DAVID FURLONGER: Can minibus taxis ‘democratise’ the EV revolution?

The sooner minibus taxis embrace battery-powered electric engines, the sooner SA consumers will recognise the benefits of electric vehicles (EVs), participants in a motor industry webinar were told this week.

It’s not a unanimous view. The idea of dozens of taxi drivers crowding out other motorists at roadside recharging points, or racing silently along hard shoulders in peak-hour traffic, is not one to gladden the hearts of EV missionaries. But the point being made, that EV affordability should be more democratic, is a valid one.

In some markets, including SA, most EVs are super-expensive. Heiko Seitz, electro-mobility (e-mobility) leader at business consultancy PwC in Germany, says it is considered almost a privilege to own one. “E-mobility must not be a privilege for the wealthy but a commodity for the masses. We have to make it more affordable.”

Where better to impress its “everyman” (and “everywoman”) credentials in SA, than in public transport? Gaylor Montmasson-Clair, a senior economist at the private sector economic research company Trade & Industrial Policy Strategies (Tips), says that to engage the maximum number of people, “we have to bring EVs to buses and minibuses”.

Actually, a number of traditional bus companies have already tested the EV water. But minibuses? Nearly all minibus taxis sold in SA are HiAces built by Toyota, which is also the only motor company manufacturing hybrid electric cars, in the shape of the Corolla Cross, for the SA mass market.

That does not necessarily qualify Toyota to build hybrid taxis. The two vehicles are completely different. Besides the design and layout, the most obvious distinction is that one is designed for five people, while the other may (illegally) carry several dozen.

Nevertheless, there’s no doubt that when EV technology does eventually take hold in SA, the taxi market can’t be ignored.

Seitz and Montmasson-Clair took part in a webinar run by the Automotive Business Council (Naamsa). They were members of a panel discussing what SA has to do to be part of the worldwide EV revolution. Globally, annual EV sales have exploded into the millions. In SA, where Eskom can’t guarantee power, it’s a couple of thousand.

The department of trade, industry & competition should have published a policy white paper last year, setting out plans to encourage local EV sales and manufacture. Until it does, motor companies say they can’t finalise strategic, long-term decisions on future products. The urgency is heightened by the fact that over two-thirds of vehicles built in SA (more than 80% in value) are exported — many to countries that will ban the sale of non-EVs in the next few years. Montmasson-Clair says: “Discussions are ongoing about how to best structure an EV market. A suite of options is being considered. One is a direct subsidy to buyers of entry-level EVs.”

Another is how to stop EV prices being deliberately inflated. Thanks to a historic negotiating miscalculation that no-one seems in a hurry to correct, EVs imported into SA (that is, all of them), are subject to a 25% duty, rather than the 18% levied on internal combustion engine vehicles.

The problem is that, at the best of times, the National Treasury is limited in the amount of money it can throw at incentives. In the current economic climate, its wiggle room is even more restricted. Unfortunately, says Harald Wimmer, PwC’s global automotive business head, markets need incentives to get the EV ball rolling. Without them, no-one will buy. Seitz says: “You need them to sweeten the deal, to jump-start the engine.”

The good news is that incentives don’t have to last forever. In Germany, they are being phased out because so many EVs are being sold they no longer need artificial interventions to be competitive.

Prices are also falling naturally as growing assembly volumes reduce unit costs. Seitz says: “Most of the price differences are driven by the battery. That cost has come down by 90% in the past 12 years. Twelve years ago, a Tesla would have cost $80,000 more than it does now. Price parity is coming and that will lead to exponential growth in EV demand.”​