REPORT INTELLIGENCE MARKET VEHICLES ELECTRIC

1 ELECTRIC VEHICLES: MIR 2021 2021

Images: Author: Department of EconomicDevelopmentDepartment andTourism. We thankWilberforce ChegeandJackRadmore This market intelligence report was produced withtheWestern inpartnership CapeGovernment infrastructure solutions.Working indeveloping countries, GreenCape catalyses thereplication and large-scale uptakeand large-scale of thesesolutionsto enableeachcountryanditscitizens to prosper. GreenCape isanon-profit organisation that works attheinterface of business, government for thetimeandeffort thatthey have putinto compilingthismarket intelligence report. and academiato identifyandremove barriers to economicallyviablegreen economy and publicationsby registering asamemberonourwebsite: www.greencape.co.za to any person orentityrelying onany of theinformation contained inthisreport. inthisreport isaccurate, noresponsibility isaccepted for any loss ordamage While every attempt hasbeenmadeto ensure thattheinformation published This documentmaybedownloaded atnocharge from www.greencape.co.za . Subscribe to orGreenCape receive alerts news, events, e-mail 42 HansStrijdom Ave, Foreshore, CapeTown, 8001 Editorial andreview: Layout and design: Cover imagecourtesy of Unsplash.com. Copyright ©GreenCape 2021 Acknowledgements All rightsreserved. GreenCape Disclaimer

Tamlin Lockhart and GlobalDistrictWatch uYilo, Green Scooter, Hiten Parmer, Pxhere, Cityof CapeTown GreenCape, JaguarSouthAfrica, BMWSouthAfrica, Lauren Basson, andNicholasFordyce Jack Radmore, Cilnette Pienaar, Wilberforce W.Chege

i ELECTRIC VEHICLES: MIR 2021 03ii ELECTRIC VEHICLES: MIR 2021 CONTENTS 5 What’s new? Executive summary 1 0 Introduction andpurpose7 1 3.7. 3.6. 3.5. 3.4 3.2. 3.1. South African industry overview 19 3.3.

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3.7.1. Market sizinganddynamics37 trade andGovernment revenue 36 The SouthAfrican EVvalue chain32 An overview of thedevelopment of SA’s EVindustry 27 South African automotive market supply 21 3.6.1. value chainandeconomy 35 Potential impactsof EVmarket growth ontheICE 3.3.1. South African automotive market demand24 The impactof COVID-19 23 2 Global industry overview 13 The EVpassenger vehicle market 37 The effect of EVs thebalanceof onoilimports, Commuter behaviourandtravel patterns 24 3 4.7. 4.6. 4.5. 4.4. 4.3. 4.2. 4.1. Policy andregulation 55

The CarbonTax Act 15of 2019 60 The 2019 Integrated Resource Plan(IRP2019) 59 The NationalClimate ChangeResponse Policy (NCCRP) (2011) 59 Preferential Procurement Policy Framework Act (PPPFA) of 2000 59 Green Transport Strategy (GTS) for South Africa: (2018 –2050) 58 The SouthAfrican Automotive Masterplan (SAAM)2021 –2035 57 (APDP) (2013-2020) 57 Automotive Production andDevelopment Programme 3.9. 3.8.

to facilitate market growth 54 3.9.4. 3.9.3. 3.9.2. market 52 3.9.1. 3.8.2. 3.8.1. Market drivers: EVandcharging infrastructure 47 3.7.3. 3.7.2. Market barriers 52 4 Lack of localskillsthroughout thevalue chain Lack of policy certainty for andsupport EVs 53 duties53 High import Products thatare notfit for theSouth African Local demanddrivers 48 Macroeconomic drivers 47 Charging infrastructure andnetwork 40 The publicandindustrial EVmarket 40 Funding and incentives 71 6.1. General database web page 73 6.1.1. Green Finance Database 73 6.1.2. Government funding and incentives database 73 6.1.3. Finfind database 74 6.1.4. AlliedCrowds database 74

GreenCape’s support to businesses and investors 79 5 7 9 6 8

References 81 Market opportunities 61 5.1. Local manufacturing and electrification of public transport 63 5.2. Lithium-ion batteries (LIB) production 64 5.3. Passenger vehicle manufacturing 68 5.4. EV use in construction, retail, and in underground mining 69

The Western Cape: Africa’s growing greentech hub 75 03iv ELECTRIC VEHICLES: MIR 2021 Figure 25:Passenger EVsalesin SouthAfrica since2010 Figure 24: LIBmanufacturing value chain Figure 23:Reserves of EVminerals intheSouthern Africa region EVglobalmarketFigure 22: share forecast Figure 21:How much respondents were willingto spendinpurchasing anEV Figure 20: Graphite priceover time Figure 19:LIBprice/kWh over time Figure 18:Year-on-year fuelpricesinSouthAfrica Figure 17: Proportion of ICElightvehicles exported andimported over the lastdecade Figure 16:Projected increase inenergy consumption inCapeTown Figure 15:Projected uptake of EVs inCapeTown Figure 14:Active andincomingcharging infrastructure stations inSA Figure 13:ICEandEVPassenger carsalesinSouthAfrica since2010 Fuel levyFigure 12: collected inSouthAfrica between 2008 and2020 Figure 11:Petrol anddieselconsumption from 2007 to 2018 Figure 10:Illustration of gainsandlosses intheICEvalue chaindueto EVuptake Figure 9:EVvalue chaininSA Figure 8:Modalsplitof work travel inSouthAfrica by province Figure 7: Commuter travel patterns indicated by thenumber of annual travel tripsby triptype Figure 6:Manufacturing hubs inSouthAfrica Figure 5:Forecast of globalEVsales Figure 4:LeadingEVmarkets globally Figure 3:SouthAfrica’s Total finalconsumption (TFC) of Energy by sector, 1990-2018 Leadingcountrieswiththehighestproportion of EVsFigure 2: innew passenger carsales Figure 1:GlobalEVsalesinrecent years LIST OF FIGURES 50 50 49 69 66 63 39 36 33 35 42 26 67 52 25 47 37 22 10 41 41 15 17 9 8 Table 15:Live heavyvehicle loadpopulationinSouth Africa: September 2020 Table 14:Availability of raw materials inthesub-Saharan region for lithium-ionbattery production Table taxes 13:Import and total aTesla costof importing All-Wheel ModelXPerformance Drive from theUKto SouthAfrica (MyBroadband, 2021) Table ICErestriction status 12: for SouthAfrica’s top vehicle export markets Table 11:OEMs, industry, anddistributors’ DCcharging technology Table 10:Overview of SouthAfrica’s conventional ICEvehicle September market: 2020 Table 9:Benefits anddrawbacks to South Africa of EVmarket growth and fewer oilimports Table 8:Recent EVdevelopments andnear-future plansby EVsector role players inSouthAfrica Table 7: Thehistory of theEVmarket development inSouthAfrica: 1970s to 2020 Table 6:Theimpactof COVID-19 onSouthAfrica’s vehicle production, exports, sales, andimports Table 5:Vehicle Production Market share of thetop OEMsinSouthAfrica Table 4:SouthAfrica’s market share of globalvehicle production Table 3:Private transport representation inSA Table Key 2: market segmentdefinitions and vehicle types Table 1:Overview of themarket opportunities, drivers, andbarriers within theEVMarket LIST OF TABLES 29-32 54 45 65 48 70 38 24 23 23 28 37 21 11 3

v ELECTRIC VEHICLES: MIR 2021 03vi ELECTRIC VEHICLES: MIR 2021 CO CPI CHAdeMO CCS CBT DMEA DER DC Cu CSIR CPUT CoCT/CCT Co CaF BYD BRT BMW BMS BFP BEV AV AU APDP Al AIS AfCFTA AEM AC AASA LIST OF ABBREVIATIONS AND ACRONYMS

2

2

Calcium fluoride Consumer PriceIndex CHArge deMO Combined Charging System Carbon Tax Carbon dioxide Department of MineralDepartment andEnergy Affairs Distributed energy resource Direct current Copper Council for ScientificandIndustrial Research Cape Peninsula University of Technology City of capeTown Cobalt BYD CoLtd (Build Your Dreams) Bus Rapid Transit System Bayerische Motoren Werke Battery Management System Basic fuelprice Battery electricvehicle Autonomous vehicles African Union Automotive Production andDevelopment Programme Aluminium Automotive Investment Scheme African Continental Free Trade Area Automotive Manual Export Alternating current Automobile Association of SouthAfrica HySA Hp HFCEV HEV GTS GP GMA GM GHG GERPISA GABS Fe FDI FCEV EV EU ES E-mobility E-MBT EC E-buses dtic dti DST/DSI DoT DoE DMRE

Hydrogen SouthAfrica Horsepower Hydrogen Fuel CellElectricVehicle Hybrid electricvehicle Green Transport Strategy Gauteng Province Gautrain ManagementAgency General Motors Greenhouse gases (International Automobile Network) Le Réseau International del’Automobile Golden Arrow Bus Services Iron Foreign Direct Investment Fuel CellElectricVehicle Electric vehicle European Union Energy storage Electric Mobility Electric minibus taxi Eastern Cape Electric buses of Trade,Department Industry andCompetition of TradeDepartment andIndustry of ScienceandInnovationDepartment of ScienceandTechnology/Department of TransportDepartment of EnergyDepartment of MineralDepartment Resources andEnergy LIST OF ABBREVIATIONS AND ACRONYMS OES OEM NMC Nm Ni NHTS NEV NEC NCCRP NCA NAAMSA NAACAM Mn MIR Mg MBT MaaS LIB LFP LEDA LDV LCV LCT-SA LCT KZN KWh Km/a ITAC IPP IFC I &F IDZ IDC ICE

Low-Carbon Transport Original equipment supplier Original equipment manufacturer Nickel manganesecobalt oxide Newton metres Nickel National Household Travel Survey New energy vehicle Nippon ElectricCompany National Climate ChangeResponse Policy Lithium nickel cobaltaluminiumoxide of SouthAfrica National Association of Automobile Manufacturers and AlliedManufacturers National Association of Automotive Component Manganese Market Intelligence Report Magnesium Minibus taxi Mobility-as-a-Service Lithium-ion battery Lithium iron phosphate Limpopo EconomicDevelopment Agency Light dutyvehicle Light commercial vehicles Low-Carbon Transport SouthAfrica Project KwaZulu-Natal Kilowatt-hour Kilometres perannum International Trade Administration Commission Independent Power Producer international Finance Corporation Infrastructure andfacilities Industrial Development Zone Industrial Development Corporation Internal combustion engine Exchange rate used: 1USDollar= R15 YTD WC Veh VALA VAA V2X V2H V2G UWC USGS USA UNIDO UNEP TRP TIA THRIP SUV SSA SOV SEZ SAIAMC SADC SAAM RE RAF PV PRCC PPPFA PJ/a PI PHEV PAYS PAYD OPEC

Year to date Western Cape Vehicle Volume assembly localisationallowance Vehicle assembly allowance Vehicle to everything Vehicle to home Vehicle to grid University of theWestern Cape U.S. GeologicalSurvey United States of America United NationsIndustrial Development Organization United NationsEnvironmental Programme Taxi Recapitalisation Programme Technology Innovation Agency Technology andHuman Resources for Industry Programme UtilityVehicleSports Sub-Saharan Africa Single occupancy vehicle Special EconomicZone South African Institute for Advanced Materials Chemistry Southern African Development Community South African Automotive Masterplan Renewable energy Road Accident Fund Photovoltaic Production Rebate Credit Certificate Preferential Procurement Policy Framework Act Petajoules perannum Production incentives Plug-in hybrid electric vehicle Pay asYou Save Pay asYou Drive Organization of thePetroleum Countries Exporting

vii ELECTRIC VEHICLES: MIR 2021

031 ELECTRIC VEHICLES: MIR 2021 first Chinahalved time after its (EV) salesfigures was seen for the year decrease inElectricVehicle price volatility. In2019 ayear-on- concerns, andcontinued crudeoil growing urban airpollution Agreement on climate change, stemming from theParis emission reduction commitments been primarilydriven by national 2013 has to 2020. Thisglobalshift number of salesover theperiod exponentially asevidenced by the electric mobilityhasincreased Globally, themomentum for electric vehicles market inSouthAfrica. suppliers, project developers, andtechnical advisers. Ithighlightscurrent investment opportunitiesinthe This market intelligence report iswritten for investors, originalequipment manufacturers (OEMs), equipment SUMMARY EXECUTIVE the development of theEVmarket. incentives in placeto accelerate have policies, subsidies, or South Africa (SA)doesnotyet up theglobaldemandfor EVs. strategies —whichislikely to drive of theirCovid-19as part recovery accelerating EVuptake —also their policiestowardsnow shifted countries across theworld have (NEVs), includingEVs. Many subsidies for new energy vehicles be experienced. uptake intheconsumer market will in SouthAfrica, thesamerisein price of EVs becomescompetitive down. Itisexpected that once the battery pricesdrive EVprices prices continue to fall. Decreasing change aslithium-ionbattery (LIB) EVs. However, thisislikely to ecosystem andvalue chainaround uptake andthedevelopment of the experiencing asteep riseinEV the ranks of thosecountries SA hasthus notyet joined retail trade, and maintenance. including downstream inwholesale, people directly andindirectly — industry employing up to 900000 (US$35.6 billion)in2019, withthe sector was more thanR500billion output. Total revenue from this GDP and27.6% of manufacturing landscape, contributing6.4% of player inthecountry’s economic The automotive sector isakey combustion engine(ICE)vehicles. market for theassembly of internal South Africa already hasastrong local green economy. advance inthe development of the development, jobcreation, and promise of sustainable economic by localmanufacturing holdsthe a thrivingEVmarket supported 2020).by (NAAMSA, 33% For SA, November 2020 haddecreased South Africa by theendof Total vehicle exports from sector haddecreased by 32%. production by theautomotive November 2020, thetotal domestic by 51%inquarter two of 2020. By domestic product (GDP) shrink saw theSouthAfrican gross with reduced international trade, industry. Thelockdown, coupled also affecting theautomotive limiting of active business activity, of thevirus. Thisincludedthe regulations) to reduce thespread national restrictions (lockdown national government implemented increased inSouthAfrica, the When theCOVID-19 caserate net exporter of vehicles. export market. SAis, therefore, a vehicles, predominantly for the produced more than600000ICE having second-tier market, South Africa isconsidered a • nascent EVmarket: emerging opportunities inSA’s Consequently, there are several by agreen energy transition. trajectory,low-carbon enabled Africa inthetransition to a social opportunities for South environmental, economic,and There are substantial for ICEvehicles globally. inevitable declineindemand the economicimpactof the for example, counteracting mitigation measures through, impacts of climate change resilience to someof theeconomic also result inincreased economic A thrivingEVmarket inSAwill public procurement. and Competition (dtic) for of Trade,Department Industry content requirements by the SA andare subject to ~80%local market. Buses are designated in buses largely for thedomestic market thatalready produces is especiallytruefor thebus case for electrification.This presents thebestbusiness Publictransport transport: electrification of public Local manufacturing and • world’s manganese. holds about 78%of the especially manganese. SA cathode battery chemistry, nickel-manganese-cobalt-oxide materials required for the to provide some of the raw SA’s miningsector’s ability industry. Thisiscoupledwith battery assembly andrecycling batteries because of itsexisting destination for lithium-ion possibly future manufacturing is anattractive assembly and (LIB) production: SouthAfrica Local lithium-ionbattery means of mobility. transportation astheirprimary 80% of SouthAfricans use public Travel Survey (NHTS, 2013), over per thelastNationalHousehold private vehicles, because as achieving thisrevitalisation than economically viableway of transportation isamore manufacturing for public space. Incorporating e-bus there isscopeto revitalise this this isaflatmarket inSA, driveline components.While duty-free importation of all enjoysfurther thebenefit of The assembly of buses • is developed. supportive policy environment demand increases andamore longer-term opportunityaslocal for thedomesticmarket isa export market. Manufacturing passenger vehicles for the manufacturing hub for electric capability to develop a automotive manufacturing Africa’s existing significant opportunity building onSouth a medium-to long-term manufacturing: There is Local passenger vehicle raw materials. in accessing andutilisingthese provide arange of advantages Union (AU) Agenda 63, could Area (AfCFTA) andtheAfrican African Continental Free Trade free trade policies, such asthe coupled withimproved regional closer geographical proximity The logisticaladvantages of mined inSub-Saharan Africa. required in the cathodeare Also, otherraw materials

