Automotive Industry

The era of electro-mobility makes it grand entry boosted by tax incentives

The world watched with curiosity as Tesla’s electrical and self-driven cars appeared on the roads. Too expensive for the mass, it was seen as a luxury car. Fast-forward the recent pandemic and electro mobility has stepped up its game amidst delays in sales, vertiginous freight costs, warfare between Russia and Ukraine and an irreversible evolution of customer values associated with possessing a green vehicle... Steadily, eCars have started taking over, first with hybrid engine cars, now with fully electrical engines. Teslas and BMWs work rather with the Lithium- ion (Li-ion) battery, either with the Nickel-manganese-cobalt (NMC) model or the Nickel-cobalt-aluminium (NCA) model. More affordable cars, but still on the high range of prices, use Lithium-ferrous-phosphate (LiFePO 4) batteries. And finally, considered a greener and more durable option, comes the Electrical Hydrogen batteries.

For analyst Namrata Gotarne from GFK (Growth for Knowledge), the sale of tires globally is a major giveaway about trends in the automotive industry. She adds: “The global revenue from electric vehicle car tires jumped up by more than 1,000% between 2019 and 2022.” In the same vein, Amaris Consulting experts, Laura Colmone and David Lacroix, assert that “electric vehicles have an increasing share of the market. From January to May 2022, nearly 3 million of a 100% electrical cars were sold world- wide, compared to 1.7 million in the same period in 2021, or an increase of about 80%.

In Mauritius, as from the 1st of July 2022, as announced during the 2022-2023 Budget speech, all (EV) electrical vehicles are available duty free, while traditional ICE (Internal Combustion Engines) remain taxable. Banks have been proposing interesting schemes to individuals seeking to invest in an electrical vehicle. The tax incentive in Mauritius was cited as a laudable example in Africa by News24: “The effect of the zero-rated import duties for JLR Mauritius is that EVs now account for a massive 64% of vehicle sales, up from 12% five years ago. Mauritius also accounts for half of the total Jaguar and Land Rover EV sales in sub-Saharan Africa and is, therefore, the best-performing market in the region.

A derivative of the EV trend is the growth of sales of electrical charges. Fuel stations, car dealerships, companies and even hotels and individuals have started setting up solar or fully electrical charging stations. On the long run, the replacement of EV batteries and the question of sustainable recycling will become a major point of discussion.

While this deep transformation takes places, Mauritius is faced with a situation whereby, in 2022, 134,491 cars (38%) were over 15 years old and an additional 50,327 (14%) ranged between 10 to 15 years. The turnover of sales of vehicles grew by 18% between 2021 and 2022, from Rs 14.6 Bn to Rs 17 Bn. As per Statistics Mauritius figures, the sale of double cab pickups remained stable at a 13% yearly growth while it used to rocket at an ave- rage of 23% pre-pandemic. In addition, sales of lorries and trucks jumped to 5% while the segment of tractors and dumpers is also on the rise.

In terms of ranking, Axess Limited secured the first place with a turnover of Rs 3.4 Bn (+11%) and Rs 90 M PBT (+32%). Following close, Leal & Co. Ltd has a turnover of Rs 3.3 Bn (+9%) and the highest PBT of the ranking, Rs 337 M (+93%).

Rank Company name Turnover 2022 (Rs/Million) Profit before tax (Rs/Million) Financial year
1 AXESS LIMITED 3,366.20 89.64 6/30/22
2 LEAL & CO. LTD. 3,345.60 336.82 6/30/22
3 TOYOTA (MAURITIUS) LTD 1,964.22 116.08 3/31/22
4 CFAO MOTORS (MAURITIUS) LTD 1,702.52 51.94 3/31/22
5 UNITED MOTORS LIMITED 1,521.80 109.02 6/30/22

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