Electric taxis to be trialled in South Africa

SA Taxi owner, Transaction Capital, plans to test electric taxis in South Africa as part of a possible long-term shift to cleaner energies. However, there are several longstanding issues that will need to be addressed before a full switch from traditional vehicles can be made, says chief executive Terry Kier.

Commenting in the group’s integrated report for the year ending 30 September 2021, Kier said SA Taxi plans to import some electric taxis to assess their viability as the first step in what will likely be a medium- to long-term project.

He added that the group will remain an active partner in facilitating the shift to electric vehicles in the minibus taxi industry, doing its part to resolve the complexities to the extent where it can, given its wide sphere of influence.

“There is a great deal of interest in electric vehicles, particularly their ability to transform public transport. However, we need to balance this excitement against the complexities our unique South African context presents to the viability of this mode of transport.

“Firstly, the tax regime and incentives for electric vehicles are not yet conducive for import; an electric taxi will cost around double that of a locally manufactured diesel minibus taxi as things stand.”

Kier said the government is currently reviewing excise duties on these vehicles, which should reduce import costs in time.

As heavier vehicles, due to the weight of batteries, electric taxis also require different towing infrastructure, he said. “There is an additional weight consideration for road infrastructure itself, considering the wide reach of the minibus taxi industry. Batteries also reduce the number of passengers compared to traditional minibus taxis.”

Financial and other considerations 

Beyond logistical considerations for the vehicles themselves, there are questions about the impact to the fiscus, said Kier.

He pointed to the fact that the minibus taxi industry is a large fuel user and pays tax on every litre bought – which means a large loss of revenue for the government should it shift electric.

“Also, as we know, electricity costs and supply are major issues in South Africa, so electrifying a fleet of minibus taxis will need to be considered in light of this constraint.

“I am not suggesting that electric taxis do not have a place in our longer-term strategy, but there are many stakeholders that must be included, and constraints considered and planned for, to successfully replace the fleet.”

This requires more than an investigative journey – it needs a practical solutions-based approach to find a way through the complexities, he said.

“Given our role in the industry, we are at the forefront of many of these discussions and are investigating key issues with our stakeholders. As always, our approach is grounded in the practical consideration of the real benefit to commuters and operators, especially as operators’ livelihoods depend on the success of their small businesses.”

Read: Eskom plans further electricity price hikes for South Africa

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Electric taxis to be trialled in South Africa