2 ELECTRIC VEHICLES: MIR 2021 033 ELECTRIC VEHICLES: MIR 2021 temperature regulation. is gettingairunderground, and highest costsfor miningoperations economy. Thisisbecause oneof the where miningisakey sector of the opencast mininginSouthAfrica, machinery inunderground and for battery-powered EVs and medium- to long-term opportunity in underground mining:There isa EV use inconstruction,retail, and Table 1:Overview of themarket opportunities, drivers, and barriers withintheEVMarket public transport and electrification of Local manufacturing Opportunity SUMMARY OF MARKET OPPORTUNITIES Key drivers • Localcontent requirements for manufacturing, such as • Increase inrenewable energy usage andtheclean • Decreasing battery prices • Reduced fleetoperational costs, including reduced fuel • Publictransport demonstrates thebestbusiness case • Theneedto meetclimate obligationsandgreenhouse for bus manufacturing inSouthAfrica. the designation of over 70% localcontent requirements energy transition and maintenance costs. for alternative fuelapplications. gas reduction targets regulation underground. This saves onventilation andheat electric energy compared to diesel. efficiency of theconversion from less heatbecause of thehigher EV miningequipment produces health for miners. Additionally, lower costs, andsafeguarding requirements, andtherefore necessitating fewer ventilation other tailpipe emissions, thereby frommatter diesel and (PM2.5) produces nofineparticular Electric miningequipment in underground mining. being touted asaremedy for use emissions, they are increasingly Since EVs produce notailpipe operational expenditure. savingonmining costsand further and requires less maintenance — produces less noiseandvibration, The electricminingequipment also • Insufficient skillsthroughout the value chain • Lackof innovative andcost-effective financing • Thepoorprecedent created by theCityof CapeTown’s • Rigidpublicprocurement system • Slow localuptake dueto highupfront cost Barriers mechanisms andaccess to capital unsuccessful 2017/18 electricbus pilot opportunities in the EVmarket. and highlightsthemarket that are discussed inthis report, the majordrivers andbarriers Table 1provides anoverview of 15 of 2019 (SARS, 2020). recently enacted CarbonTax Act regarding emissions, such asthe prepare for changinglegislation effectiveness, aswell asto health benefits, andcost- reduced airpollutionfor public benefits of energy efficiency, companies wanting to reap the is increasing locally, owing to lithium-ion-powered forklifts Additionally, thedemandfor Medium –Long Term Table 1continued... (LIB) production Lithium-Ion batteries Opportunity underground mining retail, andin EV use inconstruction, manufacturing Local passenger vehicle Key drivers • Demandfor lithium-ion-powered increasing forklifts • Cost-saving sinceoneof thehighestcostsin • SouthAfrica already hasastrong automotive industry • Increasing international demandfor EV’s • Thepotential loss of existing trade markets through • Government efforts to increase localcontent, • Localcontent requirements for theprocurement of • Emerging needof Mn-richelectrodes thatcan • Availability andrelative easeof access to lithium • Availability of nickel, manganese(Mn), andotherkey • Anincreasing needfor lithium-ionbatteries (LIB) enacted carbontax regulation. regarding emissions, such as therecently as well asto prepare for changinglegislation benefits of energy efficiency and cost-effectiveness, locally, owing to companies wanting to reap the ICE vehicles underground. and less heatcompared to emissions from using underground. EVs produce notailpipe emissions underground miningoperations isgettingair that couldpotentially pivot to EVmanufacturing. current export markets for ICEvehicles the plannedphasingoutof ICEvehicles inmany of SA’s manufacturing industry volume outputs, andjobs inSA’s automotive facilities from IndependentPower Producers utility-scale Renewable Energy andenergy storage (security of supply) compete with‘invogue’ nickel-rich compositions and cobalt. Africa region raw materials inSouthAfrica andtheSub Saharan and globally consumer electronics andothersectors, bothinSA in renewable energy andstationary storage, EVs, • Insufficient skillsthroughout the value chain • Lackof innovative andcost-effective financing • Lackof localmanufacturing industry for construction, • Lackof apubliccharging infrastructure network • Insufficient skillsthroughout the value chain • Lackof innovative andcost-effective financing • Insufficient localdemand for EVs • Falling LIBpricesthatmaydiminishthefeasibility of • Lackof existing localsupply chain • Policy support • Abetter understanding of globalmanganese- • Establishing strong public-private partnerships Barriers mechanisms andaccess to capital retail, andmining vehicles mechanisms andaccess to capital local manufacturing of LIBs oxide demand that extend beyond SouthAfrica Medium –Long Medium –Long Medium –Long Term

4 ELECTRIC VEHICLES: MIR 2021

035 ELECTRIC VEHICLES: MIR 2021 • • • report are thefollowing sections: Among theadditionsto thisyear’s to read this year’s report infull,asthemarket intelligence hasbeen updated substantially. been several important developments inthesector. Readers of lastyear’s MIRare encouraged Since thepublicationof the2020 ElectricVehicles Market there Intelligence have Report, NEW? WHAT’S of the Covid-19 pandemicand The disruptions andimpacts underground mining; in theconstruction,retail, andin The opportunities EVs provide mining sector; and thepotential boostto the manufacturing opportunity (and solid-state battery) The locallithium-ionbattery • • within thenext year; launching inSouthAfrica and new vehicle models Local EVmarket developments banks canplayinthemarket; and therole thatcommercial New modelsof vehicle ownership Covid-19 recovery plans; that maybecaused by thepost- including thepositive impacts automotive andEVsector, subsequent lockdowns onthe • • • to trajectory, alow-carbon opportunities inthetransition economic, andsocial intensity), andtheenvironmental, emissions (and emission South Africa’s transport towardsare shifting e-mobility; Africa’s key export markets that ICE vehicle importation inSouth due to impendingrestrictions on Africa’s vehicle export markets The potential loss of South The gridimpactsof EVs; • • • Perception Survey. Results of the2020 NationalEV increase inEVs inSA; demand from theprojected to cater for theincreased energy policies guidingenergy provision, Legislation, regulations, and industry inSouthAfrica; on thesize of theautomotive updated statisticsMost recent, transition; enabled by agreen energy THE 2021ELECTRIC OPPORTUNITIES VEHICLES MIR SUMMARY OF TO WATCH A A WATCH TO CLICK HERE

facilitating theSouthAfrica Enabling, mobilisingand e-mobility ecosystem.e-mobility ©uYilo

6 ELECTRIC VEHICLES: MIR 2021 037 ELECTRIC VEHICLES: MIR 2021 equipment suppliers, project developers, andtechnical advisers. Ithighlights This market intelligence report iswritten for investors, OEMs, investment opportunities intheEVmarket in SouthAfrica. INTRODUCTION AND PURPOSE Source: (InsideEVs, 2020) Figure 1:GlobalEVsalesinrecent years market (UNCC, 2020). has thelargest share of theEV reduction targets. Chinacurrently as alever inattaining emission gained alotof attention globally for private consumers. EVs have make EVs anattractive purchase and non-financialincentives to since 2010, supported by financial market hasbeengrowing steadily Globally, theelectricvehicle (EV)

EV sales ‘000 300 200 350 250 100 150 50 0 2016 Jan 2017 Feb 2018 high, primarilydriven by thecost cost of purchasing anEVremains is because theupfront capital compete withtheICEmarket. This are stillvital to allow EVs to government andsubsidies support 2020). Despite thismarket growth, 2040 (European Commission, is projected to grow to 80%by Union willbeelectric,andthis all new carsalesintheEuropean It isprojected thatby 2030, 40%of Mar 2019 Apr 2020 May 2019, shown inFigure 1 below. June change in2019 salesafter in EVsales.Thisisevident from the in thetrend of continuous growth (NEVs) caused thefirst disruption subsidies for new energy vehicles in 2019, whenChina’s reductions in andsubsidiessupport was shown ICE vehicles. Theimportance of EV issignificantlyless than for ownership over thelifecycle of the of batteries. Still, thetotal costof Jun Jul Aug Sep subsequent lockdowns. by theCOVID-19 pandemicand volumes were drastically affected GlobalEVsale and 30%in2022. subject to 20% cutin2021 afurther been extended to 2022 butwillbe to terminate in2020, have now which were initiallyscheduled the subsidies andtax exemptions, by 10%asof April2020. However, (and otherenergy vehicle types) China cutsubsidies onnew EVs Oct Nov Dec

8 ELECTRIC VEHICLES: MIR 2021 039 ELECTRIC VEHICLES: MIR 2021 Source: (Statistica, 2020) passenger carsales Leadingcountrieswiththehighestproportion of EVsFigure 2: innew electric carsales. year-on-year increase inglobal Figure 2below illustrates a United Kingdom United States Netherlands South Korea Switzerland Germany Denmark Portugal Canada Belgium Sweden Norway Finland Iceland Austria France Ireland China 2% 2% 2% 2% 2% 2% 2% 2% 3% 3% 3% 3% 4% 5% 7% 8% United States Norway China 19% Top 3markets by total EVsales the overall carsalesbeingEVs. Norway, leadintheproportion of China andtheEU, particularly 73 000 361 000 361 1 053000 49% • • market. Theseinclude: have chosento theEV support governments across thesemarkets There are various reasons 1

With afew exceptions where certain countrieshave been given allowances to increase Cape Town). Cape Town (64% of energy in biggest consumer of energy in 2020).(NAAMSA, Itisalsothe increases over thepastdecade accounting for 91.2%of the GHG emissions inSouthAfrica, the fastest-growing source of to thetransport sector. Itis emissions, 15% canbeattributed fuels. Ofglobalgreenhouse gas because of itsreliance onfossil greenhouse gas(GHG) emissions a key contributor to global sector hasbeenidentified as commitments: Thetransport Emission reduction quality incities. they canassist inimproving air produce zero direct emissions, environment. Because EVs visibility, andthenatural a knock-on effect onhealth, pollution concerns, whichhas has resulted inincreased air Increasing motorisation incities Air quality concernsincities: reduce theiremissions obligingsignatoriesAgreement, to As of November 2020 theParis in the world. in theworld. most carbon-andenergy-intensive making theeconomy oneof the second onlyto theenergy sector, of GHGemissions, atabout10.8%; sector isthesecond-largest source (Cunliffe etal.,2018). Thetransport Transparency Organisation 2019, according to theClimate and developing countries asof in theG20 group of industrialised has thehighestemission intensity by renewable energy. SouthAfrica vehicles, asthey can bepowered an alternative to traditional ICE countries andtheEU. EVs provide Union (EU), andratified by 187 South Africa) andtheEuropean signed by 194countries(including Africa thatisataEuro 2level. fuel andthequality inSouth from thecombustion of fossil the transport sector, primarily for 91%of direct emissions across strategy. Road transport accounts of Transport’s Green Transport according to theDepartment 1.1% of overall globalemissions South Africa contributes about 1 , has been , hasbeen Figure 3:SouthAfrica’s total finalconsumption (TFC) of energy by sector, 1990-2018 Source: (IEA, 2020)Source: (IEA, average of the G20 countries. intensity isalmostdouble the in theG20, andSA’s emission (DoT, 2018). Thisisthe highest primary energy inSouthAfrica 92% are thelargest source of of Transport, fossil fuelsat According to theDepartment INDUSTRY ktoe 30 000 20 000 25 000 10 000 15 000 5 000 0 1990 TRANSPORT 1992 1994 RESIDENTIAL 1996 not enoughto achieve this. generation andsupply aloneare years. Reductions from energy by atleast32%inthenext ten Africa hasto reduce emissions commitments andtargets, South environmental andclimate To achieve ourcurrent 1998 2000 COMMERCIAL AND PUBLIC SERVICES 2002 2004 2006 2008 achieve thesetargets. alone are insufficient to system. ICEimprovements incorporated inthetransport met withoutEVs being sector by 2030 cannotbe have beensetfor theautomotive The climate targets that 2010 AGRICULTURE/FORESTRY Residential: 11402 2014 2012 2014 2016 NON-SPECIFIED 2018 global cleanenergy transition. are more idealandinlinewiththe energy sources like windandsolar counterproductive. Renewable electricity from coalsources is emissions. Powering EVs using charge them,i.e. dueto upstream as theenergy source used to Additionally, EVs are onlyasgreen NON-ENERGY USE

10 ELECTRIC VEHICLES: MIR 2021 0311 ELECTRIC VEHICLES: MIR 2021 EV market. to accelerate thegrowth of the any form of incentives orpolicies South Africa hasnotimplemented attractive inthisrespect. they are becomingincreasingly a variety of sources canpower EVs, electricity production derived from to oilpricevolatility. Because local billandexposurecrude oilimport alternatives thatwillreduce their many countriesare seeking of thecrudeoilprice. Asaresult, countries because of thevolatility transport sector posesariskto Reliance onfossil fuelsinthe country since1994. largest energy consumer inthe sector hasbeenthe second- oil equivalent. Thetransportation Africa expressed inkilotonnes of increase inenergy use inSouth Figure 3illustrates thegradual included ineachcategory. as well asthetypesof vehicles segment isprovided inTable 2, and industrial. Adefinition for each in thisreport are private, public, key market segmentsdiscussed of theSouthAfrican the market, several ways, basedonthecontext the market canbesegmented in and risks inthemarket. Although EV market andnotes barriers investment opportunities inthe Africa. Ithighlightsemerging state of theEVmarket inSouth investors withanoverview of the This report provides potential follow theglobaltrends intime. making itlikely that SAcould subsidies to befinanciallyviable, EVs mightnotrequire government continue to increase. Induecourse, the competitiveness of EVs will asthemarket matures,that, rise inuptake of EVs. Itisexpected countries experiencing asteep It hasyet to jointheranks of those Table Key 2: market segmentdefinitions and vehicle types Private transport Market segment Industrial transport Public transport Definition goods andmaterials. industry to move heavy used inthecommercial This refers to vehicles each trip. and charge afee for have dedicated routes, are typicallyscheduled, for use by thepublic.They travel systems available passengers by group transportation of It refers to the daily commuting. for personal travel and are predominately used vehicles. Thesevehicles owned andoperated It refers to privately Vehicle types • Miningvehicles • Trucks /Vans • Forklifts services • Ride-hailing • Metered taxis • Minibus taxis (MBT) • Commuter buses • City/Municipal bus • Micromobility e.g., • Singleoccupancy services scooters andbikes vehicles (SOV) • • • • include: report, but are notdiscussed in this by theemerging market for EVs, affected (directly orindirectly) Additional markets thatare • • • • investment opportunities: this report willfocus onfour key of electricmobilityisplausible, segments where theapplication While there are afew vehicle autonomous EVs; everything (V2X);and to home(V2H), andvehicle to — vehicle to grid(V2G), vehicle the role of EVs inenergy storage and EVinfrastructure; incentivising investment inEVs policy mechanisms for dynamics; the impactof EVs onliquid fuel and underground mining. EV use inconstruction,retail, manufacturing; and Local passenger vehicle manufacturing; Local lithium-ionbattery electrification of publictransport; Local manufacturing and its members. that GreenCape provides to Section 8focuses ontheservices growing greentech hub. the Western CapeasAfrica’s Section 7gives anoverview of and incentives. Section 6focuses onfunding South Africa. the growth of theEVindustry in uncertainties thatmayaffect opportunities, barriers, andmarket Section 5highlightsemergent policies andregulations. Section 4outlinestherelevant African EVmarket. overview of thestate of theSouth investors andbusinesses withan Section 3provides potential the market size. global EVmarket anddescribes Section 2gives anoverview of the In whatfollows: GREENCAPE’S SUSTAINABLE TO CONTACT TRANSPORT CLICK HERE SECTOR SECTOR DESK

number of charging ports ©Jaguar, SouthAfrica There are agrowing around thecountry.

12 ELECTRIC VEHICLES: MIR 2021 0313 ELECTRIC VEHICLES: MIR 2021 This sectionprovides anoverview of theglobalEVindustry to provide GLOBAL INDUSTRY context for theSouthAfrican industry. OVERVIEW

a future banonICEvehicles European countriesplacing Global EVsalescontinue between 2030 and2040. to rise, withanumber of ©BMW SouthAfrica

14 ELECTRIC VEHICLES: MIR 2021 0315 ELECTRIC VEHICLES: MIR 2021 Source: (InsideEVs, 2020) Figure 4:LeadingEVmarkets globally summarised inFigure 4below. sales between 2013 and2020 are The leadingmarkets interms of EV 25+75+L global market leader forEVs 25% 3rd largest Agreement onclimate change. reduction targets such astheParis commitments to emission largely to governments’ The growth canbeattributed 26+74+L global market leader forEVs 26% 2nd largest encourage theuptake of EVs. created generous incentives to frameworks andmechanisms, and have putinplaceenablingpolicy manyAs aresult, governments 42+58+L global uptake Leading the 42% for EVs and e-buses 42+58+L projected to grow to 80%by 2040. Union willbeelectric,and thisis all new carsalesintheEuropean also projected thatby 2030, 40%of the electricvehicle market. Itis currently hasthelargest share of As indicated inSection1,China (European Commission, 2020). and non-financialincentives economy regulations, andfinancial neutral by 2050, emission andfuel that aimsfor Europe to beclimate such astheEuropean Green Deal driven by government policies EV growth. Thisincrease hasbeen with Europe asthemaindriver of market share of new vehicle sales), increased million units (2.5% to 2.21 However, EVsalesin2019 reduced demandfrom China. 91.3 million,primarilybecause of was 91.8million.Salesdeclinedto Global car(ICEandEV)production to thereduction of incentives. growth trajectory for EVs, linked there was aslightlyreduced As indicated inSection1,2019 are theleadingbrands. territories, BYD, Nissan andTesla uptake inEVs. Intheirrespective markets leadingtheglobal America(25%)North are the China (42%), Europe (26%), and year (IEA2019). of the1.6 millioninstallations last accounting for more than90% was inprivate charging points, previous year. Mostof thisincrease the endof 2018, up44% from the to beapproximately 5.2millionat points worldwide was estimated The number of electricitycharging transport accountingfor far less. of withpublic thisglobalmarket, accounts for thelargest share The private transport segment for EVsalesisestimated at22.3%. the compoundannual growth rate for 2.1% of theautomotive industry, billion). Althoughonlyaccounting valued at~R1.6 trillion(USD 118.9 2019/20, theglobalEVmarket was According to GlobalEVOutlook enabling policy environments. commitment to developing well astherespective governments’ manufacturers andconsumers, as and non-financialincentives for global markets, driven by financial Europe andtheUSare alsoleading • • • • for passenger vehicles, driven by: China isthelargest globalmarket networks. extensive charging infrastructure and reducing thecostof vehicles; economies of scale, thereby local manufacturing and comparable to ICEvehicles; financial), making EV cost subsidies (financialandnon- of generous incentives and have resulted intheprovision tight fuelregulations that emissions; to reducing greenhouse gas the government’s commitment 2037 (Figure). 5 exceed ICEvehicle salesaround EV passenger vehicle saleswill However, Bloomberg forecasts that thereby limitingrapid adoption. EV andICEvehicle costparity, the barriers would result indelayed Without incentives andsubsidies, • • • • • the EVmarket. Theseinclude: that couldslow down the growth of rapid growth, there are key factors Although themarket isseeing infrastructure networks. limited range andcharging supply of oilfrom OPEC; and and China,coupledwithasteady lower demandfor oilinEurope instead of increasing dueto oil pricesdecreasing further incentives; elimination of someEV China’s reduction and environment; insufficient enablingpolicy a lackof, orinadequate/ expected; battery pricesnotdecreasing as

