Here are the key sectors driving EV adoption

September 01, 2025

From the newsletter

South Africa’s EV market is being driven by four main sectors, according to a report by GreenCape, a consultancy company. The sectors are electric passenger vehicles, electric buses for mass transport, freight and logistics electrification, and last-mile deliveries. The country’s record-breaking sales have happened in defiance of various hurdles, not least power poverty.

  • Unlike in Europe, America or China, markets in Africa are primarily shaped by solutions that address public needs rather than private ownership. The biggest opportunities lie in the commercial sector, particularly in mass transport, ride-hailing, deliveries and freight.

  • South African companies have been slow to tap into this lucrative segment. Meanwhile, over a dozen Chinese OEMs have already entered the market, scaling rapidly to secure a competitive edge and larger market share.

More details

  • The electric passenger vehicle market is currently the largest in South Africa, valued at R2.8 billion ($150 million) in 2024. With under 8 million passenger vehicles on the road, most of which are ICE, there is significant room for EV growth. However, high purchase costs remain a major barrier, pointing to a strong potential market for EV financing solutions.

  • Electric buses are the second-largest EV segment, with over 66,000 buses registered and a 2024 market value of R1.1 billion ($50–60 million). Despite slow electrification by Golden Arrow Bus Services and MyCiTi, 2.1 million households rely on buses as their primary transport. This demand creates a strong case for scaling up investments in electric mass transit solutions.

  • B2B logistics and last-mile delivery EVs remain an emerging market, valued at R250 million ($13–14 million) in 2024, with fewer than 200 vehicles in operation. Projections indicate growth to 1,000 vehicles by 2030, driven by the boom in e-commerce. The shift away from ICE vehicles, especially in urban areas, is creating opportunities for two- and three-wheel EVs to dominate the last-mile delivery space.

  • South Africa’s strong track record in tech adoption creates a favourable environment for EV business growth, especially in public transport. With 42.4 million people relying on buses and minibus taxis, electrifying fleets could significantly cut fuel costs for operators. However, slow fleet rollouts, such as Golden Arrow’s partial BYD bus delivery, highlight the need for OEM diversification to speed up adoption.

  • The logistics sector is beginning to embrace EVs to reduce operational costs and meet sustainability goals. Notable moves include DHL South Africa’s pilot with Unilever and Volvo Trucks, and UPD’s deployment of 42 electric vans in early 2025. This opens opportunities to target major players like Kuehne + Nagel, DB Schenker, DSV, Bidvest International Logistics, and Aramex for fleet electrification.

  • South Africa’s e-commerce market is projected to hit $16.3 billion (R307 billion) by 2030, creating strong demand for efficient last-mile delivery solutions. Electric two- and three-wheelers, offered by companies like Green Riders, MellowVans, and Green Scooter, are already proving viable through partnerships with major retailers like Takealot. The success of this business model in Kenya suggests high replication potential in the South African market.

Our take

  • Pitching EV adoption to B2B and B2C companies can be challenging due to the high upfront cost of electric vehicles. However, financial institutions like Absa South Africa and WesBank are stepping in to bridge this gap through tailored financing solutions.

  • Leasing models could provide a practical alternative for companies hesitant to commit to outright purchases. This approach has already proven effective in Kenya, where Equator Mobility has successfully implemented EV leasing for various businesses.

  • While South Africa offers a clear case study, these opportunities are not unique to its market. The same strategies and focus areas can be applied across other African countries to accelerate EV adoption.