Not only is the cost of charging an electric vehicle significantly lower than filling up a petrol car, with savings ranging from 80-90%. This is due to the higher energy efficiency of electric motors compared to internal combustion engines.
Owners of Electric Vehicles also ‘escape’ the taxes levied on fuel in South Africa – a conundrum that our government also needs to solve before EV’s become the norm.
“It has been our experience that after install home EV Chargers for clients that they then look at rooftop Solar in order to squeeze even more savings out of their Electric Vehicle,” says Straton Solar. Grid Tie only solar installations offer the most bang for the buck with some equating to a 20 year fixed kilowatt hour price of less than 70c per kWh. With the advent of Vehicle to Grid vehicles consumers will be able to use their vehicle battery for home and loadshedding use – further increasing the savings and convenience of switching to electric.
South African EV Drivers save on (avoid?) these taxes:
- The general fuel levy (GFL) – Currently around R3.93 per liter, this is a major source of government revenue used to fund road construction and maintenance.
- The Road Accident Fund (RAF) levy – Currently around R2.18 per liter, this levy funds the country’s no-fault accident compensation scheme.
- The carbon tax – Introduced in 2019, this tax is added to the fuel price to discourage greenhouse gas emissions. As EVs produce zero direct emissions, their owners will avoid this tax.
- The environmental levy on CO2 emissions – This levy is charged on new vehicles based on their carbon dioxide emissions, which EVs do not incur.
However, the government is considering new taxes or levies to replace the revenue lost from fewer fuel sales as EV adoption increases. Proposals include a “traffic-management levy” on vehicle license fees and fuel sales, as well as potentially increasing the annual carbon tax rate. So in summary, EV owners currently avoid a significant amount of fuel-related taxes, but the government is exploring new ways to recoup this lost revenue as the EV market grows in South Africa.
In total, these fuel-related taxes can add up to over R6 per liter that EV owners in South Africa can avoid paying. For the average South African driver who consumes around 2,000 liters of fuel per year, this represents an annual savings of over R12,000 in taxes.
For clarification the main taxes and levies included in the South African fuel price are:
- General Fuel Levy (GFL): R3.96 per litre, representing around 17% of the petrol price.
- Road Accident Fund (RAF) Levy: R2.18 per litre, representing around 11% of the petrol price.
- Together, the GFL and RAF levy make up around 28% of the retail petrol price in South Africa.
Other taxes and levies included are:
- Customs and excise duty: 4 cents per litre
- Slate levy: 21.92 cents per litre
- Petroleum products levy: 0.33 cents per litre
In total, around R6.40 per litre, or 25.1% of the retail petrol price, goes towards some form of tax or levy when buying petrol in South Africa. The taxes and levies have increased significantly over the past decade, with the GFL and RAF levy combined growing from R4.09 per litre in 2014/15 to R7.52 per litre in 2023/24.
Video: What South African taxes do Electric Vehicle owners enjoy avoiding over fuel taxes?
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