Affordable electric vehicles gain traction as petrol costs bite

You can also listen to this podcast on iono.fm here.

JEREMY MAGGS: South Africans are showing growing interest in electric vehicles (EVs), but interest I think doesn’t always translate into sales. Now you would have read about Absa and the Chinese electric vehicle giant BYD officially launching BYD Finance.

It is, as I understand it, a dedicated finance ecosystem aimed at making new energy vehicles more accessible in South Africa.

But, and here’s the rub, research still identifying high prices, limited affordable models and electricity constraints as major barriers. So it begs the question: can innovative finance genuinely move EVs from niche to mainstream?

Read:

Absa disrupts EV finance with BYD partnership
BYD looking at establishing SA battery manufacturing plant

Let’s have a conversation now with Alan Quinn, who is chief product and innovation officer at Cars.co.za. It’s a South African online automotive marketplace and motoring information platform. Alan, welcome to you and thanks for talking to us.

So is finance really the big obstacle or are electric vehicles just too expensive, beyond the reach of the ordinary South African?

ALAN QUINN: The short answer is yes. Finance is an obstacle, but finance is a part of a car-buying equation for the vast majority of people. Maybe, Jeremy, you know people who buy cars for cash, I know very few of them. None of us know very few of them. Finance is part of buying cars.

But really, if you look at EVs’ history over the last few years, go back two or three years, you couldn’t find an EV for less than a million rand. They just didn’t exist because mainly the legacy manufacturers are playing in that space. These were beautiful cars, they were fast cars, but they were just way too expensive for this market.

The Chinese at that time – and I’ll talk about the Chinese a bit more later – were really focusing on establishing a foothold in your mid-range SUV (sport utility vehicle) and especially petrol vehicles there, which they have done.

ADVERTISEMENT

CONTINUE READING BELOW

Now, if you look at EV technology, Tesla might be the poster child, but the best EV technology actually comes out of China because they produce it for their own market, for their own reasons.

So now that has become a focus over the last 12 months, bringing in lower price EVs. The real game changer came from BYD with the Dolphin Surf, and now Geely with the E2, that has come in at a very different price point.

You’re talking about just above R300 000, and that makes it a very different equation for most car buyers, because the market of car buyers at the R300 000 to R500 000 mark is vastly more than it is at over a million rand.

JEREMY MAGGS: Alan, is there a genuine demand at this point in South Africa? Now, I know that Cars.co.za is seeing more EV searches, but the real test is how many of those become actual purchasers.

ALAN QUINN: The short answer is yes, there is a lot more demand in searches, but a lot more demand about any EVs in total. Because if you look at EVs as part of an NEV (new energy vehicle) question, plug-in hybrids and so on, there’s just the introduction of the technology, it feels very new to us.

It’s not new if you’re in Europe, in another market, but it feels very new to us.

That’s because OEMs (original equipment manufacturers) are waking up to this technology and are pushing it and putting it in our face a lot more often, which is increasing the interest.

When it comes to buying, if you had asked me three or four months ago, I would have said no. I would have been reasonably cynical about that. But then Donald Trump started the greatest geography lesson in history.

Who knew where the Strait of Hormuz was a few months ago, and that has fundamentally changed our market.

I think this is a seminal moment, because the price of petrol and the not just the price of petrol, but we now regard petrol in the same way we regarded electricity a few years ago. It’s volatile, isn’t it? It’s expensive. We now dislike it and that has really changed it.

Read:

Electric vehicles could soon be cheaper than petrol cars in Africa
High cost of fuel versus cheaper electric vehicles …

If you look at the running costs of EVs, they are strikingly better. All those factors coming together in 2026, I think is what’s driving more interest, which is driving demand.

The Dolphin Surf, there was one month there where the Dolphin Surf outsold the Kia Picanto as a new car. Now, you would never have predicted that a year ago, and it happened. We have Donald Trump to thank for all of that (chuckle).

