Gen Zs drive EV demand in South Africa

From the newsletter

The South African automotive sector is experiencing a fascinating transformation. Despite a decline in new vehicle sales, the market is witnessing growth in used car purchases and a growing interest in EVs, particularly among Gen Z. 

• Though still nascent, the EV market is showing signs of taking off and the shift is largely fueled by innovative and flexible financing models that cater to younger generations.

• At the same time, affordability concerns and the rising cost of new vehicles are driving the increased demand for used cars.

• And millennials still account for a bigger share of 40% of new vehicle purchases.

More details

• Gen Z's share of new vehicle asset finance purchases grew to 10.9% from 7.9% in Q2 2023 and Baby Boomers' share dropped from 8.3% to 7%, reflecting a generational shift in vehicle financing.

• Together with Millennials, they are reshaping the market with their preferences for sustainability, flexibility, and digital-first experiences.

• While still a small segment, the growth in EV and hybrid sales indicates a shift towards sustainable transportation and will be driven by younger generations.

Our take 

• To succeed in the market, EV sellers need a strategy that caters to both young and old. This means offering diverse purchasing options, from traditional buying to subscriptions, and prioritising consumer financing to make EVs accessible to younger buyers with limited upfront capital. Partnering with fintech companies can unlock innovative solutions like pay-as-you-drive models.

• Simultaneously, building a robust charging infrastructure across the country is crucial to address range anxiety, especially for older generations.