Rising fuel costs, EVs and the shift in second-hand car markets

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SIMON BROWN: I’m chatting with Alan Quinn, chief innovation and product officer at Cars.co.za. Alan, appreciate the time. We are getting R30 petrol, we are getting R30 diesel – both terrifying numbers, no halfway about it.

Data from yourselves, Cars.co.za, show that people aren’t buying fewer cars; they’re just maybe looking for more fuel-efficient cars.

ALAN QUINN: I think total cost of ownership is a conversation in 2026 that we never expected – and that’s been driven by events in the Gulf and the price of fuel. It’s traumatic visiting a petrol station these days, isn’t it?

SIMON BROWN: It absolutely is. My wife has a diesel car; it’s an absolute shocker to fill it. I imagine it’s stuff like smaller engines, but are we also seeing some new energy alternatives, maybe hybrids coming in?

ALAN QUINN: It’s interesting. New energy vehicles have been around for years, but cheaper models came in towards the back half of last year – the BYD Dolphin, sort of the BYD E2, now the Cherry Q’s launching around the R300 000 to R400 000 price range. That’s an interesting price range because it’s very affordable for South Africans.

But the EV running cost is roughly a third of the fuel cost. It’s about a third the petrol equivalent of a small car. And so it’s become a conversation for certain people that we would never have expected before this year.

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SIMON BROWN: That’s just it. The prices are coming down, and I’ve had a look at some of those BYDs. They really, really are cheap. They’re also cheap to run, they’re also cheap to maintain.

I’m a complete novice here – I still have only ICE [internal combustion] vehicles, but servicing and the like is at longer intervals and cheaper because there are no exploding parts in the engine.

ALAN QUINN: It really is, because you have an electric engine. By nature they’re just more reliable than ICE engines and with fewer moving parts. The service intervals are much wider. And so you benefit on the fuel cost if you want to call it ‘fuel’ – and then you also benefit on the servicing cost.

What you do have an unknown with is depreciation, because the depreciation cost is unknown. When we look at our data, the supply of EVs still exceeds real demand.

So there’s a lot of interest around EVs, and I think that’s because it’s a new technology and people are trying to get their heads around it, which is good.

But ultimately it’s not fulfilling into demand. And when supply exceeds demand, it can only read one thing. Your listeners will know economics better than me.

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SIMON BROWN: Yes, absolutely. And then there are the hybrids, our hybrids, because one of the worries is range anxiety.

Although apparently the N3 is now getting charging stations all over, that range anxiety is fading away, but I imagine a lot of it is perhaps more emotional than actually practical.

Hybrid kind of fits the spot. Does hybrid fit in terms of fuel efficiency and lower cost?

ALAN QUINN: It really does. Hybrid technology depends on the hybrid. There are plug-in hybrids and then there are traditional hybrids.

Plug-in hybrid is the newer technology and it’s the one that fills the gap. Most plug-in hybrids give you somewhere between 50 and 80 kilometres a day, so you can do your daily on electric, which means that EV running cost is for Monday to Friday.

And should you choose to go and visit your aunt in Nelspruit at the weekend, then you can go and do that and not worry about range.

So it has the benefits of both, it doesn’t have that beautiful service interval efficiency that we spoke of earlier, but it has that.

And so I think plug-in hybrid is just a technology that will really take off as more models become available and people get their heads around it because, if you use it in the way I described, then you’re getting phenomenal fuel efficiency figures.

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SIMON BROWN: And 50 to 80 kilometres –  that’s plenty. For some people it’s a week, for some people it’s a day; but you can charge overnight at home.

How much of this has been driven by the prices coming down? My sense is this really is again Chinese cars at the forefront, certainly the BYDs.

ALAN QUINN: Yes, BYD especially. It’s a beautiful technology; they’re beautiful cars. One must understand that in Beijing and in China EVs – it’s not that they’re trying to take over the world using EVs and so on; it’s an imperative given the scale of their cities and the pollution of their cities.

The Chinese invented and invested in EV technologies and plug-in hybrid technologies because they had to.

You really see the benefits coming out 10 years later, because they had to back then. Remember the Beijing Olympics? They had to shut down the city so they didn’t kill the athletes, right?

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Now you’re seeing benefits coming out of that technology because they do lead the world because they’ve invested in it further than anybody else has.

SIMON BROWN: Also, if I’m looking for a car, a R300 000 or R400 000 Chinese new vehicle with 85% of the bells and whistles – in some cases even more – really stacks up against the second-hand car. They’re not just encroaching on the new; I imagine they’re encroaching on the second-hand as well.

ALAN QUINN: And the exact dynamic you described has disrupted the market, because the second-hand car market is huge in this country. I mean, the average car on our road is more than 10 years old, according to AA figures.

Think of the vibrancy of the second-hand market, and now suddenly we have a dynamic of these cars coming in at a cheap price point and exactly the dynamic you describe. Why  buy a second-hand legacy brand that’s three or four years old when I can buy all these bells and whistles and latest gadgetry and technology for new?

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People are doing that, and what it’s causing is a sort of a flux in the second-hand market that we didn’t expect, where there’s less demand in 2026 for a second-hand car, second-hand vehicles, than what we would have expected  there to be.

That is causing problems for the big players in the markets, for the WeBuyCars and so on, who’ve actually cited these reasons for their results.

SIMON BROWN: Yes, I was going to say WeBuyCars. We can take a look at that share price – it’s an ouch share price. It’ll shake out, but it’s hurting at the moment.

We’ll leave it there. Alan Quinn, chief innovation product officer at Cars.co.za, appreciate the time.

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