16 ELECTRIC VEHICLES: MIR 2021 0317 ELECTRIC VEHICLES: MIR 2021 ©Green Scooter the taxi industry. case for the use of EVs in There isagrowing business (Source: Bloomberg) Figure 5:Forecast of globalEVsales 100% 40% 60% 80% 20% 0% 2015 2020 2025 Year 2030 2035 2040 EV ICE EV ICE vehicles powered through Green mobility:Electric renewable energy. ©Hiten Parmar

18 ELECTRIC VEHICLES: MIR 2021 SOUTH AFRICAN INDUSTRY OVERVIEW

The emerging EV market represents a small share of the SA automotive industry but presents substantial opportunities for businesses and investors active and/or interested in the sector. There is a strengthening business case for the use of EVs in the private security industry. ©District Watch Group 0321 ELECTRIC VEHICLES: MIR 2021 automotive market supply local content intheautomotive industry. because thebatteries are imported andnot madelocally.Thisisthereason for thelow 2 market for theassembly South Africa already hasastrong 3.1. South African context. EV market hasunfolded withinthe This sectionwilldiscuss how the exporter of vehicles. direct investment (FDI).SAisanet market andR10.8billion in foreign predominantly for theexport vehicles were assembled in2019, Approximately 600000ICE retail trade, andmaintenance. workers –includinginwholesale, semi-skilled andunskilled employing ~900000skilled, billion) in2018, withtheindustry more thanR503billion(US$35.6 sector inSouthAfrica was the revenue from theautomotive Automotive Manual (AEM), Export output in2019. According to the (GDP) and27.6% of manufacturing of theGross DomesticProduct landscape, contributing 6.4% player inthecountry’s economic The automotive sector isakey combustion engine(ICE)vehicles. future manufacturing of internal Technically, SouthAfrica currently assembles vehicles rather thanmanufacturing them,

South African 2 and later inthisreport. 2020). Thisisdetailed inTable 6 in theprevious year (NAAMSA, 2020, compared to thesametime decreased by 31%by November lockdowns. Localvehicle salesalso pandemic andsubsequent attributable to theCOVID-19 exports asof November 2020, reductionand a33% invehicle total domesticvehicle production, There hasbeena32%reduction in quarter two of 2020. African GDPshrinkby 51%in international trade, sawtheSouth lockdown, coupledwithreduced for theautomotive industry. The limiting of business activity, also of thevirus. Thisincludedthe regulations) to reduce thespread national restrictions (lockdown national government implemented increased inSouthAfrica, the When theCOVID-19 caserate (Cision, 2019). from 149intheprevious year 155 export destinations, up billion, were shippedto a record which reached arecord R178.8 of automotiveExports products, Table 3:Private transport representation inSA manufacturers (OEMs), importers, of known originalequipment Table 3provides anoverview Isuzu SouthAfrica (Pty) Ltd Toyota SouthAfrica Motors (Pty) Ltd Nissan SouthAfrica (Pty) Ltd Volkswagen Group SouthAfrica (Pty) Ltd Mercedes-Benz SALtd (Pty) Ltd Ford Motor Company of SouthernAfrica BMW SouthAfrica (Pty)Ltd (OEMs) Original equipment manufacturers South Africa. transport market segment in and distributors ineachprivate Subaru Renault SouthAfrica (Pty) Ltd Peugeot SA(Pty) Ltd Mitsubishi Motors SouthAfrica (MMSA) Mazda SouthernAfrica (Pty)Ltd (Pty) Ltd Mahindra andMahindra SouthAfrica Honda Volvo CarSouthAfrica Porsche Mini SouthAfrica Jaguar LandRover Automobiles Group) FCA SouthAfrica (Pty) Ltd (FiatChrysler Africa (EAISA)(Pty) Ltd (Maserati) European Automotive South Imports Audi (VWGroup) Importers anddistributors Figure 6:Manufacturing hubs inSouthAfrica Table 3continued... (OEMs) Original equipment manufacturers TATA Motors SouthAfrica (HMSA) HAVAL Motors SouthAfrica (Pty)Ltd KIA Motors SouthAfrica (Pty) Ltd (MOTUS Group) Hyundai Auto Ltd SouthAfrica Pty Suzuki Auto SouthAfrica Importers anddistributors manufacturing destination the EC hasbeenanattractive Western Cape(WC), KZNandGP, high commuter patterns like the the EC doesnotexperience (KZN) andGauteng (GP). Although Eastern Cape(EC), KwaZulu-Natal manufacturing hubs located inthe has three key automotive Figure 6highlightsthatSA Isuzu SouthAfrica Mercedes-Benz SALtd Africa (Pty) Ltd Volkswagen Group South OEM (Pty) Ltd Toyota SouthAfrica Motors OEM Africa (Pty) Ltd Ford Motor Company of Southern Nissan SouthAfrica (Pty)Ltd BMW (SouthAfrica (Pty)Ltd OEM companies that support them. companies thatsupport industries, aswell ascomponent industrial transport manufacturing all harbourprivate, public, and have commonalitiesinthatthey (IDZs). Allthree transport hubs Industrial Development Zones by theEastLondonandCoega because of theincentives provided KWAZULU-NATAL

EASTERN CAPE

GAUTENG Group SA and Fuso) andVolkswagen Mercedes-Benz SA(Freightliner FAW Trucks, Isuzu Truck, & bus companies Commercial vehicles and Toyota (Hino) MANTruckBell Equipment, &Bus & bus companies Commercial vehicles Southern Africa & CoachandVolvo Group Scania, Tata Trucks, VDLBus Peugeot Citroen, Powerstar SA, MAN Truck &Bus, MarcoPolo, Group, Ford, Hyundai, Iveco, JMC, EicherTrucks,Babcock, Fiat & bus companies Commercial vehicles

22 ELECTRIC VEHICLES: MIR 2021 0323 ELECTRIC VEHICLES: MIR 2021 Table 4:SouthAfrica’s market share of globalvehicle production vehicle production. 2019, standing at0.69% of global production was atitshighestin market share of globalvehicle in recent years. SouthAfrica’s share of globalvehicle production shows SouthAfrica’s percentage million vehicles. Table 4below and hasto date exported 4.7 locally produced vehicles in1995, South Africa started exporting production production vehicle of global market share South African Year 0.63% 2013 0.63% 2014 0.68% 2015 share, asshown inTable 5. each holdsless than10%market (NAAMSA). TheotherlocalOEMs Manufacturers of SouthAfrica National Association of Automobile respectively, according to the 24% and16%localmarket share produce themostvehicles, holding Locally, Toyota andVolkswagen 0.63% 2016 0.62% 2017 ©District Watch Group locally intheprivate EVs are being used 0.64% 2018 security sector. 0.69% 2019 same timelast year. of 2020 (Q2) compared to the decline inthesecondquarter The sector experienced a25% automotive sector inSouthAfrica. had adrastic impactonthe Source: NAAMSA (2020) Table 5:Vehicle production market share of thetop OEMsinSouthAfrica subsequent lockdowns have The COVID-19 pandemicand COVID-19 3.2. Top OEMsinSouthAfrica Other BMW SA Isuzu Motors SA Mercedes BenzSA Renault Hyundai SA Nissan Ford Motor Coof SA Volkswagen AG Toyota SA Theimpactof

Market share (2019) (%) 20 24 16 4 4 6 9 9 3 5 November 2019). vehicles were produced asof the sametimelastyear (596253 which isa32%reduction from vehicles have beenproduced, As of November 2020, 404991

Gauteng /Eastern Cape Location (province) KwaZulu-Natal Eastern Cape Eastern Cape Eastern Cape Gauteng Gauteng Gauteng Gauteng three monthsatleast. vehicle paymentrelief –for 42% of consumers asked for affected, assales slumped,and Asset finance was greatly to thesametimelastyear. have decreased by compared 33% November 2019. Vehicle exports 494 929 vehicles soldlocallyby 31% reduction compared withthe as of November 2020, whichisa vehicle salesstand 037 at343 period theprevious year. Local 2020, compared withasimilar vehicle exports asof November reductionhas beena33% intotal As illustrated inTable 6,there 2020)Source: (NAAMSA, exports, sales, andimports Table 6:Theimpactof COVID-19 onSouthAfrica’s vehicle production, sales Total local exports Total vehicle production domestic Total exports Total vehicle November 2020) 2020 YTD (by 2020 YTD(by 250 394 343 037 343 404 991 188 440 November 2019) to resume operations. automakers were permitted not besold)even when (hencevehicles could re-open dealerships were notallowed to sales. Duringthe‘hard’ lockdown, andare heavilyreliant on debt, intensive businesses withalotof pandemic. Theseare very asset- were alsoaffected by the South Africa’s cardealerships the COVID-19 pandemic. due to theeconomicimpactsof not have much disposableincome acquisition, butmostpeopledo Africans, theirsecond-biggest Buying acaris, for mostSouth 2019 YTD (by YTD(by 2019 494 929 596 253 373 532 272 208 272 % Change -30.69 -32.08 -30.77 -32.97 vehicle sales andownership. the provinces withthehighest Natal, andtheWestern Capeare road networks. Gauteng, KwaZulu- million vehicles onSouthAfrica’s There are currently more than12 and travel patterns 3.3.1. Commuter behaviour market demandinSA. role inshapingtheautomotive preference, allplayanimportant patterns, aswell asconsumer Commuter behaviourandtravel demand automotive market SouthAfrican3.3. South Africa. vehicle export market share from centres like Thailandto take global as Morocco andmore established the way for upcomingrivals such their business elsewhere –opening international customers maytake to deliver theirproducts, their manufacturersparts are unable sector. Ifthelocalvehicle and difficult year for theautomotive while better, isalsogoingto bea NAAMSA anticipates that2021, markets (seeSection2). grown inthe three leadingglobal similarities to how EVuptake has transport aswell. Thisbears growth willlikely beledby private indicates thattheEVsales private transport modalshare continue. Theconsistently high of modalshare isexpected to modal share of 62.1%. Thispattern Private transport holdsadominant and study from homeinstead. more peoplewere required to work the Covid-19 lockdown periodas trend hasbeendisrupted during the secondarydriver. However, this withwork tripsbeing time inSA, reason for increased commute education was thedominant in 2013. Thesurvey revealed that Travel Survey (NHTS) conducted from theNationalHousehold Africa, basedondata obtained commuter travel patterns inSouth Figure 7(NHTS 2013) shows in theseprovinces. based onhigherpurchasing power as theincumbentvehicle market, in asimilargeographic pattern Uptake for EVs isexpected to grow

24 ELECTRIC VEHICLES: MIR 2021 0325 ELECTRIC VEHICLES: MIR 2021 for thehighestpercentage Education tripsaccount ©District Watch Group indicated by triptype. of travel patterns

the expense of trains and buses. increasing theirmarket share at transport users, marginally mode of choicefor public taxis have beenthedominant marginally since1995.Minibus the total market hasincreased The publictransport share of Source: NationalHousehold Travel Survey (NHTS, 2013) travel tripsby triptype Figure 7: Commuter travel patterns indicated by thenumber of annual 50+45+5+L to increase. causing thetotal number of trips also travelling more than before, to increase. Cityresidents are Africa’s populationcontinues notingthatSouth It isalsoworth 50% 45% 5% BUSINESS TRIPS WORK TRIPS EDUCATION TRIPS Source: NationalHousehold Travel Survey (NHTS, 2013) Figure 8:Modalsplitof work travel inSouthAfrica by province 42% 52% 64% 71% 67% 73% 79% 77% 20% 14% 12% 30% 11% 37% 34% 33% 23% 21% 17% 16% 6% 2003 2003 2003 2003 2013 2013 2013 2013 WC NC NW EC FS GP LP MP KZN 2013 2003 2013 2003 2013 2003 2013 2003 2013 2003 6% 5% 4% 4% 17% 20% 9% TAXI BUS TRAIN 14% 15% 26% 37% 37% 49% 52% 87% 83% 80% 81% 79% 69% 63% 63% 51% 51% 48% 83%

26 ELECTRIC VEHICLES: MIR 2021 0327 ELECTRIC VEHICLES: MIR 2021 increased in almostallprovinces. Bus usage hasmarginally ©City of CapeTown • • the caseof publictransport: decade). Thefigure shows thatin Survey was conducted (once every the lastNationalHousehold Travel and 2013 (NHTS 2013) —theyear transport for work tripsin2003 commuters have used public shows isacomparisonof how Figure 8,ontheprevious page, commuters; and and travel efficiency for many improved reliability, scheduling, dedicated lanesandhave transit (BRT) systems thathave the introduction of bus rapid increased substantially with this number would alsohave increased inalmostallprovinces; bus and theWestern Cape; provinces except for Gauteng mode; thishasincreased inall minibus taxis are thedominating usage hasalsomarginally until 2013. from theseearlyfoundations Table 7details thedevelopments the first oilcrisishittingSA. the early1970s asaresponse to market inSAdate asfar backas The earlyfoundations of theEV EV industry development of SA’s 3.4. Anoverview of the • in use. reasons for thislimited increase are someof thefactors cited as Reliability, safety, andtravel time increase between 2003 and2013. one thathasseenthesmallest are theleastused optionand cost-effective modeof travel, trains, despite beingthemost 1970s The The Africa: 1970s to 2020 development inSouth of theEVmarket Table 7: Thehistory June 2002. Eskom programme halted in A decrease inoilpricessawthe combat vehicle. developed ahybrid electric programme whenDenel It was alsoduringtheEskom • • • These include: and various vehicles were piloted. Eskom took over theresearch, to lookatalternatives. In1992, prices, theNEC was formed Triggered yet againby highoil Kruger NationalPark. an electricgameviewer inthe a utilityvehicle two VWshuttle buses and LIBtechnologies. the development of theZEBRA alternative to oil.Thisledto that highlighted EVs asan (CSIR) conducted research and Industrial Research and theCouncilfor Scientific and Energy Affairs (DMEA) of Mineralthe Department In response to thefirst oilcrisis, - 2002 1988

- 2012 2004 economic meritorsustainability. failed to demonstrate any commercialisation. Theventure The carneededR9 billionfor approximately R300million. combined investment of Corporation (IDC), witha the Industrial Development and Technology (DST) and ofof Science theDepartment the Sovereign Innovation Fund This was fundedjointlyfrom family car.a local,all-electric started developing theJoule– in CapeTown, andhisteam company OptimalEnergy based Kobus Meiring,CEO of theSA manufacturers produce a years, onthecondition that back ininvestment over three incentive was a35% cash- to locally produce EVs. The for vehicle manufacturers the dtic,itproposes incentives EV industry roadmap. Ledby as lithium-ionbatteries. theEVindustry,support such technologies thatwill primarily commercialisation of key tracks thedevelopment and Energy’s assets. uYilofast- is thecustodian of Optimal Innovation Agency (TIA)in2013, initiated by theTechnology Innovation Programme, The uYiloeMobilityTechnology

- 2017 2013 African market EV was introduced intheSouth industry inSA.TheNissan Leaf commercialisation of theEV the development and councils to accelerate companies, andscience manufacturers, technology academia, equipment environment for entrepreneurs, to create acollaborative March 2013. Itwas intended Innovation Programme in Electric Vehicle Technology TIA launchedtheNational subsidy ispending. incentive. Thestatus of this annually to qualify for the minimum of 5000volumes

2018 system inCapeTown. Integrated Rapid Transit (IRT) from BYD, for theMyCiTi of 11electricbuses, procured implemented pilot ane-bus The Cityof CapeTown - 2020 - 2019 in Table 8. these are detailed market. Someof the SouthAfrican plansfor e-mobility ground-breaking chance announced throughout thevalue service providers OEMs and

