How to power the EV transition
Like a duck cruising apparently effortlessly across a lake, its frantic underwater paddling hidden from view, there’s much more to the electric vehicle (EV) transition than meets the eye.
Take catalytic converters, those handy devices that cut harmful exhaust emissions from petrol and diesel internal combustion engines (ICE). What will happen to them when there are no emissions left to cut?
South Africa, with its plentiful supplies of platinum, is one of the world’s leading converter producers. Exports last year were worth R34bn. That was 48.3% of the combined value of all components exports. The next biggest contributor was engine parts at R4.7bn, or 6.7%.
With EV sales accelerating, declining demand for converters is already being felt locally. Renai Moothilal, director of the National Association of Automotive Component & Allied Manufacturers, says he’s aware of at least three converter companies planning to close in the coming months. Others are likely to follow.
Though there are opportunities for platinum to find new uses in EV vehicle manufacturing — for example in the manufacture of fuel cells — the transition will take time. It’s another reason, says Moothilal, for the government to make up its mind on EV policy so all sectors of the industry can plan for the future.
If not, he says the decline in converter demand could wipe out the local motor industry’s trade surplus. Last year, the combined surplus for vehicle and components was R19.6bn. Converter exports alone are worth nearly double that.
“The long-term outlook for global [converter] demand and local production is not bright,” he says. “The industry surplus is definitely at risk.”
There’s also urgent need for action on EV charging infrastructure. While the immediate sales emphasis in South Africa is on hybrid EVs, whose batteries are continuously recharged by an accompanying ICE, other EVs require plug-in charging. While many buyers have installed home chargers for their short-distance commuting needs, the lack of public chargers puts off many potential buyers.
Winstone Jordaan, CEO of automotive charging specialist GridCars, says there are 276 public charging stations around the country (others put the number at more than 300). That’s about one station for every five plug-in EVs on South African roads. In the US, he says, the ratio is about one to 30, and in Europe about one to 20.
Impressive as the local ratio sounds, it’s not much comfort for motorists needing power top-ups outside city centres and away from the N1 and N3 national roads. Jordaan says more major routes will soon get similar coverage “we do an entire highway at once, not piecemeal as well as more towns.
Audi and Mercedes-Benz are among companies investing heavily to improve access to charging capacity around South Africa. Fuel companies, which are shifting their emphasis to the broader energy field, are also considering putting EV chargers alongside petrol and diesel pumps at some service stations.
This all raises the question: which comes first, more vehicles or more charging stations? Is it worth investing in charging infrastructure when there are so few cars to use it? On the other hand, will buyers commit to EVs if they see so little infrastructure? Who should go out on a limb: investors or customers?
The National Association of Automobile Manufacturers of South Africa says joint research with the department of trade, industry & competition suggests that up to 262,000 public charging stations will eventually be required for complete national coverage. While demand for such coverage is a long way off, the study estimates that to achieve it by 2035 (the end date for current government automotive policy), would cost about R30.8bn in 2021 rand terms.
That’s assuming the charging stations are supplied from the national electricity grid. If they are solarpowered, which seems a more reliable option, the bill could be R95.5bn.
It’s no wonder the government is wondering where all the money will come from for the EV transition.