When will electric cars be cheaper?
The largest hurdle faced by consumers looking to get into the world of electromobility is the initial cost of purchase. Exorbitant import taxes, lack of government support and inherent costs of the technology are currently countering the cost-saving benefits of EV ownership. EV prices will drop, but it's still tough to say when we will see this reduction in the initial purchase prices.
It seems that each and every manufacturer is launching a new electric car or introducing a sub-brand that caters solely for EVs (Electric Vehicles). Indeed, it is the way that the automotive landscape is developing and international pressure to reduce carbon footprints and safeguard fossil fuel reserves has seen an almighty push towards electrification. As such, many manufacturers are gearing up for a future where electric vehicles are a mainstay and a common part of daily life. Unfortunately, this technology is still rather expensive and out of reach for the average man on the street.
Related: Can you buy second-hand electric cars?
Manufacturers are aware of this fact and are desperately trying to counter this by introducing cheaper variants of their EV offerings. While you may see other markets being offered more cost-effective options, one has to remember that South Africa poses some unique challenges with regard to the general travel behaviours in the local market. South Africans travel considerably further than those in many other countries and the limited rages of the cheaper EVs would not prove useful locally.
Government not helping
Aside from the ever-present concerns around the stability of the South African charging infrastructure, the local government is also not budging on its willingness to assist with subsidies or incentives for consumers who wish to buy into electrification. The receiver also imposes a higher import tax on EVs with a tax of 25% levied as opposed to the 18% imposed on ICE vehicles. As soon as we are able to rectify this aspect, the prices of EVs will reduce, albeit slightly.
Tech development
EVs are currently enjoying a rapid and extensive development phase which is seeing substantial amounts of money being invested into the research and development of the technology. This aggressive development process is seeing manufacturers and suppliers work on methods of reducing the costs of components and improving their functionality at the same time. We can expect to see more affordable EVs in the future but this will naturally be offset by the rate of inflation. Whether the prices will drop significantly remains to be seen.
Depreciation
Electric cars, as with most other forms of moveable assets, depreciate the instant they leave the dealership. Electric cars are currently enjoying a period of high demand and as such are not depreciating as fast as other modes of transport. It will take a few years for EVs to experience the same rate of depreciation as ICE vehicle as the selection of used EVs grow. Expect to start seeing used EVs popping up for more affordable amounts in the next 3 to 4 years.
There's no need to worry about the longevity of EVs at this early stage of the game as most will come with an 8-year warranty on the battery and continuous development is being done on battery technology to provide more affordable methods of battery replacement. This will help ensure that EV chassis' are able to enjoy extended lives in the future.
