The future of e-mobility in the Southern African Development Community (SADC) depends on the prioritisation of e-mobility to the poor and vulnerable, while embracing and adapting to the key driving forces of the electric vehicle revolution (e-volution). Yet the SADC Green Economy Strategy and Action Plan, with its policies that focus specifically on transport and electric vehicles, has seen little progress in implementation by SADC member states. There is thus a need for a paradigm shift – from monomodal mobility to multimodal mobilities, including micromobility, which should be at the heart of the post-COVID-19 economic response and green recovery plan. This policy insight outlines core constituents of achieving a just regional evolution. The post-COVID-19 response is a great opportunity to use e-mobility as a catalyst for prioritising the systemic equity of mobility of both urban and marginalised rural communities. The South African Institute of International Affairs (SAIIA) published a policy insight reviewing the pathways toward enabling just e-mobility transitions in SADC member states. An extract from a policy insight based on the research undertaken by Deon Cloete.
The COVID-19 pandemic has wreaked havoc on the automobile industry, with an expected 23% drop in global sales of internal combustion vehicle (ICE) passenger cars. A recovery in sales figures to 2019 levels is only expected in 2025. However, sales of electric vehicles (EV) are expected to perform better than their ICE counterparts, with a predicted drop of 18% (1.7 million units) in the number of passenger cars. While they will be impacted by the pandemic, they are slightly shielded owing to a backlog of orders, a rich offering of new affordable models because of particularly supportive policies in Europe and China, and rising demand for zero-low emission vehicles. Despite a market share of only 3% globally with over 7.2 million EVs, the EV sector is projected to flourish and achieve a market share of 7% by 2023 (5.4 million units).
The fastest-growing EV sector globally is low-speed electric vehicles (LSEVs), or the micromobility segment, which represents 30% of the global two-wheeler market share. The pandemic and resultant lockdowns have had a serious impact on the public transport sector, with a possible lasting drop in users. This is because of the adoption of physical distancing protocols and a preference among users for privately owned or isolated forms of mobility over shared transport. However, the main driver of change in the larger-scale adoption of e-mobility remains government policy, including:
- public procurement programmes;
- financial incentives that reduce the cost of buying an EV;
- tightened fuel-economy standards and regulations on the emission of local pollutants;
- low- and zero-emission vehicle mandates; and,
- various local measures, such as restrictions on the circulation of vehicles based on their pollutant emission performance.
In SADC, South Africa has for many years protected its auto manufacturing industry. Its ICE vehicle production, assembly and export markets represent 57.2% of Africa’s total vehicle production. The industry plays an important role in the South African economy, contributing 6.4% to gross domestic product and accounting for 27.6% of manufacturing output, 15.5% of total exports and 13.1% of total imports in 2019. It employs 110 250 people in the vehicle and component production sector alone and annually attracts more than ZAR 10.8 billion ($655 million) in foreign direct investment. There are few automobile production activities in the rest of the region. Botswana, Mozambique and Zimbabwe all have attracted investments owing to their proximity to South Africa, but these industries are isolated and insignificant in global terms. The automobile industry is already feeling the effect of the shift to e-mobility in exports as new policies in European and Mercosur countries start to come into force.
Many countries have adopted efficiency requirements across all car models, with original equipment manufacturers (OEMs) offsetting high fuel-consuming vehicles with ‘greener’ models like hybrid vehicles and EVs to compensate for those that are less carbon emission efficient. Recently, South African EV sales have increased substantially, from 58 units in 2018 to 154 in 2019 (28%). While these numbers pale in comparison to the global e-mobility boom, the year-on-year growth demonstrates this market’s potential. The National Association of Automobile Manufacturers of South Africa (NAAMSA) and the Department of Trade, Industry and Competition are actively working on measures to ensure the evolution of the local auto industry towards e-mobility.