28 ELECTRIC VEHICLES: MIR 2021 0329 ELECTRIC VEHICLES: MIR 2021 Table 8:Recent EVdevelopments andnear-future plansby EVsector role players inSouthAfrica throughout thevalue chain,have announcedplansfor new developments inthenext few months.Table 8 below summarises someof theseexciting plans. With thedevelopment andanticipated growth of theEVindustry inSouthAfrica, industry players, includingtheOEMsandvehicle serviceproviders Shell SA SA Volkswagen Benz SA Mercedes Daimler/ BMW SA Toyota SA player Key role Recent EVdevelopments plans andnear-future Launching the first EVcharging stations intheir retail network in 2020. • Thenewly announcedID.4electric SUVwillalsobeavailable for saleinSouthAfrica in2022. • Thethird andlastphasewillseethe first fullyelectric Volkswagen EVs available for sale to customers inSouth Africa from 2022. • Thesecondphasewillbeexpanded to includeafleet of fullyelectric Volkswagen ID.3 vehicles from 2021. • SixEVmodelsto betested by motoring andlifestyle media. • LaunchinganelectricVWGolfpilotinGauteng inlate 2020. • Daimlerwillbringelectrictrucks to theSouthAfrican market whenthelocalinfrastructure canaccommodate thenew technology. Daimleranticipates this • Mercedes EQC battery EVto belaunchedinSouthAfrica in2021. • Unveiled SouthAfrican-made C-Class plug-in hybrid EV. Thevehicle will beproduced attheDaimlerfacility inEastLondon • Already offers two plug-inhybrid modelsinSouthAfrica. Electric • TheBMWGroup isalsoworking onanew fifth-generation Vehicle (EV)drivetrain duein 2021 thatdoesnot require any rare andplans earths to double DC fast charger. Whenpluggedinto itwilltake anormalwall box, less than11hours to charge from 0to 100%capacity. that issufficient to accelerate from 0-100km/h inless thanfive seconds.Thebattery couldbecharged from 10%–80%inunder40minutes whenpluggedinto a 100kWh high-voltage battery allowing for arange of more than600kmbetween charges –powered by two electricmotors producing acombinedoutputof 370kW The BMWbattery-powered iXcrossover Activity –iXSport Vehicle, hasbeenannouncedto arrive intheSouthAfrican market Thevehicle willhave in2022. a electricdrivetrain,• BMWisworking onanew fifth-generation duein 2021, thatdoesnot require any rare metals, earth andplans to doubletheenergy density of • LaunchinganelectricMiniCooperinJanuary 2021. TheMiniSEwillbethemostaffordable battery electricvehicle withpricing (BEV)inthelocalmarket, • Asof 2019, 36%of Lexus vehicles soldinSouthAfrica were hybrids. • Toyota SAwillproduce theall-new hybrid Toyota Corolla Cross SUV- utilityvehicle sport later in2021, whichwillbesoldlocallyandexported to 43countries • Producing Toyota’s first hybrid vehicle in 2021 atthe Automotive Supplier ParkKZNSEZ(Special Economic Zone). happening withinthenext five years. for sustainable lithiumfrom mines inAustralia, andacontract withtheManagemGroup for cobaltfrom Morocco. the energy densityof itsbattery cellsfor increased range. Thegroup hasalsotaken control of itsraw material supply, signingasupply contract withGanfeng its battery cellsfor anincreased range. starting atR642 000, moving upto 000for model.Itwillbeavailable thetop-spec R722 for saleinSouthAfrica from thefirst quarter of 2021. these atToyota’s Prospection plantinDurban,and1000thewidersupply chain. in Africa. ThisR4.28-billion investment isprojected to generate inadditionalcomponentpurchases andcreate aboutR2.85bn 1500new jobs–about500of Table 8continued... Volvo Nissan SA Scania SA Gautrain player Key role and Bolt Uber, Lyft, Construction mining trucks Electric Ford SA cell factory Hydrogen fuel pilot in2020 electric bus cell fuel Hydrogen

Recent EVdevelopments plans andnear-future company iscommitted to havingclimate positive operations e-scooter by theendof 2020. Bolt announced thatalltheirridesinEurope are now carbon-neutral (through carbon offsetting) and they planthesamefor theirothermarkets globally. The alsoannounceditwould committo electrifying 100%of• Lyft itslargest privately owned fleet by 2030. • Uberwants 100%of theirridesto take placeinEVs by 2030 intheUS, Canada,and Europe, andby 2040 for therest of theworld. Ubercommitsto becominga well asto prepare for changinglegislationregarding emissions. The demandfor lithium-ion powered isincreasing locally, forklifts owing to companieswanting to reap thebenefits of energy efficiency andcost-effectiveness, as runs are scheduledto take placelater in2020 atAnglo-American’s Mogalakwena open-pitplatinum mineinLimpopo. withdesignassistanceAnglo-American, from WilliamsAdvanced Engineering, willbuildtheworld’s largest hydrogen-powered hybrid miningtruckin2020. Test • Ford SAannounceditissetto invest $1.05 Billion(R15billion)inSouthAfrica’s Automotive Industry andlocallyproduce anew Ford Ranger pickup truckstarting • Building oneof theworld largest inTshwane solarcarports (31000solarpanels=4200 parkingbays) Tradeport SpecialEconomicZone. CHEM ENERGY, asubsidiary of Taiwanese conglomerate CHEMCorporation, hasopenedits$200 millionfuelcellproduction factory inKwaZulu-Natal attheDube Innovation (DSI). theCouncilfordepartments, ScientificandIndustrial Research (CSIR), andHydrogen South Africa (HySA), whichisaninitiative of Scienceand of theDepartment South Africa’s first homegrown hydrogen fuelcellelectricbus to bepiloted later in 2020. Thebus hasbeendeveloped by severalBusmark, universities, government years. Thecompany plansto exclusively onlyproduce electricvehicles from 2030 (nohybrids either). to-100 km/hin4.9 seconds.Volvo SouthAfrica isrolling outanetwork of charging stations atitsdealerships andwilllaunch4additionalmodelsover thenext 5 from 0%to 80%in40minutes using aDCfast charger. Thetwinelectricmotors deliver 304kW(408 hp) of power and660Nmof torque allowing itto gofrom zero- Volvo issetto launchitsfirst EV intheSouth the African market, Volvo XC40 Recharge, in 2021. The vehicle willhave a range of over 400kmandcanbecharged The new 40kWhNissan Leafand62kWhNissan Leafe+to belaunchedin2020/1. Thohoyandou auto-workshop. ThisisinlinewithScania’s globalgoalto towards drive theshift asustainable transport system for business andsociety. Scania SouthAfrica haspartnered withthe LimpopoEconomicDevelopment Agency (LEDA) andtheThulamela municipality to develop theR15-millionScania buses witharange of 270 kmsinceGautrain buses runanaverage of 200 kmperday. The Gautrain network willincludeelectricbuses powered TheGautrain by ManagementAgency’s micro-grids. (GMA) Urban MobilityProgramme isconsidering ‘zero-emission platform’‘zero-emission by 2040, withallridestaking vehicles, placeinzero-emission onpublictransport orviamicro-mobility. capacity by 20% to 200 000unitsandcreate direct about1,200 jobs. bothfor domesticsalesandexports. Thecompanyin 2022, willalsoupgrade theSilverton plantinPretoria, to boostthesite’s annual vehicle production

30 ELECTRIC VEHICLES: MIR 2021 0331 ELECTRIC VEHICLES: MIR 2021 Table 8continued... Zone (TASEZ) Economic Special Automotive Tshwane scooters mobility – micro- Electric player Key role Motors (GM) General Town City of Cape SA ABSA Bank batteries Lithium-ion Metrobus Bus Services Golden Arrow

Recent EVdevelopments plans andnear-future neutral by 2040 andwillalsosource 100%renewable energy to power itsUSsites by 2030, andglobalsites by 2035. GM aimsto fullyembrace EVs andsellallitsnew cars, SUVs, andlightpickup trucks, withzero exhaust emissions by 2035. Thecompany plansto becomecarbon electricity grid. with theaimof promoting theuptake of EVs andcollectdetailed data oncharger usage andcustomer experience, to assess theimpactof EVcharging onthe The United NationsIndustrial Development Organization (UNIDO) donated thesesystems of UNIDO’s as part Low-Carbon Transport SouthAfrica (LCT-SA) Project The CCT haslaunchedtwo publicEVcharging stations withassociated solarPVsystems carport installed attheBellvilleandSomerset West CivicCentre sites. green financedealcouldstilldeliver alower total cost of ownership compared withanICE vehicle. consumers thatcouldincorporate asolarPVhomeinstallation for charging theEV. ThesolarPVhomeinstallation would increase upfront costs, butthecombined Absa announcedinOctober 2020 thatthey would soon berolling outagreen financemechanism for EVs. They intend to provide financepackage anall-in-one to • TheMegamillionEnergy Company intends to beAfrica’s first producer large-scale of lithium-ionbatteries by launchingapilotGigafactory inlate 2020. • Metair with theSouthAfrican willpartner Institute for Advanced Materials Chemistry(SAIAMC), located attheUniversity of theWestern Cape(UWC) —ithouses • Geologicalexploration work willsoonrestart attheZebediela nickel project limbof theBushveld onthenorthern Complex inLimpopo, SouthAfrica. The Johannesburg’s Metrobus hascommitted to onlypurchasing electricbuses from 2030 onwards. of itsongoingsustainability Multimech,aspart engineering complex, andcarbonfootprint reduction initiatives. GABS haskicked off itselectricbus pilotproject (e-bus pilot)andisgoinggreen withseveral initiatives includingtheinstallation atitscentral of asolarcarport an anticipated investment of over R4.3billionintheeconomy. Another10have shown akeen interest. expressions of interest were received from ninesupplier companies.Asof August 2020, 12suppliers have committed to settingupoperations withintheSEZwith Work hasbegunontheR3.4 billionTshwane Automotive SpecialEconomicZone (TASEZ) —thefirst automotive cityin Africa. Whenannouncedin 2019, Several localelectricscooter companieshave launchedin2020, includingElectricLife Rides andGoLectric. storage applications, andsolarpanelrecharge technology. production project from January 2021. Production willfocus onminingcaplampcells, 12Vli-ionautomotive batteries, 48Vlithium-ionbatteries for energy the onlypilotscaleli-ionbattery cellassembly facility inAfrica —whichwillseethecompany invest R3millionover three years to pilotaprototype lithium lithium-ion batteries, whilstClass 2 nickel ismainlyused innickel pigiron andthesteel industry.) Bushveld Complex hostsanestimated 11.9 milliontons of nickel andranks third interms of nickel sulphide content globally.(Class 1nickel for issoughtafter EV companies (seeFigure 9 ). currently from thebattery with verymarket, limited activity the mostactive investors in the infrastructure companies are manufacturers andcharging Notwithstanding, car tipping pointsare unknown. emerging, andthetimingof key dynamics of theindustry are still African EVmarket. Theexact competing to shapetheSouth A variety of key players are EV value chain 3.5. TheSouthAfrican Table 8continued... MellowVan Vehicles (ESV) Electric Safari player Key role Recent EVdevelopments plans andnear-future its own battery managementsystem, andthegovernment’s Industrial Development Corporation isoneof themajorshareholders inthebusiness. delivery service. Thecompany’s lithium-ionbattery cellsare imported from Asia,then assembled attheirWestern Capeplant.Thecompany hasalsodeveloped MellowVans hasconducted several projects inSouthAfrica, proof-of-concept withretailers large-scale such asDHL,Takealot, andCheckers, for theirlast-mile better efficiency andprovide a smoother and quieter game-viewing experience for theirclientsand tourists. propulsion. Thevehicle conversions have helpedthecompany aswell reduce asthe maintenance theiremissions costs sincetheEVs andcarbonfootprint, have Mpumalanga-based ElectricVehicle company, ElectricSafari Vehicles (ESV), isconverting theirnature andwildlife-viewing vehicles from dieselto electric concept projects inSA. large-scale proof-of- large-scale conduscted several MellowVan has ©Mellowcabs

32 ELECTRIC VEHICLES: MIR 2021 0333 ELECTRIC VEHICLES: MIR 2021 Lithium IonBattery (source: GreenCape Analysis) Figure 9:EVvalue chaininSA Electric Vehicles infrastructure Charging Graphite Cobalt Li Tier 1,2&3suppliers Parts &components Parts parts &components parts Basic materials, Raw materials Manganese Al, Cu,Fe Nickel CaF Ti 2 Current collectors Manufacturing & Auto assemblers Manufacturing & assembly Cell casings Processing Electrolyte Cathode tooling Anode OEM OES Funding (publicandprivate) Transport &logistics Battery packinputs Retail andbilling Parts &services Parts distribution & Marketing, dealership Cooling Packs Retail BMS I &F Ability exists Replacement parts Second handsales & accessories Independent aftermarket in SA Retail O&M

Bottleneck in SA second life Battery

supply inSA Limited Energy sector Sustainable recycling Battery ©BMW SouthAfrica The BMWi3.

34 ELECTRIC VEHICLES: MIR 2021 0335 ELECTRIC VEHICLES: MIR 2021 Source: (GreenCape, 2019) Figure 10:Illustration of gainsandlosses intheICEvalue chaindueto EVuptake Africa’s transition towards electric there are valid reasons for South simpler withfewer Although parts. 1 000moving EVs parts, are much ICE vehicles thathave more than traditional ICEvalue chain.Unlike there willbeanimpactonthe manufacturing isestablished, As theEVmarket grows andlocal Negative Impact Engine parts Radiators Clutch losses thatmaybeexperienced. potential to offset some of the astheymore holdthe important, by themove to electricmobility realise opportunities presented below. Thismakes theneedto the value chainasoutlined potential gainsandlosses through mobility, itwillnotoccurwithout Gears Impact onmajorauto components Shock absorbers Steering systems Brake lining Neutral impact: Fuel stations Neutral impact: Seats and economy on theICEvalue chain of EVmarket growth 3.6. ICE value chain. likely to seegainsand losses inthe Figure 10shows where we are Headlights Leaf springs Potential impacts Controllers Inverters Microprocessors Electric motors Wiring harnesses Positive Impact the nascenceof themarket. unquantifiable atthisstage due to gains andlosses are, however, the value chain.Expected job effort towards upskillingacross losses, shouldthere bea concerted market willresult inminimal job SA’s involvement inthelocalEV Batteries Figure 11:Petrol anddieselconsumption from 2007 to 2018 Source: 2020) (DOE, over time. a significantimpactonthefiscus structure, EVuptake would have mobility. Under thecurrent fuellevy silent onelectricityasafuelfor and biodiesel,withthepolicy fuel tax islevied onpetrol, diesel, revenue stream. a At present, and mostefficiently collected are thegovernment’s biggest fourth impact isonfuellevies. Fuel levies Where there willbeanotable Volume (KL) 10 000 14 000 16 000 12 000 4 000 6 000 8 000 2 000 0 PETROL 2007 DIESEL 2008 for expansion. scope, itoffers much potential and withitscurrent limited tax regime. Initscurrent form expansion of the current carbon includingthepotentialbe offset, in whichthisrevenue loss can However, there are various ways 2009 2010 2011 2012 non-energy uses).non-energy in thechemicalssector (for per year, withadditionaloilused ~26 billionlitres of liquid fuels African transport sector consumes of Energy (DOE), theSouth According to theDepartment and Government revenue imports, thebalanceof trade, 3.6.1. Theeffect of EVs onoil 2013 2014 2015 (DOE 2020). petrol anddieselconsumption is anillustration of SouthAfrica’s and natural gas.Figure 11below per year produced from coal an additionaleightbillionlitres through with crudeoilimports, consumption, 60%ismet Of SouthAfrica’s liquid fuels 2016 2017 2018

36 ELECTRIC VEHICLES: MIR 2021 0337 ELECTRIC VEHICLES: MIR 2021

Rands 000 Source: Road Accident Fund Fuel levyFigure 12: collected inSouthAfrica between 2008 and2020 Fuel in2018,Fund theRAF (RAF) According to theRoad Accident on allliquid fuelsconsumed. fuellevypay apre-determined South African consumers also African economy. of trade savingfor theSouth (US$580 millionperyear) balance representing apotential R8.1 billion reduction of more than 6%, per annum). Itisanoilimport of oilby 58PJ/a (Petajoules collectively reduce theimportation 20 000kmperannum, itwould one millionEVs thatalldrive If SouthAfrica were to introduce 40 000 60 000 90 000 30 000 80 000 50 000 20 000 70 000 10 000

2008/09 0

2009/10

2010/11

2011/12

2012/13

2013/14 this revenue stream atrisk. increased EVuptake couldput liquid fuelsalesonthebackof in Figure 12below. Falling yearly fuellevy incomeisshown efficient revenue stream. The represents animportant and government, thefuellevy However, for thenational to electricvehicles. improving thecasefor switching respectively (RAF, 2020), further R0.30 perlitre for petrol anddiesel increased in2019 by R0.29 and fuel priceatthepump. Thelevy Levy represented 12%of thetotal

2014/15

2015/16

2016/17

2017/18

2018/19

2019/20 and fewer oilimports Table 9:Benefits anddrawbacks to South Africa of EVmarket growth growing EVmarket consideringthepotential impactonthefuellevy. Table 9summarises themacroeconomic benefits anddrawbacks of a population in SouthAfrica broken Table 10 shows thelive vehicle market 3.7.1. TheEVpassenger vehicle dynamics 3.7. • Jobcreation opportunities across • Better pricecontrol onelectricity • Mitigatingagainsttheeconomic • Increased energy security • Decreased expenditure onoil • Thecountryhasanincreased ability Benefits value chain a potential localEVmanufacturing than oil vehicles ICE demandby importers of SAICE posed by plannedreductions in risk for theSAautomotive sector imports to meetemission reduction targets Market sizingand Disadvantages • There isahighlikelihood of areduction • Balanceof trade savingonthebackof less than1%asof 2020. vehicle class currently stands at The EVpenetration rate ineach statistic ontheeNaTISdatabase. – whichisthelatest published of vehicle for September 2020 down by province andtheclass Fund (RAF) in contributionsto theRoad Accident generated through thefuellevy is notproportional to therevenue reducing spendingonoilimportation Table 10:Overview of SouthAfrica’s conventional ICEvehicle September market: 2020 Provincial %of total Total number vehicles All otherandunknown Total provincial %of total Total trailers GVM >3500kg Heavy loadtrailers GVM <=3500kg Light loadtrailers Caravans Provincial %of total Total self-propelled vehicles Other self-propelled vehicles GVM >3500kg) Trucks (Heavyloadvehicles load veh’s GVM <=3500kg LDV’s, panelvans, otherlight tricycles Motorcycles, quadrucycles, Buses, bus trains, midibuses Minibuses station wagons Motor cars and Vehicle Class

