Government’s new energy vehicle policy delayed further

Timeframe has shifted out by another six months – Toyota South Africa.
The Toyota Corolla Cross hybrid SUV went into production locally with the expectation that a government support package would follow. Image: Supplied

The government’s drive to develop a support framework for new energy vehicles (NEVs) that includes the production of electric vehicles in South Africa and the components that go into them appears to have run out of … er, energy.

Minister of Trade, Industry and Competition Ebrahim Patel in May 2021 published a Green Paper on the advancement of new energy vehicles in South Africa.


The aim was for the strategy to be finalised within 90 days following the gazetting of the Green Paper to allow the policy proposals to be submitted to cabinet for consideration by October 2021.

This target was missed and it is unclear when the policy proposals will be submitted to cabinet for consideration.

Toyota South Africa Motors (TSAM) president and CEO Andrew Kirby said during an annual State of the Motor Industry presentation last week there is no concrete direction yet from the government about the policy but the automotive industry is expecting an announcement this year.

Big question marks

Kirby admitted there are big question marks around how and when the South African government will put in place the final regulations and incentive programme.

“We are communicating very actively with the dtic [Department of Trade, Industry and Competition] in discussing what are pragmatic solutions for the industry.

“Last year we would have said that we would have forecast some clear direction by the end of the first quarter of this year.

“I think that timeframe has unfortunately now moved and I think it’s going to take us another six months before we see anything concrete,” he said.

President Cyril Ramaphosa’s only direct mention of the automotive industry in his State of the Nation Address (Sona) last week was that investments in electric vehicles and hydrogen will equip South Africa to meet the global clean energy future.

Commenting on the Sona, automotive business council Naamsa said despite “the sluggish policy reforms” for NEVs, electric, plug-in hybrid and traditional hybrid vehicle sales increased by 176.5% from 324 units sold in 2020 to 896 units sold in 2021.

Naamsa said the finalisation of policies that will promote NEV production in South Africa is one of the industry’s immediate challenges.

“The South African automotive industry’s new energy vehicle trajectory depends on sound policy interventions and infrastructure development,” it said.

“The government’s impetus will go a long way in assisting the industry efforts to grow the local production as set out in the SA Automotive Masterplan 2035, supporting the South African automotive exports global competitiveness and the move to greener mobility.”

Pricing, accessibility

The urgent need for certainty about government policy is obvious considering that Kirby confirmed in October 2021 at a celebration of the launch of production of the hybrid Toyota Cross that TSAM is anticipating that the government will provide a support package to reduce the price of NEVs to make them more accessible and to drive volumes.

Kirby added that TSAM had set the “pricing accordingly” for the hybrid Toyota Cross so that hybrid technology can become more accessible.

On Thursday (February 10) Kirby said: “What we wanted to avoid was launching the Toyota Cross hybrid to cover the costs and at the same margin as the petrol model and then have a situation where incentives came into play and those prices were reduced.”


TSAM senior vice president of sales and marketing Leon Theron said Toyota and Lexus had a combined 68% share of the NEV market in South Africa in 2021, which jumped to 77% when it launched the Toyota Cross.

“So we are already a serious player in new energy vehicles. That is going to be our primary focus this year … [and will be] spearheaded by Toyota Cross,” said Theron.

“By 2025, on passenger vehicles in terms of new energy vehicles, we want to have a 40% mix. That is how aggressive we are with new energy vehicles going forward.

“Our roadmap is very clear on new energy vehicles. It’s hybrid, plug-in hybrid, and battery electric will follow,” he said.

Diverse portfolio of NEVs

Toyota Motor Corporation (TMC) chief scientist and CEO of the Toyota Research Institute Dr Gill Pratt said Toyota believes the best strategy today for reducing greenhouse gases is to offer a diverse portfolio of hybrid vehicles, plug-in hybrid vehicles, battery electric vehicles and fuel cell vehicles.

Pratt said a diverse approach is more likely to work, which is why TMC president Akio Toyoda in December 2021 announced that Toyota will invest about $70 billion globally in electrified vehicles, including hybrid-petrol vehicles, plug-in hybrid electric vehicles, fuel cell electric vehicles and battery electric vehicles (BEVs).

Akio said Toyota also plans to roll out 30 BEV models by 2030 and Lexus is aiming for 100% BEV sales globally by 2035.


Future NEV policy certainty is also important to the achievement of the targets in the SA Automotive Masterplan.

Kirby stressed it is key that components are localised as the production of NEVs in South Africa increases, to create demand in the market to enable the industry to justify the investment in localising the manufacturing.

He said this ultimately creates the manufacturing value addition and jobs and economic benefits in the country.

Kirby said it is extremely important to think about the economic value that can be brought to the African continent.

“If we simply move forward with the replacement approach, which means we import all the new technology vehicles, we obviously lose out on the industrialisation opportunities for bringing new energy vehicle technology to the continent.

“We are working as a company on how we can firstly localise the componentry on the continent.

“Batteries are still in a phase where there are many technology breakthroughs that will materialise but there are other components within NEV cars that are not going to change: the traction motor, the inverter, the wiring harnesses, energy management systems.

“That is where our focus is. How do we localise those on the continent, create the demand and sales on the continent of Africa so that we can justify those investment decisions and thereby make sure that we are participating in this significant change?” he said.

Sales expectations for 2022

Kirby is forecasting that new vehicle sales will grow by 16.3% to a total of 540 000 units in 2022.

“What is really important about this number is that it is higher than what we achieved in 2019, which means as an auto industry in South Africa we would have fully recovered from the Covid-19 environment.

“But compared to where we were six years before it’s still a softer market but we do think that over the next few years we will recover to that 600 000 level figure,” he said.

Total new vehicle sales increased by 22% to 464 469 units in 2021 compared to the previous year.

Kirby said the 2022 forecast is based on a variety of socioeconomic factors that do not bode well for the local motor industry, including the rising interest rate cycle, the strain taken by the agricultural sector due to heavy rainfall, the muted tourism recovery and potential market instability owing to ANC leadership elections and National Bargaining Forum (NBF) wage negotiations.

However, Kirby said the forecast is “constrained” and the industry could even sell more vehicles if the economy performs better than expected or if supply issues in the automotive supply chain are resolved.



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A lot is being said for the past decade about ‘Green Hydrogen” and fuel cell vehicles.

Thus far virtually all manufacturers considered this but only 3 put models out for purchase – Honda, Toyota and Hyundai.

Currently only the Hyundai Nexo and Toyota Mirai are on sale and no more than 25000 have been sold — EVER.

The fact is that the fuel production efficiency of an electric vehicle = 95% (charging the battery) but for hydrogen vehicles this is 52% .

After the losses that go with the conversion from fuel to motive power is taken into account then the overall energy efficiencies drop to 73% for electric vehicles and 22% for Hydrogeb fuel cell vehicles.

No wonder then that the large companies are not really interested in this concept.

But of course for the under initiated like some of our leaders this sounds such an attractive idea to throw taxpayers money after!!

The Tripartite Alliance uses taxpayer money to run a support network for the Tripartite Alliance through the motor manufacturing industry.

The special treatment, import tariffs, and direct subsidies are supposed to create jobs for Cosatu members. The taxpayers are forced, by Luthuli House, to make an involuntary donation to Cosatu members whenever they buy a car, and when they use that car to earn a taxable income.

End of comments.




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