The short answer is because the Draft Green Transport Strategy (GTS) – for the period 2017 to 2050 was published for comment and only signed into law in Pretoria during October 2018 by Transport Minister Blade Nzimande together with his Deputy Sindisiwe Chikunga. Read on to see just when Norway introduced their incentives and why they are street s ahead of every other country in the world.
During the GTS launch, Nzimande urged both the public and private sector including the automobile manufacturers to work together with government in reducing the ever-increasing carbon dioxide emissions saying; “Through this strategy, we aim to promote green mobility to ensure that the transport sector supports the achievements of the economic growth targets whilst protecting our environment. As we know, transport is the driver of socio-economic development, but of course, our carbon footprint continues to grow at a highly unacceptable level. This thing of our continent always being behind is something that’s actually is unacceptable.”
“Minister, you have found in NAAMSA, a winning and knowledgeable partner in addressing the challenges of the green road transportation and the reducing half of the green gas emissions which contributes to environmental pollution and poor quality air in our country. The need to reduce air pollution and improve urban air quality in South Africa is imperative and we believe that this can be achieved within a relatively short space of time,” added NAAMSA Chair and Toyota SA CEO, Andrew Kirby.
Transport has been identified as the fastest growing source of greenhouse gas emissions, accounting for around 10.8% of National GHG emissions. Direct emissions from the road sector, account for 91.2% – mainly from the combustion of petrol and diesel.
In the GTS the Department of Transport says; “In terms of reducing the use of fossil fuels, the DoT needs to actively promote investment in the production of biogas, the use of CNG, LNG, fuel cell and solar powered EVs.”
Now – pedantic persons such as I will be a bit dismayed at the words “solar powered EV’s” as, strictly speaking, solar powered EV’s are NOT the answer to transport but rather a means to an end, the end being widespread adoption of battery powered Electric Vehicles!
The DoT acknowledges that the production and burning of fossil fuels is the primary cause of global warming and say that every effort needs to be made to reduce the impact of fossil fuels.
With regards to reducing the use of fossil fuels there are two paths:
- Reduce the use of fossil fuels.
- Produce cleaner fossil fuels.
One way mooted to reduce the use of fossil fuels is via a double edged sword – the one edge will add tax penalties to new fossil fuel vehicle buyers, whilst the other edge will use that money to contribute to the cost of buying green vehicles to bring the price down.
At the rate that EV prices are coming down SA will soon not need additional taxes to support the sale of EV’s.
The DoT says that the way forward to to radically grow the uptake of EVs in South Africa, the DoT, in conjunction with DTI and National Treasury, will:
- Consider removing or relaxing import duties on electric vehicles, particularly the classification of electric vehicles as luxury imports, in order to stimulate the experience and local capacity development in relation to these technologies.
- Offer producers of EV vehicle manufacturing incentives to both produce and sell affordable EVs in South Africa, for the local and export markets.
- Work with local research institutions to conduct research on EV batteries.
- Work with national, provincial and local government departments and authorities and the automobile industry to set annual targets for the uptake of electric vehicles and hybrid electric vehicles in the government vehicle fleet as well as monitoring the local content of the manufacturing of cars locally, in line with IPAP.
- Introducing the conversion of old technology vehicles, with higher emission factors to be retrofitted with EV technology.
- Consider providing Incentives related to the beneficiation of using; local resources in the manufacturing of key machinery and or components (e.g. fuel cells).
- Assist in establishing and developing local EV OEMs.
According to research conducted by SANEDI during 2014, despite the higher up front cost of an EV, the lifetime cost of the EV is below that of a conventional car as a result of the inexpensive electrical (solar) refueling. Secondly, with increased demand and production, and the advancement in battery technology, the high up-front costs are expected to decline.
South Africa’s 11-million cars fill up at 5?000 petrol stations. Importing cars and fuel costs South Africa more than R200-billion a year.
Cars emit toxic pollutants which contribute to the 20?000 deaths linked to air pollution each year.
The solution – electric cars – has not taken off in South Africa.
Let’s examine how Norway is streets ahead of the rest of the world with regards to EV Adoption which was largely driven by subsidies and incentives:
Norway is leading the way for a transition to zero emission in transport having started with their incentives in 1990.
