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South Africa ‘painfully slow’ in drafting new-energy vehicle policy – Naamsa

14th October 2022

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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The South African government is “moving painfully slowly” in finalising its policy on new-energy vehicles (NEVs), says Naamsa | The Automotive Business Council CEO Mikel Mabasa.

Since the unveiling of the Green Paper on NEVs in May last year, “we have not seen meaningful progress” in the finalisation of the next step, which is the drafting of a White Paper, he notes.

Mabasa says the deadlines determined by Europe and the UK to no longer allow the sale of new traditional internal combustion engine vehicles are 2035 and 2030 respectively, which “is a real challenge” for South Africa.

“We are nervous about 2030 – Europe is our biggest customer.”

Exports account for 64% of vehicle production in South Africa, with 77% of this number going to Europe and the UK.

“We are becoming irritators of those moving slowly,” says Mabasa.

In contrast to South Africa, countries such as China and India, and even countries within Africa, such as Morocco, are moving “at aircraft speed” to develop NEV policies, he adds.

“The world is not waiting for South Africa to wake up.”

Mabasa says the South African automotive industry is also in danger of losing significant ground to other African countries in terms of vehicle production.

South Africa was responsible for 62.3% of vehicle assembly in Africa in 2020, but that number has slipped to 53%.

“This will soon dip to below 50%,” says Mabasa. “Egypt and Morocco want to eat our lunch.”

He warns that South Africa is also bleeding engineering skills to assembly operations in Africa and the rest of the world.

Demand vs Supply
Mabasa notes that the Department of Trade, Industry and Competition has signalled its intent to offer a production-based incentive as a first phase of its NEV support programme.

However, while Naamsa welcomes that initiative, “we also want to make sure that demand is stimulated”, he says.

Mabasa says it is important for the local industry to “socialise” NEV technology, “to get as many people as possible to adopt it”, which is only possible if demand is stimulated in a “firm and compelling” manner.

“[The South African auto industry] can produce NEVs on one hand, but what if no one buys what we are producing?

“We cannot only rely on export-led business.”

NEVs made up 0.19% of the total new- vehicle market in South Africa in 2021.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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