US-Iran conflict fuels demand for electric vehicles Uber (UBER.US) South Africa's EV project unexpectedly “becomes popular”

The Zhitong Finance App learned that Uber (UBER.US)'s partner in Africa's first low-cost electric vehicle project said that the conflict between the US and Iran and the resulting rise in fuel prices are significantly increasing market demand for its brand vehicles.

As a South African fleet management company cooperating with the mobility giant, Durban-based Valternative is beginning to deploy 360 electric vehicles in Johannesburg and carry out pilot operations. In the future, the pilot project will be greatly expanded in South Africa's largest cities and later extended to other metropolitan areas.

Mahomed Jeewa (Mahomed Jeewa), co-founder of Valternative, transitioned from footwear sales in 2022 to the electric delivery of two-wheelers. The impetus for his transformation came from booming distribution services during the COVID-19 pandemic and China's rapid progress in electrification.

“The pandemic has brought about changes in the South African delivery industry, just as the current conflict is driving electrification,” Jeva said in an interview. “Once South Africans — whether Uber drivers or ordinary consumers — have experienced the convenience of electric mobility, there will be no going back.”

Although Uber used to promote its electric vehicle options using environmental protection as a selling point, cost is the core driving force for both customers and the company in the South African market. Jeva revealed that the pilot project was launched in November last year. Earlier, Bolt Technology OU launched a low-cost travel service using the Bajaj Auto Ltd. (Bajaj Auto Ltd.) fuel quad bike Qute. Uber sought cooperation with Valternative to cope with competition. The model used by Valternative is the Henrey EV4 manufactured by Beijing Henrey Automobile Technology Co.

“Uber proposed a partnership to find a model that can compete with the Bolt Bajaj,” said Jeva. “They wanted to challenge themselves from a cost perspective while ensuring that the vehicle met their standards for a more comfortable ride.”

According to Jeva, Valternative is controlled by him and the co-founder, and a number of wealthy family offices in South Africa also hold some shares, but he did not disclose his exact identity.

However, privately owned electric vehicles are still rare in South Africa, and promotion faces many challenges: weak charging networks, and Uber drivers are too expensive to buy cars — imported electric vehicles are subject to 25% tariffs, while fuel vehicles are only 18%. South Africa has a huge automobile manufacturing industry, and the tariff does not apply to locally produced vehicles, but there are currently no locally produced all-electric vehicles in the country.

In response to an inquiry, Uber said, “Poor infrastructure and the high cost of electric vehicles remain the biggest challenges.”

Qute's retail price in South Africa is around R105,000 (US$6,237), and Valternative collaborated with Henrey Automobile to reduce the cost of the bike to around 190,000 rand by removing heaters and other additional components.

“The biggest challenge remains infrastructure,” Jeva explained why Uber chose the fleet model, and mentioned that the company had to set up three charging stations in the northern part of Johannesburg where the company was piloting operations. “We are pioneering this field.”

Despite this, Uber's electric car is still more expensive to travel than Bolt's Bajaj. Taking the 9.5 km distance as an example, Bolt Bajaj offered 49 rand, an Uber electric car was 82 rand, and an Uber Go was 88 rand. However, Henrey was allowed to carry two passengers, while Bolt's competition was limited to one person. Geva said that the charging cost of about 160 rand can provide a range equivalent to filling a Suzuki S-Presso of the same size with 400 r. of fuel.

However, cost cuts and limited infrastructure have had an impact on drivers. Customers and drivers complained that the vehicle lacked a heating system, and local winter temperatures might drop below zero; drivers also said charging took up valuable operating time.

“We spend a lot of time waiting for other cars to be charged at charging stations,” said Thandiwe Mlinjana (Thandiwe Mlinjana), a Johannesburg driver. “The result was that we wasted an hour waiting and couldn't take orders.”

Currently, Uber's electric car service is limited to the northern suburbs of Johannesburg and does not pick up high-yield orders to major airports and neighboring Pretoria.

Drivers pay a weekly rental fee of around 2,500 rand, which includes maintenance and insurance. Mrinjana said that her highest paid weekly turnover was about 6,200 rand. After deducting rent and charging fees of about 1,100 rand, she actually received about 2,600 rand.

“If we could buy these electric cars instead of renting them, the situation would be ten times better,” Mrinjana said.

This model is in stark contrast to Dubai. Dubai has a mature electric vehicle ecosystem, with nearly 48,000 registered electric vehicles, more than 1,800 public charging stations, and plans to make all taxis powered by hybrid, electric or hydrogen fuel by 2027.

Uber has set a goal of fully transitioning to zero-emission vehicles by 2040. But in South Africa, although electric vehicles eliminate exhaust emissions, their electricity mainly comes from coal-fired power plants.

Over the next year, Valternative plans to add six to seven new charging stations every month, introduce solar charging hubs, and install cockpit heaters for existing fleets. Geva said that in the end, the company hopes to replicate this model in eight African countries, and the next step will be to expand to Egypt, Morocco, Ghana and Côte d'Ivoire. In South Africa, the company plans to launch larger models to serve long-distance travel and the high-priced Uber category.

“We are currently seriously in short supply,” he said. “As long as Uber is given a relaxed operating space, we plan to move out of South Africa and expand into a wider market.”