ADVERTISEMENT:

CONTINUE READING BELOW

JEREMY MAGGS: There is, of course, risk though. Two things spring to mind. One is the charging network, is it ready for wider adoption beyond urban motorists? Secondly, dealers themselves, would they be equipped well enough to service, repair and value these vehicles?

ALAN QUINN: Charging network, quite frankly, no. I stand here in my house near Sandton, I don’t know where my nearest EV charger is, and most people don’t.

So to try and sell it based on charging networks, and unfortunately, most of the market has tried to sell it about range anxiety and charging networks, I just don’t think that’s a viable sale in 2026 and won’t be for a couple of years.

But I think there are other niches and that’s where we’re seeing the growth coming. There are plenty of people who are two-car families. I might need one car to drive to Dullstroom at the weekend, but I don’t need two cars to drive to Dullstroom.

If the operating cost of my second car, the daily or whatever you want to call it, the commute, the kids car, if the operating cost of that … then that’s a viable conversation.

I have a friend who lives at Midstream Estate in Midrand, and he said that he’s seeing a lot of Dolphins Surfs driving around. Why? Because people are using them for their dailies. So that is a niche and not a small niche.

Read:

Eskom, BYD sign deal to advance SA’s EV sector
SA’s solar leak – and how homes and EVs could help fix the grid
How SA missed the chance to launch its home-grown electric vehicle

The second I would say is if you’re a chief financial officer and someone brought you a proposition to buy EVs into your fleet a year ago, you would have shrugged and moved on to the next subject.

Now, because of the petrol price, because of the operating cost, because of model availability and manufacturers buying it, you will listen to that. Those cars, remember there are a lot of fleet vehicles like commercial vehicles, but there are also a lot of cars out there that act as fleet vehicles as well.

Those cars have a defined radius, they come back to a home base every night and they have tracking software that [monitors] their drivers, no less. For all of those, now suddenly I think in these niches you will start to grow a demand, and those niches will gradually expand into the future.

ADVERTISEMENT:

CONTINUE READING BELOW

JEREMY MAGGS: Let me U-turn back to this BYD-Absa tie-up, in actual rands and cents then, Alan, what does this partnership change for a buyer?

ALAN QUINN: Banks work with OEMs all the time. There’s a word they call it, subvention. That’s not subversion. That’s a very different word. Subvention is banks working with them to put deals together because everyone likes to feel that theirs is a special deal.

There is no such thing as prime -1%. That is a subvention mechanism where they’re both working together to make sure that their finance is cheaper.

All of that has happened and BYD will work with Absa very closely. They are both quality organisations and they’ll do that.

What I think is interesting about that is they’re talking a lot about what’s called GFV or guaranteed future value, which is a terribly marketed concept in the industry, because what on earth does GFV mean? It’s basically like a rental contract instead of a finance contract.

In a rental contract, you don’t worry about what the vehicle is worth in the future and for the GFV, you don’t worry about what the vehicle is worth in the future. The one difference between a rental contract and a GFV.

If you have to buy your own insurance, you have to pay for your own tyres, and you also have to fill the little container for the windscreen washer. So that’s the only difference. Other than that, you take the keys, you drive around for a few years, you give them back, like a rental contract.

Read:

Affordable Chinese brands help drive SA’s NEV transition
Electric vehicle sales rise, but Sars rules stuck in the petrol era

Now what that takes away is anxiety over what this car is going to be worth in three years’ time. For EVs, that’s a real anxiety because the supply and demand mechanisms that dictate price in three years’ time are just too rudimentary, too unknown.

So that market needs to grow. There needs to be data that informs that market so that people know how to buy and sell and trade these vehicles in three years’ time, because the market is so small, that doesn’t exist. But GFV takes that away, and that’s a very promising development.

JEREMY MAGGS: Alan Quinn, thank you very much indeed, chief product and innovation officer at Cars.co.za.

#Affordable #electric #vehicles #gain #traction #petrol #costs #bite