At present the growth of EVs in South Africa is mainly the result of private sector investment in charging infrastructure, such as a national network of charging stations in shopping malls and car parks. There are also community-based peer charging solutions that give access to charging stations and reserve chargers. This accessibility is based on sharing economy principles and community-based platforms where homeowners and businesses connect with EV owners through social media or smartphone apps. In addition, South African EV sales are propelled by early adopters, fuel efficiency concerns and ecologically conscious drivers, although only high-income earners can afford EVs. A significant shift in supportive policies is needed to make EVs an affordable option for the majority of lower income earners in SADC countries.
This policy insight reviews the pathways toward enabling just e-mobility transitions in SADC member states.
The future of e-mobility in SADC
Africa has a motorisation rate of only 44 out of 1 000 people, whereas the global average is 180. SADC member states also have a deficit when compared to other African regions. More than half of the region’s population do not have cars and many walk unreasonably long distances or make use of unreliable public transport to reach schools, clinics and employment opportunities, or deliver public services. SADC member states must increase regional mobility to ensure better access to essential services for both its public sector workers and its citizens. Demand for vehicles is high owing to long distances in many rural areas, but accessing affordable and reliable transport is out of the reach of most Southern Africans.
The COVID-19 pandemic could drive a change in consumer behaviour towards shared transportation. This might happen if commuters are willing to embrace a modal mix of physically distanced mobility to improve autonomy and flexible decision-making around transport options. Simultaneously, the rise of e-mobility could transform mobility from a preoccupation with ‘gigantism’ to electric micromobility as it lowers transportation costs while avoiding the risk of infection. Given the vast difference between South Africa’s auto industry/market and that of the region, it is clear that the advent of e-mobility is still far off for most SADC member states, unless there is an immediate and energised focus on a dramatic shift towards implementing current SADC policy. The global light-duty fleet is rapidly growing, yet light-duty EVs remain unaffordable and impractical for most Southern Africans, given their initial high upfront cost and limited access to charging stations.
The drivers of change that propel or inhibit the SADC e-mobility transition are:
- EVs’ achieving price parity with ICE vehicles by the mid-2020s in most segments, depending on SADC member states’ policy decisions, but by latest early-2030s;
- availability of cheaper, longer-range and longer-lasting EV batteries;
- appetite and capacity to increase purchases of global light-duty vehicles by 10% by 2025, 28% by 2030, and 58% by 2040 (based on existing orders with OEMs);
- lower cost of renewable energy;
- impact of the global oversupply of crude oils on petrol/diesel consumption and crude oil imports on oil-producing SADC member states;
- extent, duration and long-term impact of COVID-19 on the transport sector in shifting behaviour, purchasing patterns and access;
- nature of the commitment to improve urban air and noise quality to increase health and productivity outcomes, with a broader spillover on reducing health expenditures;
- the availability of digital infrastructure, resulting in fewer commuters because of teleworking in urban areas;
- an increase in disposable income owing to lower Levelised Costs of Transport 22 resulting from cheaper transport;
- ability to respond rapidly to an increase in electricity demand;
- second or more waves of the pandemic;
- lasting impact on the pace of economic recovery;
- extent of consumer and corporate spending;
- policies that support a green recovery and EV deployment or prop up existing ICE manufacturing;
- structural impacts of possible government incentives to maintain local automotive production;
- willingness to stop importing second-hand ICE vehicles that no longer meet carbon emission targets in their home markets;
- demand for certain types of battery materials;
- speed of replacement of government and private sector fleets with EVs;
- EV battery capacity available for controlled or vehicle-to-grid charging; and
- the impact of vehicle and battery manufacturing on the overall EV lifecycle greenhouse gas (GHG) emissions.
Towards a just regional e-volution
The world’s largest EV manufacturer, BYD, claims that ‘the world is on the cusp of a permanent shift to electric mobility’. Although many experts are sceptical of the imminent demise of ICE vehicles, the question is whether South and Southern Africa will be left behind by the rest of the world, or whether they will embrace the coming electric mobility revolution. SADC member states should muster the courage to reinvent the whole industrial regional value chain fed by its oil and coal dependency to create conditions that enable a just e-mobility transition. SADC has the opportunity window to develop a homegrown, unique version of a regional ‘Green Deal’ that re-imagines the current pandemic, economic downturn and impending climate crisis to use critical challenges embedded in the e-mobility debate as leverage points to enable systemic change and innovation.
