A bi-lateral country project by the Electric Mission in South Africa and the Norwegian Electric Vehicle Association has engaged the South African government, including National Treasury and the Department of Trade, Industry and Competition, on how to make electric vehicles (EVs) more accessible to new-vehicle buyers.

These changes should also serve to grow the pre-owned EV market.

Electric Mission executive director Hiten Parmar says it is possible to tweak existing vehicle tax structures in South Africa to make EVs a more attractive buy, as has been the case in Norway.

In short, it could be possible to structure the ad-valorem tax and environment taxes, such as carbon tax, levied on EVs and internal combustion engine (ICE) vehicles in such a manner that it balances out the market between the new and old technology.

Parmar is positive the bi-lateral project’s proposed recipe could ensure effective EV uptake, without impacting government’s revenue on new-vehicle sales.

“We already know of the existing import duty differences between EVs and ICE vehicles. This would, however, be raised automatically in the next round of trade agreement negotiations. We rather opted to focus on what was already in place that could shift the market.

“This is not a subsidy scheme, but an incentive to broaden the appeal of zero-emission vehicles to new-vehicle buyers.”

Parmar says the EV market in South Africa has been growing year-on-year since 2013, but at a much slower rate than internationally – in both developed and developing regions.

Boosting local EV adoption is vital, as it will stimulate South Africa’s existing vehicle manufacturers towards local production of EVs for both the local and export markets.

Parmar says while the proposal would initially make all EVs, including imported vehicles, more attractive to buyers, the end goal is to create demand for locally produced EVs and their associated South African-made components.

With the global shift away from fossil fuels, South Africa must keep pace with international developments in order to safeguard its local automotive industry and its associated employment, he notes, especially as the country’s primary export markets of the UK and Europe have already announced phase-out targets for ICE vehicles.

Parmar says the proposed tax adjustments have international references, including Norway as a global leader in EV adoption, with the Nordic country using its taxation system “to emphasise the polluter-pays principle” in order to promote cleaner technologies.

“Norway's EV fleet has grown tremendously in a decade, and not by making EVs cheap by comparison to ICEs,” says Norwegian Electric Vehicle Association secretary-general Christina Bu.

“Instead, the focus has instead been to near-equalise the pricing for the consumer, making it equally attractive to opt for EVs.

“The result has seen a tremendous shift in consumer purchasing to EVs year-on-year.”

New-vehicle sales in Norway are now consistently above 90% in favour of EVs, with the goal for this being 100% zero-emission vehicles by next year.

Bu was recently featured in the inaugural TIME100 Climate, a list by Time Magazine of 2024's most influential leaders driving business to real climate action.