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By Adriaan Kruger

Moneyweb: Freelance journalist

No escape from high fuel prices

Electric cars are not a solution yet.

A lot has been said about the petrol price reaching a new record of above R17 per litre and the possibility of further increases due to rising oil prices and a weak rand. Every household has seen its monthly fuel bill increase dramatically this year, in some cases to thousands of rand per month.

There is no real alternative other than to employ every fuel saving tip possible.

Unfortunately, electric cars are not yet a solution to the dilemma. Their disadvantages still outweigh the benefits of never having to pay for fuel again.

A recent newspaper supplement lists 10 different hybrid cars to consider, but shows only one pure electric car available in SA: the cute BMW i3.

Toyota offers its well-known Prius hybrid, as well as its Auris in hybrid form. Porsche offers a hybrid version of the four-wheel-drive Cayenne and the Panamera saloon, while Mercedes-Benz counters with its big SUV in the market for hybrid vehicles.

Lexus sells two hybrid models in SA, while BMW has the most hybrids on offer with four different models. The BMW i3 is available as a hybrid as well as a pure electric car.

The Tesla Model S, arguably the world’s most successful electric car, is not for sale in SA, nor are about 50 other electric cars offered by manufacturers such as Nissan, Renault, Volkswagen, Geely, Smart, Chevrolet and Hyundai.

Twenty minutes with a calculator and a piece of paper to list the pros and cons explains why electric cars are a huge success in only one country in the world, Norway.

In Norway, more than 50% of new cars sold so far this year are pure electric, plug-in hybrids or conventional hybrids. The Nissan Leaf and the luxury Tesla models are the biggest sellers as Norway has overcome the two greatest disadvantages of electric cars: their high cost and limited range.

The price of electric cars is subsidised by up to 50% in Norway, making them cheaper than their petrol or diesel equivalents. The government has indicated that it would like to ban sales of new fuel-driven cars as early as 2025.

With a surface area of some 325 000 square kilometres and 1.7 million of its population of 5.3 million resident in and around the capital Oslo, Norwegians don’t drive long distances. Most worthwhile destinations are within the 300 km reach of an electric car.

And electricity is cheap, with 98% of all electricity generated by hydroelectric power plants (although the country had to import electricity from Denmark in the last six months due to low rainfall, which curtailed the output of the hydroelectric plants).

The motoring environment in SA is vastly different to that of Norway. In comparison, SA is a huge country of 1.2 million square kilometres. A pure electric car with a range of 200 km to 300 km, which takes about four to eight hours to recharge, would turn a trip from Gauteng to Amanzimtoti into a travel excursion of a few days.

According to BMW, the electric i3 can also be recharged with a rapid charger at a BMW dealership in about 40 minutes. In practice, this means that a long weekend in Cape Town will include several trips through traffic to a dealership before you can start sightseeing and enjoying the good life.

And the i3 is very expensive, with a list price of nearly R640 000.

One should also remember that electricity isn’t free and, in the case of SA with its reliance on coal-fired power stations, it’s not governmentally friendly either. According to two different owner forums, the i3 consumes some 20 kW of electricity per 100 km, at a cost of nearly R40 at the local municipal rate of just less than R2 per kW. According to BMW, its 120d uses 3.9 litres of diesel per 100 km, which will cost around R61 at the current price of R15.69.

Compare the savings of R22 per 100 km of the electric car to the difference in price between the 120d at R524 000 and the i3 at R637 000 and decide whether it is worthwhile, even considering that motorists rarely achieve manufacturers’ consumption claims. The higher maintenance of a diesel vehicle is less of an issue if one includes a maintenance contract.

READ MORE: Another massive fuel price increase in the offing in October

A hybrid offers a better alternative. In the BMW stable, the hybrid versions are only slightly more expensive than the economical diesel models and offer fuel savings of around 60%. However, there is a big price difference between hybrids and petrol models – a case of charging a premium for the benefit of lower running costs.

With the Porsche Cayenne and Panamera, the difference between a hybrid and the equivalent petrol model is around R500 000. The difference in price between a hybrid and petrol-powered Toyota Auris reflects the same trend: the hybrid sells for R427 000, while the petrol versions are priced between R280 000 and R378 000. But this little hybrid still uses nearly four litres of fuel per 100 km.

It seems the best alternative is to opt for a smaller, fuel-efficient car at an affordable price until Elon Musk gets back to work and improves his batteries further.

Meanwhile, we can expect no reprieve from government in the form of lowered excise duties or reduced levies on petrol and diesel. Although it is reasonable to expect economic benefits from lower fuel prices, government has no leeway to reduce these taxes.

Reducing tax by R1 per litre will not make a huge difference to the motorist – it will still leave petrol at an expensive R16 per litre. But government cannot afford to lose even R1 in fuel tax. A reduction of R1 in fuel levies will reduce tax by more than R23 billion, while National Treasury had to increase Vat to 15% in the last budget to raise a much-needed R26 billion.

Since then, government’s finances have probably worsened with lower-than-expected tax revenues and more ugly surprises from state-owned companies. If the declaration at the end of the Jobs Summit is anything to go by, consumers might have to brace for more taxes – on things like bottles, light bulbs and electronic goods.

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