38,46% 4 889860 4 486 36,82% 439 912 65 254 764 337 36 894 38,69% 4 445462 35 984 140 166 853 389 140 143 20 468 129 813 3 125499 GP 13,35% 1 697 022 2 822 9,49% 113 333 24 514 82 006 6 813 13,76% 1 580867 31 635 50 283 373 990 30 117 8 326 57 688 1 028828 KZ 16,15% 2 052696 4 313 16,28% 194 512 24 597 151 514 18 401 16,14% 1 853871 39 993 46 331 309 340 85 126 7 160 37 450 1 297 502 WC 6,68% 849 235 3 015 5,95% 71 046 7 438 58 525 5 083 6,75% 775 174 16 845 22 563 210 074 21 300 4 654 25 620 474 118 EC Province 5,02% 638 384 3 695 7,54% 90 036 19 745 63 131 7 160 4,74% 544 653 395 34 22 518 018 133 17 914 3 405 12 979 320 424 FS 7,21% 916 152 3 543 9,68% 115 626 39 536 66 328 9 762 6,94% 796 983 27 125 44 246 226 723 17 458 8 315 25 779 447 337 (Source: eNaTIS.2020) MP 5,02% 638 794 4 089 5,97% 71 345 11 108 54 159 6 078 4,90% 563 360 797 20 17 286 157 534 12 522 4 099 20 557 565 330 NW 5,86% 744 793 2 301 5,06% 60 496 10 999 44 033 5 464 5,94% 681 996 17 369 26 955 241 692 767 8 7 010 25 918 354 285 L 2,26% 287 125 1 354 3,22% 38 512 5 894 920 29 2 698 2,15% 247 259 9 497 9 055 81 646 7 556 1 809 5 957 131 739 NC 100,00% 12 714061 29 618 100,00% 1 194818 209 085 887 380 98 353 100,00% 11 489625 640 233 379 403 2 618375 903 340 65 246 341 761 7 510297 Total – 17,50% 74,27% 8,23% vehicles total tow % of 2,03% 3,30% 22,79% 2,97% 0,57% 2,97% 65,37% propelled self- % of total

38 ELECTRIC VEHICLES: MIR 2021 0339 ELECTRIC VEHICLES: MIR 2021 Source: (TIPS, 2020) Figure 13:ICEandEVPassenger carsalesinSouthAfrica since2010 This isillustrated inFigure 13below. The EVmarket remains minuscule compared to ICEvehicle sales. 400 000 300 000 450 000 200 000 350 000 250 000 100 000 150 000 50 000 Diesel Petrol PHEV HEV BEV HEV- HYBRID EV 0 LEGEND: HEV- HYBRID EV; BEV – BATTERY EV; PHEV – PLUG-IN HYBRID EV 289 911 48 598 2010 430 – – BEV – BATTERY EV 343 489 343 56 317 2011 627 – – 373 022 68 260 2012 766 – – PHEV – PLUG-IN HYBRID EV 370 392 79 357 2013 513 34 – 360 122 78 155 2014 646 14 – 340 982 340 70 908 2015 266 124 117 297 019 63 765 2016 100 168 213 302 227 65 516 2017 182 121 68 302 440 62 605 2018 89 58 55 299 408 55 563 2019 154 181 72 transport electrification. the potential market for public the country.Thisrepresents total self-propelled vehicles in representingin SA, 3.54% of the 407 007 publictransport vehicles Africa. Thisaddsupto atotal of minibuses andbus trains inSouth 761 minibuses, and65246 buses, of September 2020, there are 341 As shown inTable 10above, as details onthisopportunity). in SouthAfrica (SeeSection5for electrification of transportation a goodbusiness casefor the the minibus taxi industry present (BRT), localmunicipal buses, and The bus industry, bus rapid transit the oneseeninpassenger vehicles. will soonfollow asimilartrend to It isexpected thatpublictransport EV market 3.7.2. Thepublicandindustrial precedence over electrification. need, andisexpected to take freight to rail isamore immediate vehicles are concerned, thepush for improvements. Where heavy-duty on ‘fit for purpose’ technology is alsoexpected to improve based marketElectrification of the forklift charging infrastructure investment. between ICEvehicles andEVs, and significant capital price difference isfinancing for the at present, as isthecasewithallEVs inSA The challengeinthismarket, • • • driven by: This potential business caseis technology. bus/minibus fleets over ICE maintenance costs across reduced operation and charging times coincide withcurrent AC long-standing/idle times that where peopletravel) peak travel patterns (when and kg inCO has saved theequivalent of 15100 engine. To date, thecurrent fleet without aninternal combustion constructionmachinery powerful shown itispossible to make fully electricdiggerthathas the world’s first volume-produced The 19C-1E excavator intheUKis public transport isincreasing. interest intheelectrification of and within theindustrial segment, three-wheeled EVs gaintraction year-on-year. and Forklifts andtwo- vehicles continue to bepurchased a diversified EVmixaspassenger SA’s nascentEVmarket andexpect vehicle manufacturers seevalue in Despite thebarriers, automotive Covid-19 lockdown periods. duringthe demand, particularly experiencing asurge inmarket Last-mile delivery LDV issimilarly companies have launchedin2020. several localelectricscooter year. As outlinedinTable past 8, witnessing highgrowth over the electric scooters (e-scooter) are Electric micromobility such as hours of work. 2 emissions across 5616 stations inthecountry. incoming charging infrastructure charge. Figure 14 shows active and take upto sixhours to arrive atfull largely AC charging stations that are found inGauteng. They are Many of these charging stations charging stations. they thenbecomehybrid fuel/ modified to integrate EVcharging; network thatcouldpotentially be Africa alsohasavast fuelstation ahead of thedemand.South the charging infrastructure is for four EVs inthe country.Thus is onepubliccharging station stations. Thismeans thatthere ~250 publiclyaccessible charging the network currently consistsof of theEVmarket. InSouthAfrica, key to theadoptionandgrowth commuters caneasilyaccess is charging stations inlocationsthat It iswidelyaccepted thathaving and network 3.7.3. Charging infrastructure

40 ELECTRIC VEHICLES: MIR 2021 0341 ELECTRIC VEHICLES: MIR 2021 (PlugShare, 2020) Figure 14:Active andincomingcharging infrastructure stations inSA PUBLIC CHARGING STATION ACCESS OR ARE UNDER MAINTENANCE STATIONS THAT HAVE RESTRICTED Figure 15:Projected uptake of EVs inCapeTown EVs inCapeTown. a gradual increase intheuptake of study doneby theCSIRprojected uncoordinated. For instance, a2015 especially ifthecharging is energy ontheelectricitygrid, would create extra demandfor Battery electricvehicles (BEVs) Number of light passenger vehicles Source: (CSIR, 2015) 3 000 2 000 2 500000 1 000 1 500000 500 000 0 2012 ELECTRIC VEHICLES 2020 2025 2030 Figure 16(CSIR, 2015). Cape Town by 2050, asshown in energy consumption intheCityof lead to an11%increase inthetotal this projected uptake inEVs would Figure 15.Thestudy found that in CapeTown, asillustrated in for almosthalfof allvehicles EVs are projected to account According to thestudy, by 2050 ICE VEHICLES 2035 2040 2045 2050 40 000 60 000 30 000 50 000 0 within +-200Km of eachother. roads have charge pointsspaced major highways andnational both grown significantly.Major infrastructure in SouthAfrica have coverage of EVcharging station previous page, thenumber and As illustrated inFigure onthe 15 2015)(Source: CSIR, Figure 16:Projected increase inenergy consumption inCapeTown TOTAL CCT ELEC USE WITH EVS [GWH/YR]

Energy [MWh/yr] 40 000 60 000 30 000 50 000 20 000 10 000 0 2012 within an~20 kilometre radius. able to locate acharge point Durban, EVdrivers shouldbe Cape Town, Johannesburg, and In themetropolitan citiesof TOTAL CCT ELEC USE [GWH/YR] 2020 2025 2030 2035 2040 2045 2050 11%

42 ELECTRIC VEHICLES: MIR 2021 0343 ELECTRIC VEHICLES: MIR 2021 EV Charging Information • • • • • Commercial Non-commercial

Non-residential Residential Others Public parking On-road stations market EV charging by end-user Plug-in charging station • • • Wireless charging station

standard outlet. be pluggedinto a – 120V AC plugandcan Level 1charging station — DCfast chargers Level 3charging station into astandard wall outlet. they cannotbeplugged unlike Level 1chargers, (for commercial) plug,and residential) or208V AC station —240V AC (for Level 2charging stations market EV charging by type charging (DC) rapid, andultra-rapidFast, charging Opportunity (and depot) Conventional charging (AC) EV charging types serve theadded on-peakdemand. identified congestionpoints, to storage downstream from the embedded generation, and resources (DERs), including installing distributed energy might needto beadopted by distributed storage technology To supplement this, gridand smart in SouthAfrica. EV uptake inthenext few years, limited projections of thepaceof into gridswiththeuncertainty and utility services, andtheinvestment transmission capacity;for the generation, distribution,and difficult to plan for such additional The mainchallengeisthatit drawn from renewable sources. especially iftheenergy isto be ready for thisadditionaldemand, interventions are neededto be Therefore, specialplanningand electricity system. which couldcreate astrain onthe even duringpeakdemandperiods, need to charge duringthedayand However, publictransport would vehicles are oftennotbeingused. the weekends, whenpassenger typically occurs atnightandduring Most EVcharging inothercountries explores DERsingreat detail. Market Intelligence Report GreenCape’s 2021 Energy Services the electricitydemandprofile. demand andlowering peaks in added benefit of smoothening demand islow, whichhasthe then berecharged atnightwhen This distributed storage can shown inTable 11. by automotive companiesinSAis the charging standards employed the latter. Abroader breakdown of Nissan using theformer andBMW Charging System (CCS), with MOve (CHAdeMO) andCombined on theconnector type:CHArge de The charging market issegmented China’s GB/Tsystem. charging system globally, after second mostpopularDCfast- mark. Thismakes CHAdeMO the standard crossed theonemillion international CHAdeMO charging that are equipped withthe 2020, thenumber of EVs sold Globally, however, asof October standard manufactured EVs. available CHAdeMO charging does notyet have any locally vehicles (uYilo, 2020). SouthAfrica andcapable CHAdeMO-equipped around theworld producing countries with20 EVmanufacturers technology. Itisavailable in90 are fitted withtheCHAdeMO A third of allEVs soldinEurope ©Jaguar South Africa charging station. Jaguar i-Paceat

44 ELECTRIC VEHICLES: MIR 2021 0345 ELECTRIC VEHICLES: MIR 2021 Table 11:OEMs, industry, anddistributors’ DCcharging technology Volvo CarSouthAfrica Porsche Mini SouthAfrica Jaguar LandRover Automobiles Group) FCA SouthAfrica (Pty) Ltd (FiatChrysler Africa (EAISA)(Pty) Ltd (Maserati) European Automotive South Imports Audi (VWGroup) Mercedes-Benz SALtd Volkswagen Group SouthAfrica (Pty) Ltd Africa (Pty) Ltd Ford Motor Company of Southern BMW (SouthAfrica (Pty) Ltd CCS charging technology Suzuki Auto SouthAfrica Subaru Renault SouthAfrica (Pty) Ltd Peugeot SA(Pty) Ltd Mitsubishi Motors SouthAfrica (MMSA) Mazda SouthernAfrica (Pty)Ltd (Pty) Ltd Mahindra andMahindra SouthAfrica Honda – – Toyota SouthAfrica Motors (Pty) Ltd Nissan SouthAfrica (Pty) Ltd CHAdeMO charging technology Original Equipment Manufacturers Importers anddistributors – – – – – – KIA Motors SouthAfrica (Pty) Ltd (MOTUS Group) Hyundai Auto Ltd SouthAfrica Pty – – – N/A CHAdeMO/CCS charging technologies – – – – – – TATA Motors SouthAfrica (HMSA) HAVAL Motors SouthAfrica (Pty)Ltd – – – Isuzu SouthAfrica TBA charging technologies than 400km. consumers lookingto travel further and alimited group ofsegment, for use inthepublictransport growth of commercial vehicles increase over time, driven by the fast chargers isalso expected to Growth for direct current (DC) stations) sectors. malls, dealerships), andfuel(filling larger extent theretail (shopping units),(multi-dwelling andto a in demandfrom theresidential qualified by thepotential increase share of themarket. Thisis are expected to holdasignificant Alternating current (AC) chargers to attract tenants. chargers atresidential properties seize theopportunity to install EV uptake of EVs, landlords could foreseeable thatwithincreasing from thegovernment. Itisalso South Africa withlimited support of charging infrastructure in now beendrivingtherollout The private sector hasupuntil transportation agencies. local governments, orroad and government, EVmanufacturers, sectors. Itcould bethenational transportation andenergy – whichintersects boththe out charging infrastructure incurring thehighcostsof rolling unclear iswhoresponsible for this isspeculative. What remains for EVs grows, butthetimingof is expected to grow asthemarket market for charging infrastructure does notyet meritinvestment. The the market isstilltoo small and see’ approach because they believe this spaceare and adoptinga‘wait highlight thatpotential investors in GreenCape’s engagements followed by majorhighways. the initialinfrastructure growth, are expected to drive much of is anoticeableuptake inEVs, Metropolitan cities, where there ©Green Cab

46 ELECTRIC VEHICLES: MIR 2021 0347 ELECTRIC VEHICLES: MIR 2021 Policy Action Plan. priority industry undertheIndustrial the economya andis classified as the largest manufacturing sector in South Africa’s automotive sector is does notadapt trade markets ifmanufacturing The potential loss of automotive 3.8.1. Macroeconomic drivers charging infrastructure 3.8. Market drivers: EVand Figure 17. over thelastdecade, asshown in Africa have increased steadily Light vehicle exports from South and 131otherdestinations. Japan, Australia, theUnited States, Union (74% of vehicles exported), were exported to theEuropean vehicles produced inSouthAfrica the COVID-19 lockdown, 64% of the complete year onrecord before (NAAMSA), in2019, whichisthelast Manufacturers of SouthAfrica Association of Automobile According to TheNational

Source: NAAMSA last decade Figure 17: Proportion of ICElightvehicles exported andimported over the 400 000 400 000 600 000 600 000 300 000 300 000 800 000 500 000 500 000 200 000 200 000 700 000 LIGHT VEHS IMPORTED LIGHT VEHS EXPORTED 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 TOTAL LIGHT VEHICLE MARKET TOTAL LIGHT VEHICLE PRODUCTION 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 top vehicle export markets Table 12:ICErestriction status for SouthAfrica’s automotive andindustrial policy. seen globallyby changingthe transitionto thee-mobility the countrytowards adapting These developments shouldsteer vehicles, asshown inTable 12 . against theimportation of ICE have recently announcedpolicies Most of thoseexport markets Other Spain Japan USA Belgium UK Germany markets SA vehicle export Percentage of SA vehicle exports 34 35 4 4 9 9 5 of thisimportant industry. markets andwitness thecollapse key vehicle andexport import SouthAfrica couldloseits If not, Several citiesandstates but nonationwideban restriction/ban restriction/ban 2030 onICEand 2035 onHybrids on ICEsales Announced Announced Varies 2040 2030 2050 2026

oil extraction to driving. demand incore export markets. satisfy thenew international towards EVmanufacturing to automotive industry nottransition losses, shouldtheSouthAfrican potential riskof trade market 2026 onwards. Thispresents a sale ICEvehicles starting from have announcedthebanof new- (GDP). Many of thesecountries national Gross DomesticProduct a marked contributionto the Africa’s export market thatmakes is asignificantenabler of South custom-free to 28countries.This and componentsto beexported agreement allows for vehicles automotive industry. TheEU SADC thatsustain thecountry’s in placewiththeEU, USand South Africa hastrade agreements 3 demand for EVs inSouthAfrica. trends, four drivers accelerate the market istracking international Although theSouthAfrican EV Localdemanddrivers3.8.2. Well-to-wheel describesallsteps alongthevalue chainor‘life cycle’ from conscious to amuch broader base. that are primarilyclimate- market from consumers willshift improve, it isexpected thatthe efficiency andaffordability of EVs become thenorm,and renewable energy narratives offer. Astheclimate changeand and environmental benefits EVs the improved sustainability purchase decisionsandvalue the costto theenvironment in customers thatcanprioritise small percentage of high-income market iscurrently driven by a during theirlifespans. SA’s EV deployment of renewable energy from benefits from increased time asthegridthey charge of greenhouse gasesover EVs emitadecreasing amount conventional ICEvehicles. Also, continue to belower thanfor emissions from EVs would greenhouse gas(GHG) projected On awell-to-wheel Climate conscious consumers 3 basis,

48 ELECTRIC VEHICLES: MIR 2021 0349 ELECTRIC VEHICLES: MIR 2021 to changesinfuelprices. consumption patterns inresponse termin theshort to change consumers have littleflexibility becomes noticeablethat As thepriceincreases, italso than withothercommodities. from oilpriceincreases more so Consumers feel theimpact vehicles for commuters. attractive alternative to ICE are highlightingEVs asan Concerns over fuelpricestability costs Rising fuel Fund levy, customs, excise levy, andtransport costs. subject to Government’s Road control Accident andincludesfueltax, United States dollar/rand exchange rate. Thedomesticfactor (~60%)is account themovement of petroleum product prices, aswell asthe ~40% of theretail isdetermined by priceof fuelinSA, taking into and international factors. The Basic Fuel Price (BFP), which constitutes and thelocalexchange rate. Thesecanbetypicallyseenasdomestic SA’s fuelpricesare heavilyinfluenced by trends intheglobaloilmarket Factors thataffect price theSAfuel (AASA, 2020).(AASA, Association of SouthAfrica as recorded by theAutomobile fuel pricesover thepastten years, Figure 18shows thevolatility in energy securitychallenges. the countryto economicand SA’s dependency onoilexposes into themarket. users andare therefore locked Most commuters are captive Figure 18:Year-on-year fuelpricesinSouthAfrica Source: Automobile Association of SouthAfrica cost more thanUS$1000/kWh. introduced in2010, thebatteries the first mass-market EVs were more than 89%since2010. When have seenbattery pricesfall by scale andtechnological advances ion batteries (LIBs). Economies of driving thedemandfor lithium- global demandfor EVs are generation market andincreasing The growth of thedistributed and pricing Energy storage innovations R10.00 R14.00 R16.00 R12.00 R0.00 R4.00 R6.00 R8.00 R2.00 ULP 93 2006 ULP 95 2008 2009 DSL 0.05%DSL 2010 2011 2012 in othersectors. to fall asdemandrisesfor LIBs are stillexpected to continue The pricesof raw materials battery electrodes) since2015. price of graphite (used inthe Figure 20 illustrates the fluctuating Figure 19,onthenext page. last three years, asillustrated in costs have alsodropped inthe US$120/kWh. Theraw material This pricenow hovers around 2013 2014 2015 2016 2017 Price in USD ($) Source: BenchmarkMinerals, 2020 Figure 20: Graphite priceover time $/kWh Figure 19:LIBprice/kWh over time 300 200 350 250 100 100 105 150 110 90 80 50 95 70 85 75 0 Jan 15 2005 2007 Dec 15 2009 launches Model S Tesla Nov 16 2011 2013 Oct 17 Year 2015 Sept 18 2017 2019 Aug 19 2021 2023 Jul 20

