South African wholesaler UPD adds 42 electric vans to fleet

From the newsletter

United Pharmaceutical Distributors (UPD), a South African wholesale distributor of pharmaceutical products, has added 42 electric Maxus eDeliver 3 panel vans to its fleet. The vans were imported by electric mobility start-up Everlectric. UPD will roll out the vans in the provinces of Gauteng and Western Cape. 

• UPD plans to add a further 36 electric vans to its fleet in later this year. The vans will be deployed in Gauteng, which is South Africa’s most populous province.

• The company plans to also deploy an undisclosed number of electric vans in 2026. That rollout will include coastal cities Gqeberha in Port Elizabeth and Durban in KwaZulu-Natal province.

More details

• The vans launched by the distributor were made by Chinese automaker SAIC. UPD has a fleet of 100 independently owned vehicles across the country and plans to convert all its diesel-powered vehicles into electric-powered vehicles.

• UPD joins the growing number of companies in South Africa that are transitioning their fleet to electric vehicles as part of their environmental goals. Eskom, the country’s national electricity utility, last year launched charging stations at its site and bought 20 EVs, even as it targets to fully transition its fleet by 2040.

• The South African firms mirror a continent-wide trend, where corporate entities are increasingly buying EVs to reduce their carbon footprint. This effort is partly led by government agencies such as Kenya Power (Kenya), KenGen (Kenya), Ethio Telecom (Ethiopia) and National Automotive Design and Development Council (Nigeria) which are either buying EVs or setting up charging stations.

• Further, most EV sales in Africa mainly consist of bicycles, motorcycles and passenger cars. Electric commercial vehicles such as cargo vans and trucks are not as common. However, some Africa-born start-ups such as MellowVans have picked up the mantle and are making electric cargo vehicles that are used for commercial activities.

• Shoprite, a leading South African retailer, has shown that electric commercial vehicles can work, especially as prices continue to drop. The retailer became the first South African company in 2022 to pilot a heavy-duty fully-electric truck as part of its fleet. The truck has a range of 350 km on full charge.

• The African logistics market, specifically the third-party logistic segment, is projected to reach a size of $35.61 billion in 2025 and hit $38.39 billion by 2029. This is a big and lucrative market that will require clean transport solutions, a gap which EVs are well positioned to fill.

Our take

• South Africa charges an import duty of 25% on EVs which is higher compared to 18% for ICEs. This has made the cost of EVs in the country costlier, particularly commercial vehicles like trucks. For South Africa to hasten the use of commercial EVs, it has to lower its import taxes. 

• The upfront cost of electric trucks, buses and vans is high. Most firms in Africa simply don’t have the capital to make such investments. But leasing provides a viable alternative. The model is already being successfully used by electric bus manufacturer BasiGo in Kenya. 

• Commercial vehicles often travel longer distances than passenger vehicles. It means that range anxiety is an even bigger issue for them. But the majority of African countries still do not have enough charging stations. The establishment of sufficient charging stations should be a priority for African governments.