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SA vehicle manufacturers want Automotive Masterplan reviewed

Before it is implemented – because ‘the world has changed’ since it was developed.
The Toyota Corolla Cross, a hybrid petro-electric SUV that will be built in SA. Image: Supplied

South Africa’s automotive industry is pushing government to undertake an early review of the South African Automotive Masterplan, which is effective from July 1 this year, because global original equipment manufacturers (OEMs) have decided to speed up the implementation of their electromobility strategies.

Mikel Mabasa, CEO of the automotive council Naamsa, said the council will be meeting Trade, Industry and Competition Minister Ebrahim Patel this week to debate some of the regulatory reforms the industry needs.

Many global multinational automotive companies need regulatory certainty about where South Africa is moving and what its position is on electric vehicles (EVs), Mabasa said during a Indo Africa Summit panel discussion on electric vehicles on Tuesday.

“It’s a very big deal for us because we produce vehicles that in the main are going into Europe. We export 64% of what we are producing in South Africa and three out of every four vehicles that are exported go into Europe.”

European markets

“Many European countries have already given us notice so we know for a fact that in the next nine to 15 years those vehicles [produced in South Africa] will not be going into those markets, which will have massive implications for our production capacity.

“The time for procrastination has come and gone. We need to now firm up and make decisions that are firm [on EVs],” he said.

Mabasa told Moneyweb after the summit that it will be impossible for South Africa’s automotive industry to meet some of the targets agreed in the Automotive Masterplan if it did not incorporate the changes they have seen in the past two months.

He said South African automotive manufacturers would like to share their thoughts with Patel about what is happening globally, including the UK bringing forward some of the timelines they have for banning internal combustion engine (ICE) vehicles.

“We are hopeful that the conversation [with Patel] on Thursday will become a very nice catalyst for us to accelerate those conversations but it’s certainly part of our trajectory to review some of the assumptions we have made because the world has changed since we developed the Automotive Masterplan,” he said.

Read: EVs are more expensive than traditional cars

Major aims

Major targets of the Automotive Masterplan are to double employment in the automotive manufacturing industry to about 240 000 by 2035, almost double annual vehicle production from 600 00 to almost 1.4 million units, and improve local content in locally produced vehicles from 39% to 60%.

Read: Big investments coming to the auto sector in 2021

Kinetic Engineering vice chair and founder and CEO of Kinetic Green Energy & Power Solutions Ltd Sulajja Firodia Motwani said India has been very committed to electrification of the transportation sector and has decided that the route for electrification in India is not going to be through cars but through green mobility for the masses.

Motwani said the focus in India is going to be on electrification of the two-wheeler and three-wheeler sector and public transport buses.

“The government here is very keen that India takes the lead on the electrification of the two-wheeler, three-wheeler and buses because it brings the benefits of electric vehicles to the common man,” she said.

Mabasa said Motwani indicated very clearly that India’s policy is to focus on two-wheelers, three-wheelers and public transport.

“South Africa’s position is not very clear and our priority is that we need to be able to understand what Patel’s view would be in relation to his attitude towards electric vehicles in South Africa,” he said.

Jaguar Land Rover Africa product and pricing manager for South Africa and Sub-Sahara Africa Janico Dannhauser said the EV industry in South Africa is still in its infancy and accounts for less than 1% of total sales.

However, Dannhauser said most of the vehicles sourced for South Africa and the rest of Africa are out of markets that are rapidly adopting EVs as mainstream and have announced very definite stages of moving from ICE vehicles to plug-in hybrids and full electric vehicles.

SA must keep up

“It is essential that we follow that global trend because we might be left behind and might not have vehicles to sell in Africa.

“We have seen African countries, for example Mauritius, which [have] been very successful in introducing EVs.

“There is definitely a market for EVs currently with the correct duty and support. Looking to the future, that will be the option that is available to us. We can’t imagine that Africa won’t follow these global trends,” he said.

Dannhauser said Jaguar Land Rover is committed to an electric future, adding that Jaguar will be fully electric by 2025 and Land Rover will welcome six new pure electric vehicles in the next five years with the ultimate goal of being a net zero carbon business by 2039.