This is first and foremost due to a substantial package of incentives developed to promote zero emission vehicles into the market. Since the early 1990’s incentives have been gradually introduced by different governments and broad coalitions of parties to speed up the transition. The Norwegian Parliament have decided on a national goal that all new cars sold by 2025 should be zero emission (electric or hydrogen). By the end of 2018 there are 200.000 registered battery electric cars (BEVs) in Norway. Battery electric and plug-in hybrid vehicles together hold a 50 % market share. The speed of the transition is closely related to policy instruments and a wide range of incentives.
The zero emissions incentives include:
- No purchase/import taxes (1990-)
- Exemption from 25% VAT on purchase (2001-)
- No annual road tax (1996-)
- No charges on toll roads or ferries (1997- 2017).
- Charges were introduced on ferries with upper limit of maximum 50% of full price (2018-)
- Charges on toll roads were introduced with upper limit of maximum 50% of full price (2019)
- Free municipal parking (1999- 2017)
- Parking fee for EVs was introduced locally with an upper limit of maximum 50% of full price (2018-)
- Access to bus lanes (2005-).
- New rules allow local authorities to limit the access to only include EVs that carry one or more passengers (2016)
- 50 % reduced company car tax (2000-2018).
- Company car tax reduction was lowered to 40% (2018-)
- Exemption from 25% VAT on leasing (2015)
- Fiscal compensation for scrapping of fossil vans when converting to a zero emission van (2018)
- Allowing holders of driver licence class B to drive electric vans class C1 (light lorrries) up to 2450 kg (2019)
The current Government has decided to keep the incentives for zero emission cars until the end of 2021. The VAT exemption for zero emission cars in Norway has been approved by EFTA Surveillance Authority (ESA) until the end of 2020. After 2021 the incentives will be revised and adjusted parallel with the market development.
The 50% rule
Since 2017 it has been up to the local governments to decide the incentives regarding access to bus lanes and free municipal parking. The Parliament has decided on implementing a 50 % rule, which means that counties and municipalities can not charge more than 50 % of the price for fossil fuel cars on ferries, public parking and toll roads. The 50 % rule is in function on county ferries, state ferries and will be introduced in toll roads during 2019. A rule of maximum 50 % parking fee at public parking for zero emission cars is expected to be implemented by many municipalities from 2019.
For longer distance trips, a well-organized charging network has to be in place. Norway has more than 10 000 publicly available charging points and more than 1500 cars can fast-charge at the same time. Even if EV owners are charging at home and manage without fast charging on a daily basis, they think it is important to have the option to fast charge when needed.
Consumers are willing to pay a higher price for the service of fast charging. On average three times more than they pay for electricity at home.
By 2017 the Norwegian Government launched a program to finance the establishment of at least two multi standard fast charging stations every 50 km on all main roads in Norway. Fast charging stations have been successfully established on all main roads with the exceptions of Finnmark and Lofoten.
The Norwegian car tax system
The overall signal from the majority of political parties is that it should always be economically beneficial to choose zero and low emission cars over high emission cars. This is obtained with «the polluter pays principle» in the car tax system. High taxes for high emission cars and lower taxes for low and zero emission cars. Introducing taxes on polluting cars can finance incentives for zero emission cars without any loss in revenues.
The Norwegian Parliament have decided on a goal that all new cars sold by 2025 should be zero (battery electric or hydrogen) emission vehicles. This is a very ambitious, but feasible goal with the right policy measures. The Parliament will reach this goal with a strengthened green tax system, not a ban.
The purchase tax for all new cars is calculated by a combination of weight, CO2 and NOx emissions. The tax is progressive, making big cars with high emissions very expensive. For the last years the purchase tax has been adjusted gradually to have more emphasis on emissions and less on weight.
If you import a 1,0 TSI Volkswagen into Norway the import price is 180 624 NOK. A similar EV is the Volkswagen e-Golf at an import price of 259 900 NOK.
AFTER applying the applicable taxes and subsidies the consumer will pay LESS for the VW e-Golf (262 300 NOK or R427 942) than the Volkswagen TSI (298 300 NOK or R486 676). Based on an exchange rate of R1.63 to the Norwegian Krone (NOK).
The progressive tax system makes most EV models cheaper to buy compared to a similar petrol model, even if the import price for EVs are much higher. This is the main reason why the Norwegian EV market is so successful compared to any other country.
You can help the quiet revolution along by installing an EV Charging station outside your Guest House, Hotel, Coffee Shop, Restaurant, Shopping Centre or in your forecourt. Contact Straton Electrical for EV Charging Station options.
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