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.”
“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.
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%.
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.