The creation of African continental transport routes is imperative to grow internal trade and commerce. Mechanisms like the Chinese-led Belt and Road Initiative make a useful contribution to the development of highways and high-speed railways that are materially changing mobility in some Southern African countries. Although roads are essential within the overall scheme of a just e-volution and must be regionally compatible and integrated, they are not the sole solution to Southern Africa’s mobility problems. Despite great investments in building roads, many rural areas still depend on gravel roads that are not serviced by regular and reliable transport. Hence, the need for off-road micromobility solutions. What is lacking is institutions and leaders with the power and authority to drive a just regional e-volution and make it a priority area for investment.
One of the most significant impediments facing automobile manufacturers in the region is the dominance of second-hand car imports in all its members except for the SACU states.
Second-hand vehicle sales seem to satisfy the largest African car demand. Ironically, this is also the main reason why South African ICE vehicle exports are mostly focused on the global rather than the regional market. The EV market faces a similar uphill battle in the SADC region with no real champion. Whereas there are clear benefits in terms of securing greater mobility for SADC citizens through importing second-hand vehicles, given the low motorisation rate, the trade-off is locking the region into old, outdated vehicle technologies that are not fit for use in city centres owing to high emissions, while the rest of the world moves ahead. The current medium-term SADC policy is to harmonise regulations on vehicle emissions and vehicle import bans. However, the policy position is unclear on what this means for EVs.
SADC member states should propose that second-hand imports of ICE vehicles face higher import duties and taxes, with much lower duties and tax breaks for EV imports and regional e-mobility trade.
The current rates of environmental degradation, unsustainable exploitation of resources and pollution are driving new approaches to production, such as the circular economy. The UN Industrial Development Organization (UNIDO) defines the circular economy as ‘a new way of creating value, and ultimately prosperity, through extending product lifespan and relocating waste from the end of the supply chain to the beginning – in effect, using resources more efficiently by using them more than once’.
The UNIDO report outlines important circular strategies and principles, such as
- using recyclable, low-impact materials;
- designing for disassembly;
- creating smart systems for monitoring and tracking;
- ensuring lifetime extension to allow continued functionality;
- revising and upgrading parts to support continued functionality;
- taking back/capturing the second-hand value of end-of-use car parts;
- ensuring parts recovery harvesting; and
- recycling and upcycling for new innovative purposes.
SADC member states, in collaboration with the SADC Business Council and UNIDO, should develop regional circular economy automotive policies.
Electrifying Southern Africa’s mobility and beyond
The creation of new alternatives to the traditional automobile industry is crucial to enable a just e-volution. The imperative for SADC member states is to ensure all the opportunities arising through e-mobility are exploited. E-mobility should be viewed as a key catalyst at the heart of the green transition and economic recovery. The e-mobility transition is a regional problem and requires regional implementable solutions, despite possible competing interests. It is important to build capacity in institutions and among leaders to muster the courage for an alternative vision of mobility. The COVID-19-driven crisis is an opportunity to embrace a paradigm shift about how we think about the future of mobility, from monomodal to multimodal mobilities, especially off-grid micromobility LSEVs. The ever-increasing inclusion of circular economy practices in the manufacturing space provides major opportunities for innovation. This not only helps to transform the auto industry but also pivots it away from wasteful manufacturing to greener modes of production. The shift to cleaner and sustainable production also responds to the pull factors of environmentally conscious, digital technology service-orientated consumers. A just regional e-volution will contain a fluid understanding of mobility while prioritising investments directly benefitting marginalised Southern African communities living in urban townships and rural areas.
The full report can be accessed by clicking here