BMW in talks to build electric cars in South Africa
BMW wants to manufacture electric cars in South Africa, and the German carmaker is in discussions with government around policy regarding electric vehicles (EVs), Sunday Times reports.
BMW South Africa CEO Peter van Binsbergen believes the move would help BMW secure long-term production in the country.
“We are encouraged that [trade, industry and competition] minister Ebrahim Patel is focusing on that and are in discussions about the strategy and policy. We see this as a necessity,” Sunday Times quoted Van Binsbergen as saying.
The Department of Trade, Industry, and Competition published an Auto Green Paper in May 2021. The document aimed to establish a policy foundation for EVs.
“Further work to complement stakeholder consultations was commissioned to analyse what other countries are doing to support EVs and exploring opportunities in related component production,” it told Sunday Times.
It added that stakeholders continue to explore, evaluate, and cost measures to support the transition to electricity-powered mobility.
Van Binsbergen said BMW is updating its Rosslyn facility to allow for the flexibility it would need to manufacture EVs eventually.
However, he added that a policy decision is required before BMW can take its business case for EV manufacturing in South Africa to the carmaker’s Munich headquarters.
EV uptake in South Africa has been slow, although interest in electric cars started to surge recently.
Data from South African vehicle classifieds website AutoTrader shows that potential car buyers are increasingly interested in buying second-hand electric vehicles.
According to its 2022 Mid-Year Industry Report, searches for EVs were up 134% year-on-year between January and June.
During the period, the most-searched EVs on the classified platform included the BMW i3, Porsche Taycan, and various Audi E-Tron models.
“Interest in new energy cars is also being fuelled locally, helped in good measure by the introduction of several new EVs domestically and the launch of the first locally-built hybrid electric car — the Toyota Corolla Cross,” AutoTrader said.
“Given the global move to EVs, local car manufacturing strategies have begun to shift.”
However, pricing has significantly contributed to the slow uptake of EVs in South Africa.
GreenCape’s 2022 Electric Vehicles Market Intelligence report revealed that 74% of its EV price survey respondents were only willing to pay between R200,000 and R500,00 for an EV.
This presents a challenge as pricing for the Mini Cooper SE — the cheapest EV you can buy in South Africa — starts at R658,000.
“All EV models currently in the SA market cost more than R450,000, which is out of reach of most SA vehicle buyers,” GreenCape said.
GreenCape further explained that the existing range of EVs available in South Africa does not cater to the emerging middle-class and middle-income groups.
While companies like Volkswagen plan to manufacture more affordable EV models, they haven’t confirmed whether they will land in South Africa.
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