combustion engines etc) a lot longer than the rest of the world.

Yip … regarding the taxis, Metro fibre cable was cut and damaged this morning in Cape Town bringing the rail system to halt in some areas. So even though they can see there is no copper, they still cut the cable. Now who do you think would do this?

EV’s sound wonderful on paper, with fantastic acceleration, low maintenance, virtually no noise pollution, etc. On the flip side, however, the high cost of replacing the batteries negates the low cost of maintenance. The cost comparison of fuel versus electricity to recharge the batteries in your article has one glaring omission, the tax you pay at the pump for fuel. How long do you think it is going to take before someone wakes up and taxes you to the same extent if not more for recharging your car’s batteries or the cost of licensing it?

Considering taxation on fuel how many governments will be willing to go without these billions and billions of easy income before they start a new taxation proposal.

Lol… my cellphone battery can’t even retain charge after a year and people think EV’s are the future.. what a joke

You can’t compare the LiPo battery in your phone to a LFP or NMC battery in a EV.
The tech in new EV’s that prolong battery life is quite extensive, is your phone’s battery liquid cooled?

But don’t take my word for it, Tesloop (a Tesla car rental agency) has a Model X that has only lost 26% of its capacity after 330 000 miles (531 083km) on the clock, that is basically Toyota Land Cruiser territory.

No hurry in SA.
Guess who will be supporting their BBBEE fuel industry investments for as long as possible.

Reading the comments makes me realise why South Africa is falling further behind technologically. When people moved from horse carriage to car there was a limited road network and a very limited fuel distribution network. These developed to meet the demand.

There is already an electricity network and battery costs are declining at a rapid rate which already makes storage viable. The opportunities for private electricity charging stations all over the country is huge. Every roadside property is potentially a location.

Tesla Model S batteries are showing less than 20% decline in capacity after 10 years of service and modern batteries are even better at less than 10%. These older battery packs are recycled into storage packs.

Charging times at a modern charger with proper battery management systems will already give you 300 km in under 20min and charging times are also rapidly declining.

Tesla has met every one of their production targets over the past 10 years and have an official target of 30 million cars by 2030. That would be about 30% of current global production. By 2030 battery cars will be close to 100%.

The plummeting cost curve is all in favour of electric vehicles and high electrical availability will be easier to achieve than was the case with petrol and diesel.

Today Tesla produces a Model 3 in 10 hours. Volkswagen takes 33 hours to produce a car. Most legacy automakers are doomed and will struggle to produce electric vehicles profitably given their inertia.

@Bacchus: “Tesla Model S batteries are showing less than 20% decline in capacity after 10 years of service …” I know time flies, but were these models of batteries in existence ten years ago? Perhaps as prototypes? Just asking.

Batteries together with PV cells I believe are the answer once they both become sufficiently efficient and affordable. Set to become the mini power station sitting in the backroom or garage of every household.

And the raw materials to manufacture all these batteries are available from?

Hold on Cowboys! Not so fast!

Too many unanswered questions about ‘Greenhouse’ gases and too many uneducated demands made by radicals to eliminate reliable power!

Due to unreliable power (Wind, Hydro, Solar) taking over reliable power (Coal, Gas, Nuclear) Europe and the USA are in a Power crisis.

We know that Eishkom cannot keep the power on and, in any case, an EV in South Africa is a joke. Ranges are too far and, whether you run on Coal generated electricity or Petrol here, it isn’t clean power.

“Ranges are too far”
How far is your daily commute?

12km! Typo.
An EV can hardly last 18 holes of Golf, never mind a trip to the Kruger!!

Plenty of EV’s now come with 300km+ of range. (Expensive ones like the Tesla Model S and Lucid Air come with 600km+ range)
I however don’t think that is what we need now, any EV with 150KM of range would be more than sufficient for the average South African’s daily commute.

I suspect most households that are already 2 car households will pretty soon have one EV for their daily commute and a ICE car for longer trips until charging infrastructure catches up.
Installing charging stations is also exponentially easier than putting up petrol stations.
You also don’t need crazy 250KW+ level 3 charging everywhere, at some point people need to sleep, while you sleep your car can charge at a leisurely pace.

Lots of cynicism here… bit sad really but I guess that’s the price of living in a country which consistently underperforms in every area. You have to develop a hard shell to cope with the constant disappointment. However, the reality is we are just a part of the world and the world is changing. Might as well get used to it! All of the issues that people consistently mention in connection with EVs are being addressed and revised. The reality is we HAVE to move away from carbon and EVs are one way to do that. From mining to refining to burning fossil fuels, there is damage caused every step of the way. Not that EVs are by any means pure as the driven snow in terms of the environment but they are still a major improvement over ICE powered vehicles. The days of being held prisoner by petrol are rapidly coming to an end.

As the use of EV’s is taken up more and more (as one read in such articles) slowly replacing ICE vehicles, it seems to have little impact of the international oil price, sadly.

Come to realise that “transportation” (covering passenger vehicles, up to light & heavy trucks….but excluding shipping & aviation) only uses a small % of fuel/oil. The bulk of oil consumption is still from “industry”.

End of comments.





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