“That is the direction of our business. That is where we are going,” he said.

Several other global automotive manufacturers have also confirmed that they are moving towards an electromobility future.

They include BMW, which confirmed last week its Mini brand will be fully electric in the early 2030s and will be releasing the last Mini model with a combustion engine variant in 2025 – and by 2030 at least 50% of BMW’s global sales will be fully electric vehicles.

In addition, Volvo Cars confirmed earlier this month it aimed to be a fully electric car company by 2030, with all of its models only available online.

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I think the SA motor industry is dead in the water within 20 years, for two reasons:

1. The ANC will never be able to move fast enough to effectively regulate a legacy heavy industry sector which is morphing into a tech sector with the ability to change tack at will.
2. It’s unlikely our EV production volumes will justify each manufacturer building a battery factory here. So they will have to come in by ship from mainly the EU or China and, at up to 300kg a pop, that’s a substantial percentage of the mass of the finished vehicle. I can’t see how the economics could be viable, even if the local content issues could be ironed out.

Bonus problem: the ANC hasn’t even started to think about the problems of regulating autonomous driving technologies, which will arrive in the mass market with the same speed that airbags and stability control did two decades ago.

“No person shall, on a public road…”. When the person is a robot executing code written on a different continent, existing traffic law becomes obsolete. Who are they going to charge? A dev in Mumbai?

It’s been 14 years since the ANC first tried to update the K53 to bring it out of the Stone Age. To date, there still isn’t even a draft bill. Meanwhile, they have 3 – 5 years tops to regulate an autonomous driving, which is massively more complex. But they don’t have the know-how or political competence to do it, making SA an unattractive and troublesome market for any manufacturer wanting to deploy that level of tech.

Much like with current auto technology, nobody will make the whole EV and all its components. So there will be third party cell and battery providers, electric motor manufacturers just as there will be third party windscreen wiper blade manufacturers.

One big change from current tech is the concentration of single unit complete elements’ cost. The battery and motor will make up more than half the cost of an EV. Previously those would have been 20 components.

Something that puzzles me is that our car companies continue this madness of offering SA motorists what is probably a broader array of makes and models than most other countries. That has huge cost and inefficiency implications.

Our EV future? Electric minibus taxi could be interesting given the ability control / monitor their speeds and routes plus they can recharge at ranks during their dwell times.

The only certainty that the ANC can provide is that they will create more uncertainty. Stagnation is Regression and SA under the ANC has not only stagnated but regressed many years…

As you can see on the MAP within the link, the main battery making resources are found largely in Argentina and China with pockets of deposits in the US. Mining in South Africa is on a decline as policy and government priority are confusing at best.

Furthermore, as there is little economic growth in SA, there will be very low demand for electric vehicles for a long time. The only saving grace is that Africa will be slow to adapt to EVs as well which means that production plant should still operate at current but maybe subdued levels as long as the rest of africa starts to develop.

The ANC under Mbeki were warned in the 90s about the aging power stations and the looming power shortage, and they chose to ignore the warnings. . . . well, here we are with the so-called load shedding since 2008 in fact.
So I expect and foresee the same thing happening with this EV situation, once again courtesy of the marvelous ANC.

And we all pretty much found 13 years later out what President Mbeki was up against.

He had Mr. Zuma to contend with and we know what happened next.
We all watched the movie series.

South Africa moved back 100 years under Mr. Zuma’s mal-administration.

One lost generation, poverty and high unemployment.

Perhaps you’re missing my point, I’m not sure. I’m just highlighting the ineptitude of the ANC, no matter the incumbent.
Zuma was a nonentity during this time, in fact he was to be fired from the government a few years later by the same Mbeki.

And to think a full EV was developed in SA, known as the “Joule EV”.

Pity to see it fail, after not able to find a suitable commercial partner.

The right car at the wrong time, perhaps? (…too small economies of scale? Should’ve been produced elsewhere.)

Now China is leading the globe in EV production. Forget about doing it locally.

End of comments.





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