$/kWh 400 300 200 350 250 100 150 Nov 16 Jun 17 LITHIUM Jan 18 Aug 18 CARBONATE Mar 19 Oct 19 HYDROXIDE May 20

50 ELECTRIC VEHICLES: MIR 2021 0351 ELECTRIC VEHICLES: MIR 2021 approximately 150kmto 400km. significantly higherdriving range, have resulted inbatteries witha battery managementsystems single charge. Improvements in they cansafely travel ona ofwant thecomfort knowing private vehicles, consumers charging happensathomefor buy them.Whilemostof the for prospective buyers notto EVs isoneof thekey reasons The limited driving range of Reduced range anxiety capital pricesavings. operational costsavingsto include case for owning EVs moves from at thispointthatthebusiness parity maybeachieved). Itis kWh istherange inwhichprice the decade(~$125/kWhto $150/ with ICEvehicles by themiddleof that EVs maybecost-comparable prices, asdiscussed above, means total costof anEV. Falling battery between 40%and50%of the Currently, batteries make up Falling costof EVs • • • • view to growing theEVindustry: will have to beconsidered witha continues to develop, thefollowing As theSouthAfrican EVmarket and fueltaxes. base derived from vehicle Changes to thetax revenue automotive sector. demand for new materials inthe requirements implyabigger related battery production supply. TheEVuptake and Renewed focus onraw materials charging infrastructure. thedeploymentsupport of and conventional vehicles, and the costgapbetween electric economic measures to bridge mobility use avariety of Leading countriesinelectric Policies playacriticalrole. plants, locallyandinternationally. in assembly andmanufacturing expansion of production capacity in battery chemistry, and Key enablers are developments delivering substantial costcuts. Technology advances are aged 55+were thinkingof purchasing anEVwithinthenext three years. they were more likely to purchase anEVinthenext five years, whilethose An interesting finding was thatmost of the said respondents aged18-34 were thetoprunning costs(54.7%) three cited advantages of EVs. Reduced emissions (80.5%), reduced noisepollution(63.9%), andcheaper as thebiggestbarriers to EVownership inSouth Africa. charging times(59.6%), andcost(55%), were cited by therespondents The unavailability of public and home charging infrastructure (61%), vehicle, rather thanasasecondvehicle. of therespondents, 86%,would beopen to using an EV astheir primary have driven one, and68%would want to own oneinfuture. Themajority months hasfound that 1.8%of the respondents have owned an EV, 13% buyers onSouthAfrica’s biggestautomotive marketplace over 12 A 2020 nationalEVperception survey conducted onover 3000 car 2020 National EVPerception Survey

an EV Figure 21:How much respondents were willingto spendonpurchasing 4 Africans are brand conscious consumer brand loyalty, South According to astudy doneon Brand loyalty an EV. to spendmore thanR500000on progressively fewer peoplewilling Figure 21shows thatthere were Source: Autotrader 2020 https://www.wetpaint.co.za/wetpaint-strategic-marketing-insights-the-south-african-consumer/

ANY 1.9%

< R200K 14.8% 10.9% R250K 74% 15.9% R300K 14.3% R400K

R500K 18.1%

R600K 7.9%

R700K 4.9%

middle class This isespeciallytruefor the linked benefits. withwell-defined Any pricepremiums needto be the priceisconsidered fair. spending limits, butonlywhen tested brands. They have high and loyal. They stickto triedand R800K 4.1%

R900K 1.2%

R1 000K 3.2% 4 R1 250K 0.9% .

R1 500K 0.8%

R1 720K 0.2%

52 ELECTRIC VEHICLES: MIR 2021 0353 ELECTRIC VEHICLES: MIR 2021 5 likely to incur duties.EVsimport are alsomore comparison, ICEvehicles incur18% and trucks carrya20% duty.In 25% duties, whilebuses import Currently, EVs are subjected to duties imposedonEVs. reasons for thisisthehighimport In SouthAfrica, oneof thekey high relative to ICEvehicles. prices, thecostof EVs remains falling dueto decreasing battery Even withtheoverall costof EVs 3.9.2. duties Highimport demand for EVs. is aneedto facilitate local production to happen,there increases. For thisincreased economies of scalevolume reduce significantlywith production costof EVs would EV market. Ultimately, the have amuch lower share of the share intheICEvehicle market currently have ahighmarket somebrandsAs aresult, that being alarge amountof money. tag contributes to advalorem luxury good,whiletheirhigh price based ontheirclassification asa

An advalorem tax isatax whoseamountis basedonthevalue of atransaction or of property. ad valorem ad

5 tax negotiations are yet unknown. timelines of an outcome from these not produced inSouthAfrica. The the new vehicle market andare vehicles holdalarge segment of currently stands at0%to 18%.These size smaller than1000cc,which tariff onvehicles withanengine South Africa willincrease theimport on EVs down from 25%. Inreturn, the EUto reduce tariff theimport The dticisinnegotiationswith Development Programme (APDP). the Automotive Production and offset customs dutythrough manufacturers couldalready manufacturing of EVs, andvehicle this was meantto local support to EVs. Therationale was that rate of customs dutyapplicable for areduction inthegeneral (ITAC) rejected anapplication Administration Commission In 2018, theInternational Trade hybrids average around 42%. practice thetotal taxes onEVs and Thismeansthatin at around 17%). EV products onaverage work out vehicle price(SARS, 2020) (current maximum of 30%,basedonthe Ad valorem tax ranges upto a for alternative purposes. on VAT whichwould have beenused the opportunitycostof areduction cost of EVs. Onemust alsoconsider population, onaccountof thehigh higher incomesegmentsof the of beingtargeted atmiddleand which stillcarrytheperception act to justify reducing VAT onEVs, however acomplex balancing- on thepriceof theproduct. Itis excise duty-which isatax based reduce VAT ortheadvalorem EVs, theonlyoptionsare to either To reduce theupfront cost of this applicationwas unsuccessful. increase to 10%.Theoutcome of for three years, with asubsequent in dutiesonimported EVs to 0% application was for areduction to stimulate vehicles sales.The for thereduction duties of import BMW hasalsoappliedto theITAC investment riskto thecountry. manufacturing presents an policy directives onlocalEV As such, thecurrent lackof to incorporate EVmanufacturing. policies have notbeenadapted ICE vehicle manufacturing, those frameworks inplaceto support While there are enablingpolicy Development Programme (APDP). in theAutomotive Production and asoutlined government support, longstanding policy certainty and investors have of thecomfort sector works effectively because The incumbentautomotive forEVsand support 3.9.3. Lackof policy certainty manufacturing industry. adapt to thegrowth of theEV and ancillaryservicesto skills intheautomotive market There are currently insufficient facilitate market growth throughout thevalue chainto 3.9.4. Lackof localskills ©Global DistrictWatch sales for BMWinthecountry. possibly thehigheruptake inEV with premium brands, hence People identifyandassociate functioning transport sector. play animportant role ina services asthesesectors also dealerships, andaftermarket emergency responders, important for first-level mobility. Thistraining isalso transition towards electric technicians to facilitate the There isaneedto upskill existing All-Wheel Drive from theUKto SouthAfrica (MyBroadband, 2021) Table taxes 13:Import andtotal aTesla costof importing ModelXPerformance + 30%Ad Valorem tax + 25% dutytax + 15% VAT of 10%mark-up Wheel Drive intheUK All- Model XPerformance Purchase priceof Tesla Individual costs R 333 680 R 333 R 883 494 R 588996 € 96900 (Exchange rate Total inRand €1 =R20.87) R 2944979 R 2022303 R 2355983 R 3828472

54 ELECTRIC VEHICLES: MIR 2021 POLICY AND REGULATION

This section focuses on the policy and legislative framework relevant to the SA transport sector. It also highlights policies and strategies that speak to alternative transport. The Vehicle Assembly Allowance is a rebate mechanism targeted at doubling domestic vehicle production lines by providing lower tax rates for domestic vehicle manufacturers. ©Pxhere 0357 ELECTRIC VEHICLES: MIR 2021 • • the programme: consists of four pillars thatdrive The current APDP(2013-2020) 2021 until2035. Automotive Masterplan (SAAM)in replaced withtheSouthAfrican until 2020, whichitwillbe after January 2013 andwillbeinplace The APDPwas implemented on1 (2013-2020) Programme (APDP) and Development 4.1. Automotive Production automotive industry: policies are relevant to the manufacturing, andtrade. Several to investment, assembly, environment isconducive is key to ensuring thepolicy Industry andCompetition(dtic) of Trade,in SA.TheDepartment of TransportDepartment (DoT) transport isgoverned by the The regulatory framework for encourage increasing levels mechanism) – thisisto Production Incentives (rebate vehicle manufacturing. continued domestic support are meant to protect and duty(tax)Import –thesetariffs vehicle saleshave increased, second-tier player. Aggregated SA’sshifted globalpositionasa of theAPDPin 2013, ithasnot not declinedsincetheintroduction While theautomotive industry has for theProduction Incentive (PI). commercial vehicles also qualify components produced for heavy commercial vehicles), although vehicles (passenger cars andlight The APDPappliesonlyto light • • productive capacityupgrading. in amannerthatsupports and componentmanufacturers encourage investments by OEMs 2009, isavailable thissupport to (cash grant) –effective from Automotive Investment Scheme domestic vehicle manufacturers. providing lower tax rates for vehicle production linesby is targeted atdoublingdomestic (VAA) (rebate mechanism) –this Vehicle Assembly Allowance account reduction. allows for agreater duty production incentive valuation employment creation. Ahigher with positive spin-offs for the automotive value chain, of localvalue additionalong based solely onthewholesale so thattheincentive isnolonger the otherhand,haschanged this produced orimported). VALA, on (whether were parts locally irrespectiveSA, of localcontent price of thevehicle produced in was basedonthewholesaleselling (VALA). Thedifference isthatVAA Assembly LocalisationAllowance Allowance (VAA) to theVolume has adapted theVehicle Assembly which comesinto effect in2021, shortcomings. Thismasterplan, addressing some of thelatter’s 2020 to 2035. Itreplaces theAPDP, domestic automotive industry from growing the andsupporting The SAAMguidespolicy on (SAAM) 2021 –2035 Automotive Masterplan TheSouthAfrican4.2. traditional automotive industry. mechanisms, andincentives inthe but outlinestaxes, rebate provision for EVmanufacturing, This policy doesnotmake market supply. assembly exclusively for domestic sufficient demand to attract local local market isfar from having regional market hasdeclined.The but production for thelocaland • • SAAM’s goalsinclude: 2017). production (Barnes&Black, higher levels of investments and a framework for securingeven covered. The Masterplan creates importers anddistributors are also supplier industry. Vehicle and theSouthAfrican component off-highway vehicles), motorcycles, production (potentially including heavy, extra-heavy andbus truck, vehicle manufacturing, medium, covers carandlight commercial automotive industry, theSAAM Developed by government andthe and drops progressively to 35%). percentage starts at40%in2021 in theupdated APDP(the VALA VALA percentage asspecified is thenmultiplied by theapplicable wholesale sellingprice. Thefigure content from thevehicle’s to deductthevalue of imported selling price. Rather, OEMshave Africa to base; 60%,from a38.7% vehicles assembled inSouth increasing localcontent of annually by 2035); to reach 140millionunits to 1%of global output(projected growing SA’s vehicle production of Trade andIndustry (the dti)(dtic, 2019). 6 • Notable changesintheSAAM: • • • • The Department of Trade,The Department Industry and Competition(the dtic)was established inJune2019 by theincorporation of of Economic Development the Department (EDD) into theDepartment legs of theAPDP, isphased out (VAA), whichis oneof thefour The Vehicle Assembly Allowance commodities/technologies. value chains, across selected South African automotive deepening value additionwithin chain; and within theautomotive supply component manufacturers of black-owned automotive increasing thecontribution repair facilities, andsubstantially dealerships andauthorised black employees, empowering South Africans, upskilling industry by employing black of theSouthAfrican automotive achieving thetransformation and Thailand; competitors, such asTurkey that of leadinginternational competitiveness levels to improving automotive industry 112 000to 224 000jobs; the automotive value chainfrom doubling total employment in • • is expected to helpmopupthe tied to localvalue addition.This replaced by duty credits thatare certificates (PRCCs) willbe production rebate credit to 25% oncomponents.The benefit hasbeenincreased The Production Incentives (PI) credits for imported contents. manufacturers use by removing content inthecomponentsthat advocates theuse of local theVALAdomestically. Inshort, motor vehicles (LMVs) produced 2015 respectively, for alllight to 19%and18%in2014 and vehicle price. Thiswas reduced of 20% (2013) of theex-factory allowances component import gave vehicle manufacturers is different from theVAA, which but in2021 itissetat40%.This volumes above 10000units, for OEM of localvalue-add By 2026, theVALA issetat35% investment models. no disruptions to existing OEM between 2021 and2026 to ensure (VALA). VALA willbephasedin Assembly LocalisationAllowance and replaced by theVolume • • • either category. formula would notbeappliedin well asmotorcycles; buttheVALA heavy commercial vehicles, as now alsoincludesmediumand and LCVs). TheSAAM,however, to lightvehicles (passenger cars Previously, theAPDPonlyapplied dutychallenge.the highimport EVs. Thiswillpotentially address across alllight vehicles, including SA isseekingaone-tariff regime by NationalTreasury. however, stillsubject to approval scheme. Theseincentives are, hybrids willbecovered underthis technologies such asEVs and Incentives for investment into new and machineryisemployed. non-South African tooling levels inthoseinstances where reduced by 5% from current retained. However, itwillbe capital investments hasbeen Scheme (AIS)cashgrant for The Automotive Investment Africa duty-free. to bringnew vehicles into South are used by OEMsandimporters current surplus of PRCCs, which Investment Scheme(AIS). covered undertheAutomotive and hybrids are expected to be new technologies such asEVs Incentives for investment into and NationalTreasury, the DoT will: Industry andCompetition –dtic) of Trade,with dti(now Department EVs inSouthAfrica, inconjunction To radically grow theuptake of sustainable transport. strategy thatmakes provision for the first nationalgovernment-led promotes green mobilityandis and future transport demands.It andmeetcurrent the environment, minimise theimpactof transport on development principles, aimsto GTS, whichisbasedonsustainable a green transport strategy. The Transport (DoT) hasdeveloped emissions, of theDepartment national greenhouse gas(GHG) contribution of transport to To address thesignificant Africa: –2050) (2018 Strategy (GTS) forSouth 4.3. Green Transport 6

