Warning over South African car factories

South Africa’s proposed electric vehicle (EV) policy is a step in the right direction for the country’s automotive sector but, if not implemented effectively, could put thousands of jobs at risk.

This is according to the National Association of Automotive Component and Allied Manufacturers CEO Renai Moothilal.

Moothilal’s comments come after Trade Minister Ebrahim Patel presented a government policy paper on electric vehicles that outlines the government’s framework for the shift away from gasoline-powered cars on Monday, 4 December.

According to this policy, South Africa intends to build electric vehicles using some of the $8.8 billion of climate funding provided by some of the world’s wealthiest nations.

Moothilal told Kaya Biz that this policy is a step in the right direction for the country’s automotive sector, which forms an integral part of South Africa’s economy.

“An electric vehicle stimulation policy is something the sector has been working towards for some time,” he said.

The automotive sector is a crucial manufacturing industry in South Africa that contributed to just under 5% of the country’s GDP in 2022.

The sector also supports more than 100,000 direct jobs.

“And if we did not find a way that allows the sector to produce the kind of products that global markets are taking, then I think it’s a fair assumption to say that there could be job losses in the future,” he warned.

This legislation could, therefore, save or even create more jobs in the sector. However, implementing the policy effectively will be critical to ensure jobs are not lost in the transition to EV manufacturing.

“Having said that, I do believe the policy announced on Monday by Minister Patel has taken into account what these different dynamics are,” Moothilal said.

“And we look forward now to implementation that allows the sector some level of stability to progress into production plans in the future.”

Moothilal explained that, for a long time, South Africa’s auto sector has been anchored on internal combustion engines.

“If you just look at, for example, auto component exports, the catalytic converter sector has been a dominant subsector for many years and without internal combustion engines, that category starts losing its attractiveness,” he said.

“So I do believe that having this technology-agnostic program but with some level of complementary or additional support towards electric vehicles is definitely a positive way to kind of protect the base that has been built up over several years.”


This article was first published by Daily Investor and is reproduced with permission.

Now read: We are not running a charity — Volkswagen boss sends big warning over South African factory

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Warning over South African car factories