Flx EV to launch electric minibus taxis in SA next year

From the newsletter

A South African electric minibus startup, Flx EV, is piloting a project to introduce 40 electric minibus taxis in Cape Town next year. The company aims to roll out electric minibuses, provide charging infrastructure, and offer financing solutions. As the first of its kind in the minibus taxi industry, the project aims to demonstrate the viability of electric minibus taxis.

• The company plans to import the electric minibuses from the Chinese manufacturer Higer. 

• The electric minibus will have a 200km range and can fast-charge to 80% in 45–50 minutes.

More details

• The South African minibus taxi industry is big, accounting for about 80% of public transportation and transporting an estimated 15 million people daily, generating R50 billion in annual revenue. 

• However, the sector is mainly powered by ICE vehicles, and Flx EV wants to take the risk and venture where none have tried.

• Led by Justin Coetzee, who also heads GoMetro, a company specialising in transport data analysis and fleet management, Flx EV plans to leverage his expertise to develop a successful business model for electrifying the taxi industry.

• The company plans to establish charging hubs at taxi ranks and utilise GoMetro's expertise to optimise operations and provide fleet management tools. 

• They are also considering offering financing options and battery leasing to taxi owners.

• Flx EV's charging hubs will be strategically located at existing taxi ranks to minimise disruption. They will also develop fast-charging technology that allows taxis to charge during downtime between trips. 

• Furthermore, they will use data to optimise routes and charging schedules to reduce congestion and maximise efficiency.

• Initially, Flx EV will import electric minibuses from China but intends to explore local assembly to reduce costs. 

• Currently, the electric minibus is almost twice the price of a comparable diesel minibus due to a 25% import duty and a 23.5% ad valorem duty on EVs. 

• Flx EV hopes to capitalise on government incentives through the Automotive Production and Development Programme, which encourages local vehicle production.

• It is worth noting that South Africa's taxi industry, dominated by minibuses, is quite different from other African countries like Kenya and Nigeria, where cars primarily serve as taxis. 

• This difference stems from variations in urban planning, commuting patterns, and the structure of their public transport systems, with South Africa's system being more geared towards long-distance commuting and having a more developed public transport structure.

Our take

• EVs are here to stay and will disrupt the transportation business. The economics of EVs guarantee better returns to operators due to lower fuel and maintenance costs. 

• Being in the commercial sector, EVs will attract many new entrepreneurs willing to try the business, and Flx EV's option of providing charging infrastructure and financing will make it easier for operators to afford the transition.

• The minibus taxi sector is big in South Africa and presents a perfect opportunity for Flx EV to venture in as a first market mover. The government is developing policies geared towards incentivising EVs, further supporting the company's efforts.

• The transition to EVs in Africa will take a different shape compared to the developed world. While the developed world will likely lead with personal car adoption as the first step, in Africa, the public transport sector will be the first adopter. This is due to the high cost of EVs, making their economic value more apparent in commercial use cases.