58 ELECTRIC VEHICLES: MIR 2021 0359 ELECTRIC VEHICLES: MIR 2021 • • • • • vehicles); and (e.g., hydrogen fuel cellelectric machinery and/or components the manufacturing of key of using local resources in related to thebeneficiation consider providing incentives however, anexpensive exercise; with EVtechnology –thisis, emission factors to beretrofitted technology vehicles withhigher introduce theconversion of old EV transition; could betwo areas to start the 3.5% (18695vehicles), which industry fleetsaccounted for in thecountry, whilecorporate vehicles) of total vehicle sales accounted (15423 for 2.9% government purchases in2019 andauthorities; departments and localgovernment work withnational,provincial, batteries; institutions to research EV work withlocalresearch local andexport markets; EVs inSouthAfrica, for boththe both produce andsellaffordable manufacturing incentives to offer producers of EVs EV batteries. there isnolocalmanufacturing of barrierasatthisstagean import therebythe bodywork, creating are notexcluding thebattery from In thecaseof EVs, theregulations and commuter buses (dti, 2016). content of thebus bodyfor city the PPPFA prescribe ~80%local Procurement Regulations under As such, thePreferential local content thresholds. local production withminimum that have beendesignated for Buses are oneof theindustries specified level of localcontent. sectors for localproduction ata industries, sectors, andsub- empower thedticto designate into effect on7December2011 to The revised regulations came of 2000 Framework Act (PPPFA) Procurement Policy 4.4. Preferential • developing localEVOEMs. assist inestablishing and (NCCRP) (2011) Change Response Policy 4.5. TheNationalClimate • • • • • • • the following areas: to 2050), withstrategies covering medium,andlongterm (up short, mitigation andadaptation inthe The planaimsto address both the transportation sector. mitigating theemissions from in mitigation, particularly a role to playinclimate change discussed previously, EVs have and integrated nature. As departmental, cost-effective, that response shouldbeof a Itrecognisesdepartments. response across allgovernment document guidingclimate change This policy isthekey policy management Disaster riskreduction and Human settlements Biodiversity andecosystems Health forestry Agriculture andcommercial Water Carbon pricing demand scenarios inSouthAfrica. constantly changingsupply and that failed to adequately meetthe done andresulted in anenergy mix years. However, thiswas never key stakeholders atleast every two plan’ thatwould bereviewed by IRP 2010 was intended to bea ‘living the 20 years from 2010 to 2030. The Africa’s forecast energy demandfor 2030 (IRP2010) inrespect of South the Integrated Resource Plan2010- Resources andEnergy) released Energy of Mineral (now Department of In May2011, thethenDepartment generation mix. it largely determines thecountry’s infrastructure investments. Thus, and 2)guidancefor future energy current planrunsupto 2030), demand inthenext 20 years (the meet thecountry’s electricity of various electricitysources to plan indicatingthequantities cost. Itprovides 1)anoverall will besupplied, andatwhat demand andhow thisdemand of SouthAfrica’s electricity aims to provide aclearindication Resources andEnergy (DMRE) from of Mineral theDepartment The Integrated Resource Plan Resource Plan(IRP2019) 4.6. Integrated The2019 decommissioning. job losses resulting from the at minimisingtheimpactof MW of coal-to-power isaimed the industry. Inclusion of 1500 energy, whichwillhelpsustain correct therollout of renewable include increased buildlimitsto Some of theseadjustments changing demandprofile. coal power plants, andthe the impactof decommissioning cost-competitive, minimisationof technologies thatare notcurrently accommodate new, innovative plan thatwillbeflexible to proposed to ensure apractical several policy adjustments are For theperiodending2030, policy certainty to themarket. IRP 2019 was gazetted to provide comment. InOctober 2019, thefinal latest IRPwas released for public for publiccomment.In2018, the IRP thathave beendistributed several revisions draft of the Since 2010/11, there have been Report 2021 (GreenCape, 2021). Services Market Intelligence provided inGreenCape’s Energy More details onthe2019 IRPare • • • • • • • • by 2030: following new additionalcapacity Provision hasbeenmadefor the in 2020/21. just transition strategy expected retained, pendingareport onthe These policy adjustments willbe landfill technologies. biomass, and co-generation, distributed generation, 4 000MWfrom other 3 000MWof gas/diesel; and 2 088MWfor storage; 1 860MWof nuclear; 14 400MWof wind; 6 000MWof solarPV; 2 500MWof hydro; 1 500MWof coal; December 2022. December 2022. Index (CPI) +2% peryear until31 will increase by Consumer Price to R6 andR48pertCO2e. Thisrate thisrate willrangeaccount, closer the tax-free thresholds into (tCO2e) emitted. However, taking tonne of carbondioxide equivalent imposed atanamountof R120 per The rate of thecarbontax willbe an impactonelectricityprices. 2030. InPhase1itwillnothave and phase2willbefrom 2023 to 1 June2019 to 31December2022, two phases: Phase1willbefrom The carbontax willbeappliedover came into effect on1June2019. was gazetted inMay2019 and The CarbonTax Act No15of 2019 of 2019 4.7. TheCarbonTax Act 15 determined andwillbemonitored. uptake inthecountry) isstillto be the energy demandfrom broad EV present anopportunity to meet renewable forms of energy (which on theuptake of solarandother The impactof thecarbontax consumption. with highfuelandelectricity especially affect businesses the next phasebegins.Thiswould thresholds willbeappliedbefore 1, changesto rates andtax-free been reviewed attheendof Phase Once theresults of thetax have carbon profile before2. Phase large emitters to transit to alow 1 are designedto incentivise of tax-free allowances inPhase relatively low tax rate andrange pays principle’ to thetax. This The Act hasassumed a‘polluter

60 ELECTRIC VEHICLES: MIR 2021 MARKET OPPORTUNITIES

There are several emerging opportunities in the South African EV market for local investors and investors looking to enter the South African electric mobility market. global LIBmarket (including South manufacturing isamedium-to long-term opportunity for the Africa’s domestic market). Lithium-ion batteries ©Pxhere

62 ELECTRIC VEHICLES: MIR 2021 0363 ELECTRIC VEHICLES: MIR 2021 Source: Bloomberg NEF EVglobalmarketFigure 22: share forecast investors lookingto enter local investors andinternational opportunity isrelevant to both electric buses inSouthAfrica. This opportunity for theuptake of There isamedium-term public transport and electrification of 5.1. Localmanufacturing identified inSA’s EVmarket: investment opportunities The following are emerging BUSES

MEDIUM COMMERCIAL Share of fleet 40% 60% 90% 30% 80% 50% 20% 70% 10% 0% 2019 2025 HEAVY COMMERCIAL LIGHT COMMERCIAL 2030 Year investment opportunity. Africa, presents asignificant for bus manufacturing inSouth 70% localcontent requirements 2040, andthedesignationof over electric buses willriseto 70% by that theglobalmarket share for combination of theexpectation terms of market share. The growth of theEVmarket in electric buses willleadto the (Figure 22), itispredicted that on theprecedent setby China the SouthAfrican market. Based 2035 2040 PASSENGER • • domestic market. producing buses largely for the for thebus market asitisalready electrification. Thisisespeciallytrue presents thebestbusiness casefor the SAcontext, publictransport to 60%for passenger vehicles. In rate of 100%since2013, compared show acompoundannual growth other EVsegmentglobally.E-buses surpassing thegrowth of every growth rate are inChina,e-buses Led by theaggressive e-bus cost-effectively. employ to financeelectricbuses that transit companiescould innovative financeapproaches Drive (PAYD) present attractive, You Save (PAYS) andPayasYou finance electricbuses. Payas looking atmechanisms to Cities/municipalities are already energy, andemissions efficient. groups. Buses are alsospace, are accessible across allincome mass-based transit systems that private buses are transport, expand theirbus routes. Unlike factors thatare forcing citiesto andcongestion,are network, commuters onto theroad rail networks thathave pushed Increasing urbanisation,failing

risks ormay be acredit risk. well equipped to managethese the operator, whomaynot be the riskonmunicipality and Traditional modelsconcentrate andtechnology).operational risk, (demand, credit andfinance, reallocate costsandrisks instruments thatdiversify and — includingfinancial business caseandbankability considered inimproving the financing mechanisms couldbe in SouthAfrica, PAYS andother associated withvehicle finance and thehighinterest rate capital costinpurchasing EVs, Also, because of thehighupfront in SA, there isscopetoin SA, revitalise benefit of duty-free importation content requirements for public Buses are designated inSAand e-bus manufacturinge-bus isamore While thisisafairly flatmarket subject to thedti’s ~80%local of receives buses further the procurement. Theassembly of alldriveline components. economically viableway of this space. Incorporating Electric public transport Electric publictransport achieving thisgoal. fleets with electric variants when fleets withelectric when variants at leastpartially, orreplace ageing start incorporating electricfleets, require operators to progressively municipalities couldpropose to or When renewing bus contracts, pollution intheprocess. andavoid air emission transport, channel thatgrowth into low opportunity to doitrightand ten years. Thus there isan vehicle fleetgrowth inthe next South Africa, willface massive most African countries, including Environmental Programme (UNEP), According to theUnited Nations vehicles (SOV). single-occupancy public transport ascompared to it ismore efficient to electrify through theentire value chain, life cycle assessment perspective in thetransport sector. From a for about40%of theenergy use both publicandprivate, account EVs increases significantly.Fleets, domestically untilthedemandfor and itisunlikely to materialise correlated withtheirdemand, The manufacturing of EVs is responsibilities (C40 Cities, 2018). and theseparation of the operator, through unbundling to separate theasset owner from Newer alternative modelstry and overlaps between EV and and and overlapsEV between fact thatthere are many similarities energy sources, isbuoyed by the to EVs, powered by renewable Transitioning thismanufacturing trips inSouthAfrica, anditisrising. share represents of 67% alldaily the drivingstyle. Thetaxi market due to thedistances travelled and of MBTinSouthAfrica isvery high even thoughthemaintenance cost currently available in SouthAfrica, (electricno e-MBT minibus taxi) to electricvariants. There isstill from ICEminibuswith ashift taxis align thetaxi-scrapping allowance There ispotentiale-mobility. to the localtransport industry towards opportunity to start transitioning Programme (TRP)couldprovide an relaunched Taxi Recapitalisation of Transport’sThe Department sustainable andlower carbon. transport thatrelies onitismore by ensuring thegridand the increased energy demand operators orothers, couldsupport utility, Eskom, bus company by municipalities, theenergy generation onasmaller scale scale, ordistributed embedded procured from IPPs onalarger Renewable energy sources, either their useful life iscomplete. rapidly. isaccelerating and theshift manufacturer hasanEVstrategy, embracing them.Now every major EVs, just afew years ago, to fully registering thepossibilities of Local OEMshave gonefrom barely ICE drivetrains andcomponents. high production cost of batteries. cost whichis directly linked to the EVs have ahighupfront capital As indicated inSection3.8.2, of useful life point. have notyet reached theirend- still very low, andthoseavailable because thenumber of EVs is not yet viableinSouthAfrica Battery recycling is, however, as itisvery labour-intensive. throughout thevalue chain, the potential of creating jobs ion battery manufacturing has from theEVindustry. Lithium- market andincreasing demand on thediversification of theLIB Africa’s domesticmarket), based global LIBmarket (includingSouth long-term opportunity for the manufacturing isamedium-to Lithium-ion batteries (LIB) (LIB) production Lithium-ionbatteries 5.2. leading cathode chemistry types. leading cathode chemistrytypes. cobalt oxide (NMC) are thethree oxide (NCA), andnickel manganese lithium nickel cobaltaluminium Lithium iron phosphate (LFP), different chemistriesinbatteries. EV manufacturers use several are retired. storage thevehicle after batteries the vehicle; and(2)assecond-life storage whilethey are installed in useful applications:(1)mobile batteries have two otherpotentially Besides powering thevehicle, EV the batteries. terms of theproduction volumes of cost thanoneconomiesof scale, in depend much less onraw material kWh. Thisisbecause thecosts weighted average hittingUS$156/ 89% since2010, withthevolume- price of lithium-ionbatteries by technology, hasreduced the and EVs, together withimproved electronics, stationary storage, ion batteries from consumer increased demandfor lithium- uptake of EVs inthecountry.The of thebiggestbarriers to the based onprice, this remains one their vehicle purchase decision of theEV. Asmostpeoplemake between 30%and50%of thecost These batteries stillaccountfor

64 ELECTRIC VEHICLES: MIR 2021 0365 ELECTRIC VEHICLES: MIR 2021 ©Pxhere raw material inSouthAfrica. Copper ore isanavailable lithium-ion battery production Table 14:Availability of raw materials inthesub-Saharan region for various mineral ores, whichcan fortunate enoughto possess The SouthernAfrica region is by 2027. which isexpected to grow to 53% for about28%of globalEVsales, NMC cathodescurrently account internal resistance. its highspecificenergy andlow for theEVindustry. Thisisdueto prevalent andthefastest growing Of thethree, NMCisthemost Copper Graphite Lithium Cobalt Manganese Nickel and metals Minerals

South Africa, DRC, Namibia, Zambia, andZimbabwe Madagascar Mozambique of globalreserves), (20-40% Tanzania, Zimbabwe, and Namibia Zimbabwe (5thlargest producing country), SouthAfrica, and and Zambia DRC (>60%of world supply, of which85% isexported to China), and Ghana South Africa (70% of theworld’s manganese reserves), DRC, Gabon, South Africa (9th largest globalproducer) andZimbabwe Source Country tariffs, andcreate acustoms union. of capital andgoods, eliminate single market for easy movement in theworld. Itaimsto create a 2019, isthelargest free trade area materials. AfCFTA, enacted inMay thus aidinaccessing theseraw Adaptation andMitigationcould Programme onClimate Change Area (AfCFTA) andtheSADC African Continental Free Trade in Table 14andFigure 23.The of lithium-ionbatteries, asshown be useful inthelocalproduction (Source: U.S. GeologicalSurvey 2020) Figure 23:Reserves of EVminerals intheSouthernAfrica region the widerAfrican market. represents astrong entrypointto LIBs, manufacturing inSAalso challenges of transporting Considering thesafety and theregion’s miningindustries. provide aboostto SouthAfrica prices for theseminerals could The increasing globaldemandand are minedinsub-Saharan Africa. materials required inthecathode manganese. Moreover, otherraw SA possess 78%of theworld’s especially manganeseandcobalt. cathode battery chemistry, materials required for theNMC can provide someof theraw South Africa’s mining sector (and recycling) industry. Besides, its existing battery manufacturing lithium-ion batteries because of manufacturing destinationfor South Africa isanattractive

66 ELECTRIC VEHICLES: MIR 2021 0367 ELECTRIC VEHICLES: MIR 2021 thinner and smaller battery packs. flammable risks and allowing for solid material, reducing the solid glass, ceramic, oranother pasty electrolyte, butinstead use vehicle. They donot use aliquid/ integrated into thestructure of the solid-state batteries caneven be to theirreduced fire risk.These for localuse andproduction due provide anadditional opportunity why solid-state batteries could leading to short-circuits. Thatis or faults intheassembly process overcharging, excessive currents, the highheatoccasionedby is, however, quite highdueto The fire risk of lithium-ionbatteries (Source: GreenCape) Figure 24: LIBmanufacturing value chain Lithium IonBattery Graphite Cobalt Li Raw materials Manganese Al, Cu,Fe Nickel CaF Ti 2 to five years. vehicle market for the next three continue dominating themotor battery market isexpected to and subsidies, thelead-acid due to theabsenceof incentives happen ataslow butsteady pace the uptake of EVs expected to a backup power source. With used inmotor vehicles andas market. Thisbattery istypically player inthecountry’s battery battery isthecurrent dominant Be thatasitmay, thelead-acid energy densities. They alsotypicallyhave higher Current collectors Cell casings Processing Electrolyte Cathode Anode Battery packinputs Cooling • the LIBmanufacturing space: that islookingatSA’s potential in since restructured asthedtic— Programme (THRIP) of thedti— Human Resources for Industry intheTechnologypartners and the organisations listed below are In terms of activityinthecountry, Packs BMS to theassembly support of control protocols, andprocesses human resource skills, quality assembly process conditionsand best available lithium-ioncell manufacturing facility withthe providing thelithium-ioncell Cape (UWC) isresponsible for University of theWestern Ability exists in SA Retail

Bottleneck • in SA and batteries. for thetesting of lithium-ioncells Southern Africa to beaccredited only battery testing laboratory in lithium-ion celltesting. Itisthe international standards for and for executing testing under protocol for theprogramme, the lithium-ioncelltesting is responsible for defining programme uYilo e-mobility with Zellow Technology. lithium-ion cellsinpartnership second life Battery

supply inSA Limited Energy sector Sustainable recycling Battery • • • standards have beenmet. once allsafety and quality agreeing to utilisetheproduct case for thefinal product and providing aconsumer use Metair isresponsible for take agreements. and using casesthrough off- product by identifyingcustomers commercialisation of thefinal competency, drivingthe lithium-ion cellmanufacturing for thedevelopment of alocal Zellow Technology isresponsible assembly process. be utilisedinthelithium-ion property andraw materials, to using SouthAfrican intellectual cathode material manufactured, is responsible for providing Industrial Research (CSIR) Council forScientificand Effective from 23August 2013, leadacidbatteries disposalisbanned from landfill.All ‘other batteries’ willbebannedfrom landfill by 2021. a key driver for theincorporation of LIBreuse andrecycling by LIB capabilities (29 016t)asaresult of theWaste Act. TheAct isalso The leadacidbattery market hasseenanincrease inrecycling In terms of theNationalEnvironmental Management: manufacturing companieslookingto setupinSA. Waste Act 59of 2008): of contribution to theGDP. industry inSouthAfrica interms industry hasovertaken themining cheap labourforce. Theautomotive sector, backed by arelatively in thecountry’s manufacturing market. Itisadominant industry SA hasavery strong automotive opportunity asdemandincreases. domestic market isalonger-term industry. Manufacturing for the drawn from theautomotive export markets andtherevenues if SAisto maintain itsvehicle in Section3, thisisimperative the export market. Asdiscussed electric passenger vehicles for as amanufacturing hub for opportunity for SAto beused There isamedium-to long-term manufacturing 5.3. Passenger vehicle

vehicle electrification. potential market for passenger the country.Thisrepresents the the total self-propelled vehicles in South Africa, representing 65% of 7 510297 passenger vehicles in as of September 2020 there are As shown inTable 10previously, US, andcountries intheEU. for companiestargeting Africa, the suitable manufacturing destination manufacturing, positionSAasa SADC, coupledwith cheaper custom-free to 28countries) and vehicles to andparts beexported has withtheEU(which allow The trade agreements thatSA to cheapermanufacturing costs. tax incentives offered, contributes base, combinedwiththesignificant competitive. Thismanufacturing market andremain internationally volumes to stimulate thelocal and increasing vehicle production of securinghigherinvestments government isfaced withthetask nickel, manganese, etc. TheSA Platinum Group Metals (PGM), in terms of creating demandfor theminingsector also support The automotive sector could battery EV(BEV). by plug-inhybrid EV(PHEV)and EV salesinSouthAfrica, followed comprise thelargest number of Africa in2019. HybridEVsales 0.04% of vehicle salesinSouth EVs accounted for ameagre be recognised. for any significantgrowth to creating anenablingenvironment market step change towards This speaks to theneed for a in salesfrom 2015 onwards. There isanotable decrease and 2018, respectively. BMW andJaguarfollowing in2015 entered themarket in2013, with slow growth pathsinceNissan decade. Thismarket hasseena by vehicle modelover thelast electric passenger vehicle sales providesfurther abreakdown of Figure 25,onthenext page,

