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Car Manufacturers: South Africa Must Urgently Take a Stand on Electric Cars

Car Manufacturers: South Africa Must Urgently Take a Stand on Electric Cars

The South African government is dragging its feet on electric vehicle (EV) policy, and the country’s car manufacturers have missed investment opportunities to produce new-energy vehicles as a result.

This is according to National Association of Automobile Manufacturers of South Africa (Naamsa) president Neale Hill, who said government urgently needs to announce its intentions on EV production.

“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,” the Sunday Times quoted Hill as saying.

However, the Department of Trade, Industry, and Competition’s (DTIC) acting director-general, Malebo Mabitje-Thompson, says government had made it clear that it favoured 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.

Some of the world’s most prominent vehicle manufacturers have factories in South Africa — in areas such as East London and Kariega (formerly Uitenhage).

However, without a clear policy on EV manufacturing in South Africa, the country is at risk of brands like Mercedes and Volkswagen pulling out of the country as 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.

According to Naamsa, South African consumers are expected to bear high prices, and the domestic vehicle market could contract significantly if South Africa is forced to transition to new energy vehicles without incentives.

While high pricing has significantly contributed to the slow uptake of EVs in South Africa, searches for EVs were up 134% year-on-year between January and June 2022, according to AutoTrader’s 2022 Mid-Year Industry Report.

“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.”

GreenCape highlighted the issue of high EV prices in South Africa in its 2022 Electric Vehicles Market Intelligence report.

Its survey showed that 74% of respondents were only willing to pay between R200,000 and R500,000 for an EV.

This presents a challenge as pricing for the Mini Cooper SE — the cheapest EV 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.

See Also

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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