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BEV Sales In South Africa Look Set To Double Again In 2023

Sales of battery electric vehicles breached the 500 units per year mark in South Africa for the first time ever in 2022. Last year, 502 battery electric vehicles (BEVs) were sold in South Africa, up from 218 in 2021. There has been a slow but steady increase in BEV sales in the country, punctuated by a sharp decline in 2020 at the height of the coronavirus pandemic. BEV sales look set to double again, at the very least, in 2023, but before we get to that, let’s look at the overall market to get a sense of the size of South Africa’s auto sector.

South Africa’s Automotive Business Council (NAAMSA) has just released the motor vehicle sales figures for March 2023. Last month, 50,157 new vehicles were sold in South Africa (almost all were ICE vehicles), showing a decline of 308 units, or 0.6%, from the 50,465 units sold in March  2022. Overall, out of the total reported industry sales of 50,157 vehicles, an estimated 43,801 units, or 87.3%, represented dealer sales; an estimated 6.1% represented sales to the vehicle rental industry; 4.1% were to government; and 2.5% were to industry corporate fleets.

Back to BEV sales: In the first two months of the year, 160 BEVs were sold in South Africa. This is more than the number of BEVs sold each year from 2018 to 2020, and just about 58 less than the 218 units sold in the whole of 2021. With sales figures from March not included yet, as well as the sales for rest of the year still to come, 2023 looks set to be South Africa’s best year ever for BEVs. It will most likely be the first year that we see more than 1,000 BEVs sold in a single year.

Source: NAAMSA, Lightstone Auto, 2023

Sales of BEVs have grown more than sales of plug-in hybrids. However, plug-less hybrids are starting to push some significant numbers in South Africa. This is due to the increased availability of plug-less hybrids in the country, such as the Toyota Corolla Cross hybrid. A record 4,050 plug-less hybrids were sold last year in South Africa, and they have started the new year in the same fashion, as already 990 plug-less hybrids have been sold in South Africa in just the first two months of the year.

Consumers can only buy what is available on the market, and as some OEMS push plug-less hybrids, more and more people will start to buy them — as the trend shows in the sales chart above. As you can also see, plug-less hybrids are a fairly new phenomenon in South Africa. An opportunity exists perhaps to bypass this phase and go straight into BEVs if the right environment is created in South Africa.

Breaching 1,000 BEV units sold in a year would be a big deal considering the fact that BEVs in South Africa still pay higher import duties and taxes than ICE vehicles. Yes, believe it or not, BEVs pay higher taxes and duties in South Africa in 2023! Taxes in South Africa are set at 18% for ICE imports vs. 25% for EV imports. There is also the ad valorem tax for EVs, which pushes the cost of an EV to more than 2× that of the average price of a new ICE vehicle of a similar make/model in most cases. This is probably why the majority of EV models in South Africa are the more premium models where the pricing is more competitive than in the smaller vehicle segment.

Of all the BEV models available in South Africa, only the MINI Cooper SE is priced under R1 million ($55,770). Most of the EVs available cost more than $1.6 million. However, there is some progress with the launch of more models that are in the R1.1 to 1.3 million range, such as the Volvo XC40, the incoming BMW iX1, the BMW iX3, and the i4 M Sport. There is more hope as well for even more affordable EVs, as Great Wall Motors is looking to bring the Ora Good Cat (also known as the Funky Cat in some markets) to South Africa.

Hopefully, the government can finally remove the high import duties and taxes levied on BEVs as well to help catalyse adoption.

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