South Africa could see the first locally produced electric vehicles as early as by 2026 – government white paper

  • South Africa’s Minister of Trade, Industry and Competition, Ebrahim Patel, has released a White Paper that outlines a comprehensive electric vehicle (EV) roadmap for South Africa and the structure of a suite of policy interventions tailored to the automotive industry.
  • It has been a long time coming as the country has slipped behind global trends in EV uptake as it grapples with perceived job losses in the fossil fuel powered vehicle value chain which includes 80000 petrol attendants.
  • Last week, Cabinet approved the White Paper on EVs to ensure that South Africa becomes part of the global shift from internal combustion engines to new technology vehicles.
  • Patel said South Africa could see the first locally produced electric vehicles as early as by 2026.

Patel explained that the primary goal of the White Paper is to set a course to transition the auto industry from primarily producing Internal Combustion Engine (ICE) vehicles to a dual platform that includes EVs in the production and consumption mix, alongside ICE vehicles in South Africa by 2035.

In South Africa, the barriers to EV uptake in the identified market segments include:

  • Limited public charging infrastructure
  • High capital costs associated with procuring EVs and limited market availability with regard to affordable and fit-for-purpose EVs. Most models available are pitch at the luxury end market.
  • Unreasonable customs duty of 25% that is applied to imported EVs, as well as the additional ad valorem (luxury goods) tax that is applied to imported vehicles of more than R600 000 in value.
  • Protection by government and labour unions of existing jobs in the fossil fuel vehicle value chain. They are an anomaly in most countries, but about 80 000 people in South Africa are employed as attendants at petrol stations.

“This vision is aligned with the foundational objectives outlined in the SAAM, a strategic framework implemented from 2021 to shape the nation’s automotive industry,” Patel said. Patel explained that it also aligns with changing demand in export markets and South Africa’s commitment to reducing greenhouse gases.

This White Paper presents a comprehensive, coordinated approach to the transition to minimise the perils of an uncoordinated transition. It draws on extensive international and domestic research and consultations, spanning from 2019 to 2023. “It is grounded in the principle that decarbonisation should not lead to de-industrialisation but rather be leveraged for growth, deepening the automotive value chain, fostering growth of the local industry, and ensuring the transition aligns with economic priorities,” Patel said.

Patel also highlighted the Green Paper on the advancement of new electric vehicles and battery-electric vehicles in South Africa. The draft Green Paper seeks to develop a framework upon which a comprehensive and long-term automotive industry transformation policy on new EVs can be developed.

A copy of the white has not been made available to the public on the Ministery of Trade, Industry and Competition website

Earlier in the year, GreenCape released an excellent report on the EV sector outlook in South Africa. Link to their report here: 2023 ELECTRIC VEHICLES MARKET INTELLIGENCE REPORT

Author: Bryan Groenendaal

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