Good news for electric cars in South Africa

Minister of Trade, Industry and Competition Ebrahim Patel has announced that his department will finalise its electric vehicle (EV) policy by March 2024.

The minister announced the deadline during a recent Parliamentary meeting.

Patel said the department will finalise its EV strategy by the end of the current financial year, which runs until 31 March 2024.

The news comes after motor industry leaders — including the National Association of Automobile Manufacturers of South Africa (Naamsa) — collectively called upon government to announce its intentions for EV production in the country urgently.

Among the complainants was Naamsa president Neale Hill, who said manufacturers would not be guaranteed to invest in South Africa and government dragging its feet won’t help the issue.

“South Africa has already missed the upcoming round of EV model investment, for which the decision date is three years before start of production, and realistically will only be considered for the next round of investment around 2030,” said Hill.

The Department of Trade, Industry, and Competition’s acting director-general, Malebo Mabitje-Thompson, said government has made it clear that it favours a manufacturing-focused approach.

“We want to ensure that what the transition doesn’t do is undo all the benefits we have built together as partners,” she said in reference to car manufacturers.

Some of the world’s most well-known vehicle manufacturers produce cars in South Africa, creating many jobs in areas such as East London and Kariega (formerly Uitenhage).

However, without a clear policy on EV manufacturing in South Africa, the country risks losing brands like Mercedes and Volkswagen as the rest of the world transitions to EVs.

“We don’t want to risk South Africa becoming the last place where internal combustion engines [ICEs] are produced while other markets are busy with EVs,” Mabitje-Thompson said.

RMB corporate client segment head Nana Phiri and Wesbank CEO Ghana Msibi said they were encouraged by Minister Patel’s commitment to finalising the EV strategy.

Msibi said South Africa has a unique opportunity to lead the continent in mitigating climate change given its rich natural resources, including coal, natural gas, wind, and solar power.

“The country’s automotive industry is one of the largest in Africa and a significant contributor to the domestic economy so it needs to transition quickly and successfully to new energy vehicles (NEVs),” he said.

Msibi noted that Africa currently has a small share in global vehicle manufacturing, despite the potential to add value to the minerals required for battery electric vehicles (BEVs).

Wesbank said NEVs face other challenges in gaining wider acceptance among South African consumers.

These include constraints on product availability, a lack of awareness around range anxiety and the cost of ownership, uncertainties around the reliability of electricity supply, and a limited understanding of the technology.

“The lack of education among customers on the benefits of NEVs, particularly BEVs, remains a significant challenge for all stakeholders,” said Msibi.

“Another primary obstacle to wider adoption of NEVs in South Africa has been the significant initial investment required to establish a reliable and efficient national charging infrastructure.”

Msibi said although they see noteworthy growth in hybrids being financed, the sale of pure electric vehicles remains slow.

“The hurdle we face in finalising policies and regulations pertaining to the long-term future and sustainability of the South African automotive industry is an imperative one to overcome, to enable us to make decisions with confidence and kickstart progress.”

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Good news for electric cars in South Africa