The Road to Sustainable Mobility

By Greg Cress,

Sustainable Energy & e-Mobility Lead, Accenture Industry X Africa

In 2023, we are standing at the crossroads of some significant decisions to be made around the interdependency between our future energy and mobility industries in South Africa. Make the wrong decisions, and we will likely pay the price in terms of devastating economic and social consequences down the road. However, make the right decisions, and our potential to elevate South Africa’s relevance on the global mobility stage improves dramatically, and with it the prosperity of our people, businesses and economy.

The options are simple: over the next 12-18 months, we can collectively make the right choices across all industries to move towards a common vision for road transportation to be powered by sustainable energy sources and chart our course towards a preferred future. Alternatively, we could remain ignorant of this transition – or take too long to execute – and risk missing out on the global electrification, sustainable energy and new manufacturing waves currently sweeping the globe.

 The state of mobility and energy industries around the world today

The global industry of vehicular people and goods transportation will experience more disruption in the next five years than it has over the entire duration of the past one hundred years. Trailblazed by Tesla, the decision is clear: vehicles powered by electrified drivetrains ("EVs") are the future. More than 10.6m EVs were sold worldwide in 2022, up from 3.1m in 2020 and 6.6m in 2021. The year-on-year growth rate of new energy vehicles ("NEVs", which includes EVs and PHEVs (plug-in hybrid EVs) entering world markets is exponential.

We are seeing organisations gearing up for a sustainable and electrified future in all key markets and industries. These are the retail companies building solar-powered EV charging networks to attract new customers. These are the logistics companies developing plans for electric delivery van fleet management and supply chain transitions. Municipalities are reimagining what it means for citizens to move from one point to another sustainably. Crucially, in all areas where successful new eMobility-centric services are emerging, progressive national and local Government policies in the form of supply-side and demand-side incentives have been the catalysts.

South Africa cannot afford to wait

Currently, South Africa is in the infancy stage of this energy and mobility transition. But if you know where to look, you will notice the "green" shoots of change emerging:

1.  OEMs have started bringing in their flagship NEV models – but, at present, only for those that can afford them
2. There is a blossoming NEV charging infrastructure – but still nowhere near large enough to remove the term ‘range anxiety’ from the lexicon of EV drivers
3. There are innovations in vehicle and asset finance packages from some banks to combine NEV purchases with home solar installations
4. While Independent Power Producers (IPPs) are scrambling to bring additional capacity to a constrained national electricity grid with the scrapping of the 100MW SSEG cap, large gated communities and estates are looking at solutions to become energy independent altogether

It may be tempting – even easy – to dismiss this global electrification trend as "10 years away” for South Africa or use SA’s current loadshedding challenges the reasons as to why we cannot pursue an industry transition to an eMobility and clean fuels-centric future. It is precisely for these reasons that South Africa has the opportunity to address these challenges by acting now. Organisations across all industries will be affected by this transition – the question, is who will be the winners and who will be the losers?

Reaching the sustainable mobility equilibrium by 2030

To understand the breadth and depth of the industry transformation ahead, we have defined a vision for 2030 called the sustainable mobility equilibrium – the full potential of which will only be reached once the intersection of three fundamental industry forces reach maturity: In-demand and affordable e-mobility products and services; pervasive and accessible charging infrastructure; and sustainable, decentralised energy generation as well as battery & mineral recycling.

Some of the moves the industry should consider today

In-demand and affordable e-Mobility Products and Services: OEMs should think about how they will create awareness and educational content around the benefits of driving a NEV for their prospective customers and how they will engage them viscerally through a blend of digital and retail channels to stimulate the demand. Dealerships should bring an immersive “new energy vehicle” experience to their customers, even if they don't have any new or used NEVs to sell yet – they will come. Financial institutions should think about how they are looking holistically at sustainable energy financing (combining NEV and residential solar into dual finance packages). Retailers should consider how they are attracting customers with EVs to their location by offering innovative EV charging solutions at shopping centres. Logistics and supply chain companies should think about the positive impact on their bottom line (and the environment) that a transition to an electric delivery fleet will make.

Pervasive and accessible charging Infrastructure: Fuel retailers should be considering what a reimagined customer experience means at their service stations – even before the inevitable wave of EVs arrives – and their future loyalty strategy around EV charging. Municipalities should consider developing the necessary EV infrastructure support policies for SMEs willing to invest in building sub-urban and even rural charging stations. There is also a great opportunity for IPPs to work with the power utility to ensure projected high capacity/high-density EV use areas have the necessary decentralised and diversified energy. Small-scale solar energy generation installers should be looking to become accredited with OEMs and financial institutions to ensure EV owners are set up for vehicle-to-home feed-in solutions in their homes.

Sustainable, decentralised energy generation and recycling: as OEMs start to look at NEV manufacturing in South Africa, as part of that transition they should be considering how and where to power as much of their supply chains as possible from renewables. OEMs should also be planning for a future 8-10 years from now where batteries from their used NEVs can be extracted, repurposed and recycled into large-scale Battery Energy Storage System (BESS) locations.

 It's NOW or (NEV)er…

It is becoming clearer how the various industry sectors (energy, retail, financial, logistics and manufacturing) will all have a significant, symbiotic role to play for SA to reach this sustainable mobility equilibrium by 2030. But we need to start making moves now so that we don’t get left behind. As positive as the President's SONA announcement was about the R1.5 trillion investment into South Africa's just energy transition over the next five years, the opportunity cost to our economy will be equally devastating if we take too long to get this transition underway.