68 ELECTRIC VEHICLES: MIR 2021 0369 ELECTRIC VEHICLES: MIR 2021 African government. not goneunnoticedby theSouth automotive sector. Thisthreat has term viabilityof SouthAfrica’s represents athreat to thelong- away from internal combustion The globaltrend towards EVs and (Source: TIPS, 2020) Figure 25:Passenger EVsalesinSouthAfrica since2010 1 000 1 200 1 100 400 600 900 300 800 500 200 700 T 100 oyota Prius 0

L exus RX T oyota Yaris

H onda J

Toyota Yaris azz H onda CR-Z

Mercedes S-Class Lexus CT find strong support. manufacturing industry willlikely sector towards EVs, andtheEV inthemanufacturingfor ashift a localEVmarket isnotrequired The government recognises that

Lexus GS Honda Insight

Mercedes E-Class Lexus ES

Porsche Cayenne Lexus UX

BMW 3-series

Infiniti Q50 BMW 5 -series

Porsche Panamera Lexus NX underground mining construction, retail, and 5.4. EVuse in throughout themining value chain. 2019 andemployed 454861people billion) of South Africa’s GDPin industry contributed 8.1% (R360.9 Mineral Resources, the mining According to of theDepartment

Lexus LS

Lexus IS BMW 7-series

Citroen DS5

BMW i8 Land Rover Range RoverVolvo XC90Sport

Mercedes C-class BMW X5

Mercedes GLE

(MCSA, 2020).(MCSA, Minerals Councilof SouthAfrica 2019 alone, according to the of themininginput costsin contributed R71.6 billion(32%) provision, andstorage costs underground transportation regulation. Transport, including underground, and temperature mining operations isgettingair One of thehighestcostsfor BMW 7-series Land RoverMercedes Range S-class Rover

BMW 3-series

BMW i3 Nissan Leaf Jaguar l-Pace

going vehicles. This onlyrepresents theroad- South Africa asof September 2020. heavy loadtrailers (> 3500kg) in vehicles (>3500kg), and209 085 total of 379 403heavyload Table 15shows thatthere isa Table 15:Live heavyvehicle loadpopulationinSouthAfrica: September 2020 for miners. costs, andsafeguarding health requirements, andtherefore lower necessitating fewer ventilation other tailpipe emissions, thereby frommatter diesel and (PM2.5) produces nofineparticular Electric miningequipment GVM >3500kg Heavy loadtrailers GVM >3500kg) Trucks (Heavyloadvehicles Vehicle Class

65 254 140 166 GP vast opportunity. class therefore portends a Electrification of this vehicle do notneedvehicle licences. as they are and notroad-going register database, onthee-Natis mining equipment thatwould not It doesnotaccountfor the energy compared to diesel. of theconversion from electric heat because of higherefficiency loaders, anddrillrigs, produce less (load, haul,dumpmachines), including battery electricLHDs Additionally, EVminingequipment, 24 514 50 283 KZ 24 597 46 331 WC 7 438 22 563 EC Province 19 745 22 518 FS platinum mineinLimpopo. American’s Mogalakwena open-pit take placelater in2020 atAnglo- in 2020. Test runs are scheduledto powered EVhybrid miningtruck the world’s largest hydrogen- Advanced Engineering, isbuilding assistance from Williams withdesign Anglo-American, operational expenditure. savingonmining costsand further and requires less maintenance — produces less noiseandvibration, electric miningequipment also heat regulation underground. The This saves onventilation and 39 536 44 246 MP 11 108 17 286 NW 10 999 26 955 L regulation (outlined inSection4.8 ) the recently enacted carbontax regarding emissions, such as prepare for changinglegislation cost-effectiveness, aswell asto benefits of energy efficiency and companies wanting to reap the increasing locally, owing to powered hasalsobeen forklifts The demandfor lithium-ion 5 894 9 055 NC 209 085 379 403 Total 17,50% 3,30% propelled self- % of total

70 ELECTRIC VEHICLES: MIR 2021 FUNDING AND INCENTIVES

A range of general and sector-specific funding solutions and incentives is available to investors, manufacturers, and service companies in the green economy. It covers Development Finance Institutions (DFIs), local public and private sector financiers and investors, and a considerable range of tax incentives. The BMWbattery-powered iX Vehicle, hasbeenannounced to arrive intheSouthAfrican crossover Activity –iXSport ©District Watch Group market in2022.

72 ELECTRIC VEHICLES: MIR 2021 0373 ELECTRIC VEHICLES: MIR 2021 8 7 invested inSA.Findoutmore here. billion inannual climate finance Landscape hastracked R62.2 South African Climate Finance spending inthesectors. The between publicandprivate level coherence andcoordination selected policiesandimprove shape sectoral strategies and role-players withinformation to publicandprivatecan support instrument anduse. Theinsights in detail thesource, disbursement, project-level data, understanding Landscape looks atdetailed The SouthAfrican Climate Finance goods andservices. those whouse orprocure such service companies, aswell as technology manufacturers and incentives available to green of fundingsolutionsandtax drive isonthebackof arange Singapore, andFinland).This agenda (ahead of Australia, terms of drivingthegreen growth top 15nationsintheworld in South Africa ranks asoneof the

https://www.green-cape.co.za/content/focusarea/green-finance-databases https://www.greencape.co.za/assets/Uploads/Government-Funding-and-Incentive-Booklet.pdf highlighted below. the available database are in thegreen economy. Afew of available to companiesoperating cover fundingandincentives of Green Financeresources that hosts aweb pagewithanumber The GreenCape FinanceDesk web page 6.1. General database business. TheGFDworks across all sector desks atGreenCape. content/sector/green-finance https://www.greencape.co.za/ For more pleasevisit support of green projects andgreen facilitator inthefinancing (GFD) primarilyactsasa The Green FinanceDesk FINANCE LANDSCAPE ACCESS THE SOUTH AFRICAN CLIMATE

and download online The database isavailable to view the mainsource of opportunities. South African institutions being and financialincentives, with broad range of funding solutions It isidealfor any entityseekinga relevant contact details andlinks. an overview of theopportunityand funding opportunities, including information onmore than150 investors. Thedatabase contains relevant to green economy and incentives thatmaybe a database of fundingsources Tourism, GreenCape maintains Economic Development and Government of Department In conjunctionwiththeWestern

6.1.1. Green FinanceDatabase 7 . Enhancement Programme). Aquaculture Development and specific incentives (i.e. and adiverse setof sector enterprise development infrastructure grants, small cover localmanufacturing, critical download online incentives isavailable to view and government fundingand focused onSouthAfrican An updated document incentives database 6.1.2. Government and funding 8 . Theseincentives 10 9 Finfind co.za/quiz/disclaimer/wesgro more here: https://wesgro.finfind. finance for theirbusiness. See to assist localcompaniesseeking Wesgro haspartnered withFinfind understanding of finance. those whowant to improve their business advisoryservices, and are seekingfundingand/or for SouthAfrican SMMEswho to SMEs.Thedatabase isideal over 350loanproducts available has more than200 lenders and on finance readiness, Finfind and financeseekers. Witha focus together SMMEfinance providers finance solutionthatbrings 6.1.3. Finfinddatabase

https://www.finfindeasy.co.za/

https://alliedcrowds.com/ 9 isaninnovative online

AlliedCrowds 6.1.4. AlliedCrowds database • addition: impact investing). In angel investing, venture capital, and typeof funding(crowdfunding, of capital (equity, lending,grant), agriculture andsocialimpact), type for sector (includinggreentech, database where onecanfilter and allows users to access aglobal the developing world. Sign-upisfree alternative financeproviders in aggregator anddirectory of are available. Economy Organisation (WGEO) (SDGs) andtheWorld Green Sustainable Development Goals Themed databases around the 10 isthefirst complete • • global scale. range of financialsolutionsona for any entityseekingabroad database. Thisresource isideal create acustomised funding also contact AlliedCrowds to Businesses /organisations can downloaded for free. funding sources, canalsobe specifically about African Reports, includinganumber access therelevant content Click thebuttons below to AND INCENTIVE BOOKLET GOVERNMENT FUNDING GREENCAPE’S GREEN FINANCE WEB-PAGE FINFIND WEBSITE ALLIED CROWDS GREEN FINANCE DATABASE WEBSITE

74 ELECTRIC VEHICLES: MIR 2021 THE WESTERNSECTOR CAPE: AFRICA’S GREENOVERVIEW ECONOMY HUB

Rising electricityThe Western prices, Cape national is a world-classenergy insecurity, investment dropping destination. technology costs, supportive energy policies, and incentives are prompting consumers to explore alternative energy options driving the growth of the Energy Services (ES) market in South Africa, and creating a thriving value chain. MellowCabs is a delivery company based in Stellenbosch, Western Cape which uses electric vehicles for delivery. ©MellowCabs 0377 ELECTRIC VEHICLES: MIR 2021 a divisionof theFinancialTimes. Direct Investment (fDi)Intelligence, investment destinationsby Foreign among thetop 21global In 2017, CapeTown was ranked and anoutstanding quality of life. excellent schoolsand universities, natural beauty, vibrant culture, placetoafter live, withunrivalled resources. Itisalsoasought- and anabundanceof natural workforce, low operational costs modern infrastructure, askilled and investors withprimelocations, The province provides businesses • • • • • • Western Capeoffers: in SouthAfrica andbeyond, the for green technology andservices strong andrapidly growing market economy hub. Coupledwitha viewed by many asAfrica’s green why theWestern Cape Province is There are compellingreasons business A great placeforgreen Technologies. Economic Zone (SEZ)for Green incentives in theAtlantis Special A range of investment skills programmes. and dedicated green economy comprehensive R&D capabilities Five universities with the green economy key priorities. made easeof doingbusiness and A supportive government thathas resource efficiency. waste, water, bioeconomy and utility scalesolarandwind, in agriculture, energy services, for businesses andinvestors Significant market opportunities financiers. professional servicesand Local presence of major companies present. critical mass of leading and cleantech hub, witha Africa’s renewable energy industries. training for thewindandsolar industry-related andaccredited SARETEC: Offers specialised green entrepreneurs. providing nonfinancial support to SAREBI: Abusiness incubator the Western Cape. and trade promotion agency for Wesgro: Theofficial investment green economy sectors. andmarketsupport intelligence to GreenCape: Provides dedicated and jobcreation inCapeTown that generates economicgrowth environment to attract investment CreatesInvestment: anenabling City of CapeTown Enterprise and registrations -allunderoneroof. on permits, licensingand convenient investor support InvestSA OneStop Shop:Offers landscape intheProvince. Driving thegreen economy policy Economic Development &Tourism: Western of CapeDepartment and services, including: investors focusing ongreentech forsupport businesses and The province alsooffers dedicated and investors Supporting businesses province andSouthAfrica Market opportunities inthe skills programmes. and dedicated green economy development (R&D) capabilities with comprehensive research and University –underpinallof this Nelson MandelaMetropolitan and theGeorge campus of the Peninsula University of Technology of theWestern Cape, theCape Stellenbosch University, University – University of CapeTown, The region’s five universities R&D capabilitiesandskills website for more information). MIRs andtheGreenCape on thenext page(seeindividual years are outlinedinthegraphic and SouthAfrica inthenext five opportunity areas intheprovince Some of themajormarket the Witsandcommunity. of Dassenberg Road, andwest of Cape Town, southof Wesfleur, east the Atlantis industrial area of north technologies. TheSEZissituated in value chainsof different green suppliers andotherplayers inthe manufacturers, serviceproviders, The zone welcomes that willbewelcomed to thezone. examples of green technologies green buildingmaterials are all vehicles, materials recycling and panels, insulation, biofuels, electric the planet.Windturbines, solar reverse theimpactof peopleon - technologies that reduce or the green technology space and provision of servicesin dedicated to themanufacturing The Atlantis SEZisazone TECHNOLOGIES ECONOMIC ZONE FORGREEN ATLANTIS SPECIAL ATLANTIS SEZ WEBSITE CLICK TO VIEW THE

universities andgreentech markets. also closeto roads, majorports, fibre connectivity too. Atlantis is and shippinglinks, whilstboasting Atlantis hasnew publictransport Bulk infrastructure isinplace and available for leasingto investors. zoned development-ready landis development ready. 94hectares of Atlantis isagreat locationand theSADC region.particular point for thewholeof Africa, in other sectors andisagreat entry waste, agriculture, transport and Africa hasopportunities inenergy, neighbouring countries.South growing greentech market inthe atleastR30bn;witha is worth greentech manufacturing market for greentech. TheSouthAfrican South African andAfrican markets There are strong andgrowing Why invest intheAtlantis SEZ? exemptions andsubsidies. development approvals, fee tax incentives, fast-tracked allowances, employment in theform of tax relief and accessing attractive incentives Investors andtenants are approval; andskillstraining. planning anddevelopment access to permitsandlicenses, market intelligence; facilitated information andadvocacy; Together theecosystem provides City of CapeTown, andWesgro. includes InvestSA, GreenCape, the investor ecosystem, support which andtherestsupport of the the OneStop Shopfor investor investment through support Investors have access to extensive professional candidates. skilled, technical and large range of unskilled,semi- colleges intheprovince, anda with 5universities andmany more ranging skillsbaseto recruit from There isanattractive, wide- TO EMAIL THE ATLANTIS SEZ BUSINESS DEVELOPMENT FOR MORE INFO, CLICK EXECUTIVE

78 ELECTRIC VEHICLES: MIR 2021 GREENCAPE’SSECTOR SUPPORT TO BUSINESSESOVERVIEW AND INVESTORS

RisingGreenCape electricity prices, is a non-profit national energyorganisation insecurity, that droppingworks at thetechnology interface costs, supportiveof business, energy government policies, and and incentives academia are to promptingidentify and consumers remove barriers to explore alternativeto economically energy options viable driving green economythe growth infrastructure of the Energy solutions. Services (ES) Our visionmarket is a thriving in South prosperous Africa, and Africa, creating mobilised a thriving by valuethe green chain. economy GreenCape is a non-profit • free, credible and impartial Our market intelligence reports organisation that works at the market information and insights form part of a working body We have facilitated and interface of business, government • access to networks of key players of information generated by supported ~R41bn of investments and academia to identify and in government, industry, finance sector desks and projects in renewable energy projects remove barriers to economically and academia within GreenCape’s three main and manufacturing. From these viable green economy • an advocacy platform to help programmes – energy, circular investments, more than19 000 infrastructure solutions. Our vision create an enabling policy and economy and resources. jobs have been created. is a thriving prosperous Africa, regulatory environment for mobilised by the green economy green business Benefits of becoming a Through our WISP (industrial GreenCape member symbiosis) programme, by Working in developing countries, We assist local, provincial connecting businesses with GreenCape catalyses the and national government to We currently have over waste / under-used resources: replication and large-scale uptake build a resilient green economy 2 500 members, and offer free of green economy solutions to by providing: membership. Becoming a member enable each country and its of GreenCape will give you access 309 200 fossil GHG citizens to prosper. We work with • support on the development to the latest information regarding emissions saved businesses, investors, academia of standards, regulations, tools developments in the various (equivalent to the and government to help unlock and policies sectors; access to tools, reports, electrical usage of the investment and employment • expert technical knowledge on and project information; and offer 39 800 households in SA); potential of greentech and services, key sectors in the green economy you the opportunity – through our and to support a transition to a • access to networks of key players networking events – to meet and resilient green economy. across business, academia, and interact with various stakeholders Over R120 million internationally in the green economy. generated in We assist businesses by financial benefits removing barriers to their Since inception in 2010, GreenCape (additional revenue, establishment and growth and has grown to a multi-disciplinary cost savings and private provide our members with: team of over 40 staff members, investments); representing backgrounds in CLICK HERE finance, engineering, environmental TO BECOME science and economics. 69 permanent A GREENCAPE jobs in member MEMBER companies, as well as 25 temporary positions, and 218 economy- wide jobs in supply chains ENERGY SERVICES: MIR 2021 MIR SERVICES: ENERGY have been created. 80 REFERENCES Aerial view of the Foreshore Bridges. ©City of Cape Town 0383 ELECTRIC VEHICLES: MIR 2021 January 2019]. hit-4-million/> [Accessed 29 blog/cumulative-global-ev-sales- from: . [Accessed Available from Electric-Vehicle-Market-2018- home/20180827005257/en/Global- www.businesswire.com/news/ 2025. Available from prices-have-changed-in-south- news/energy/176603/how-fuel- from: - factors-competitive-analysi the-industry-key-influencing- industry---size-and-state-of- the-south-african-motor-vehicle- news-releases/2019-study-of- Pretoria, onlineversion.pdf/71e19f1d-259e- Transport_Strategy_2018_2050_ za/documents/11623/89294/Green_ from: competition-the-dtic of-trade-industry-and- co.za/units/view/46/department- [Accessed November 2018]. gov.za/industrial_development/ Available from: [Accessed www.aiec.co.za/Reports/ 2017. Available from: to-south-africa.html much-it-costs-to-import-a-tesla- news/motoring/388258-how- com/features/2016-ev-oil-crisis/ from: PlugShare 2019. Available from: Chapter%204.pdf> national%20budget/2019/review/ www.treasury.gov.za/documents/ Report. Available from Pretoria, minimum%20threshold%20for%20 INote%20on%20a%20stipulated%20 Resource_Centre/Legislation/ reaching-the-consumers analyse-markets/south-africa/ en.portal.santandertrade.com/ consumer. Available from: [Accessed < https://transportgeography. Transportation. Available from: Environmental Impactsof Rodrigue, JP2017. The [Accessed November 2020]. Levy. Available: www.raf.co.za. Road Accident Fund 2020. Fuel

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The writing of this MIR was made possible with the generous support of the Western Cape Government of South Africa.