One of my first projects as a “baby economist” was a feasibility study and impact assessment for the Cape Town Grand Prix company advocating for the grand prix in Cape Town. Being young and naïve, I proudly announced to my friends and family that any day now the Grand Prix would be in Cape Town.
Close to two decades later, some of my friends and family will enjoy Formula-E this weekend. A day out in the sun, but not quite the Alonso they’d expected years ago…
These days, however, I can't seem to be in any project without hearing “what about EVs?”.
I understand why. In Paris recently I was struck (almost literally due to their silence) by the dominance of electric vehicles - both scooters (larger than the ones we had as teens) and cars (smaller than even my Aygo). In one of the places I work, there’s an autonomous electric vehicle moving people up and down town. In others, waste collection is now done using electric trucks. And of course many cities are moving to electric buses for their BRT fleet. The European Parliament has formally approved a law to effectively ban the sale of new petrol- and diesel-powered cars in the European Union in twelve years' time.
Three thoughts usually temper the discussion in South Africa:
How does our energy look? Currently, we have an unreliable supply that is insufficient to meet demand - can our system cope with additional demand?. Additionally, coal and diesel are primarily used - so is going EV really "greener"? (more than simply shifting the location of pollutants).
The cost. Even though there have been attempts to disrupt the scooter and small vehicle markets in South Africa, most available EVs are still in the high end market.
Is it possible to travel between cities? Despite advances in battery technology, consumers still have concerns with the charging time to "refuel" on longer distances.
EVs as a New Source of Energy Revenue
With the energy crisis and declining energy revenue, municipalities are looking for new sources of income.
Cape Town, with its declining energy revenue and ongoing energy crisis, is no exception.
EVs could provide an opportunity for the city to generate revenue through the sale of energy. As EVs consume energy, they could purchase it from the City, creating a new stream of income. This is reflected in the City’s recently published Infrastructure Strategy, which shows energy consumption declining as a trend, and EVs as a potential source of additional energy demand.
EVs and Mobility
The role of EVs in mobility is also important for Cape Town's future. The revenue incentive from EVs should not act against mobility objectives to reduce congestion and encourage a shift from cars to public transport, and investment in public transport, for example.
Positioning support for EVs in segments of the mobility system that compliment public transport requires investment at a policy and infrastructure level. For example, EVs can and should be supported for electric buses, delivery vehicles, and potentially in city-owned fleet where it makes financial sense to do so, as this would also reduce emissions, contributing to the city's low-carbon targets. More emphasis should be placed on supporting these users, than providing infrastructure to private vehicle owners shifting from fuel cars to EVs - for those, the emphasis should be on shifting from cars to public and non-motorised transport, as much as possible
Taking the gap
The production of EV products is increasing, making them more accessible and affordable. As the market matures, we are likely to see adoption in specific segments:
High end luxury market, who will demand reliable charging at home and at private real estate facilities such as business parks. The role of the City here is in ensuring grid capacity, where we may see intermediaries in the provision of charging stations.
Lower end delivery services (possibly bikes and small vehicles), but this will only occur if there is reliable charging through improvements to the energy system broadly, or provided by companies such as Takealot, Checkers, Uber, etc. Similarly, incentive to shift to EVs will sit at the vehicle owner level, which is currently a diverse and distributed market who may not realise any fuel cost savings. Innovative financing products from the banking sector or vehicle manufacturers targeting drivers directly may be required to see real change here. This is also a market where in high density economic centres the City could also provide charging infrastructure combined with other driver facilities such as ablutions, further encouraging their adoption.
Hop-on-hop off people movers within larger private estates, shopping malls precincts, and more established CIDs. These systems will likely be operated by companies aiming to promote EVs in partnership with the facilities and precincts locate in, or who operate other transport services. They’re also likely to invest in their own charging infrastructure, but will rely on access to space and grid capacity from their private partners.
Public transport. Golden Arrow and Jammie Shuttle have electric vehicles in their fleet and the City has previously piloted EVs. However, for any large-scale roll out of EVs for all bus fleets or incentive or financing scheme for minibus taxis, National Treasury would need to rethink the 35% import tax on electric vehicles and exempt specific vehicles such as buses, or support a national programme large enough to warrant a local production line. We may even see minibus taxi’s cross the finish line first, with efforts underway to test EVs with users, understand energy demands better, and work towards local manufacturing capacity. This would create an interesting new relationship between the City and minibus taxis, who are currently frequently engaged in conflict, should the sector shift to being a large energy consumer on the City’s revenue books…
EVs have the potential to play a significant role in the future of Cape Town. They offer a new source of energy revenue and contribute to reducing the carbon emissions of our mobility options - if these two objectives are planned jointly and not as competing objectives.
In the meantime, wouldn’t be cool to try this little guy out around the Formula-E track?
Or maybe you’d prefer to try out one of these, and see a future where food deliveries and school runs, and trips to the co-working space from the train station are by e-bike?
Also read: Can the transition to EVs be just? From page 13 in the SACN Q2 newsletter.