Shift to electric vehicles set to create challenges for SA’s car industry
No immediate threat, but be prepared
THE ACCELERATING shift towards electric vehicles and intelligent mobility solutions is set to create challenges for South Africa’s automotive industry.
This shift was highlighted at the world premiere of the new Nissan Leaf in Japan earlier this month and in recent announcements by the governments of the UK, Netherlands, Norway, India and France, committing to halt the sale of traditional internal combustion engine cars in the future.
Daniele Schillaci, the executive vice president global marketing and sales, zero emission vehicle and battery business for Nissan Motor Company, said at the world premiere of the new Nissan Leaf electric vehicle in Japan that electric vehicles would drive the future of Nissan and the automotive industry.
His view was supported by Volvo, announcing that all new cars it launched globally from 2019 onwards would be partially or completely battery-powered, while Jaguar Land Rover announced this month that all its new models would be electrified to some degree from 2020.
The first generation Nissan Leaf is the world’s best-selling electric vehicle and has achieved sales of almost 300 000.
However, less than 100 Leaf sales have been achieved in South Africa since 2011.
Patience Dumisani, the head of product communications at Nissan South Africa, said the new Leaf would be officially launched later this year at the Tokyo motor show, where the global roll-out plan would be announced.
Discussion
Dumisani said that the Nissan local product planning team was in discussion with its parent company about plans for introduction of the Leaf in southern Africa and looking at it being launched into this market in the last quarter of next year, but this had not yet been confirmed.
Andrew Kirby, the president and chief executive of Toyota South Africa, last month summarised the issues confronting South Africa, because of the shift towards electric vehicles.
Kirby stressed the needs in South Africa were slightly different to the rest of the world and challenges for electric vehicles included that they were currently expensive, the range and the time it took to recharge electric vehicles, and the fact South Africa had very little charging infrastructure to charge electric vehicles.
Nissan believes enhancements to the new Leaf will negate the range anxiety of consumers, particularly as range of the new Leaf has been extended to 400km, a 40 percent improvement on the previous model, and also means the vehicles needs to be recharged less frequently.
Schillaci, who described Nissan’s new Leaf as the icon of the company’s intelligent mobility strategy, confirmed that Nissan was developing a low cost electric vehicle. However, he stressed this product was only for the Chinese market.
Mike Whitfield, the chief executive of Nissan Group Africa and president of the National Association of Automobile Manufacturers of South Africa (Naamsa), said last month that there were many schools of thought about the adoption of electric vehicles in Africa, but one was that the continent had little automotive investment legacy and there could be a technology leap to electric vehicles.
Thomas Schaefer, the chairperson and managing director of Volkswagen Group South Africa, agrees with this viewpoint. Schaefer told Business Report that Africa did not have any automotive industry or suppliers.
Straight away
“So they go from nothing to the mobile phone. They don’t have to optimise the landline and keep the jobs in the landline business. They could go to electric mobility straight away,” he said. Whitfield said the top selling vehicle in Japan was the Nissan e-Note, which had a petrol engine that did nothing else but charge the battery.
“It’s not a hybrid, it’s an electric car. Its got a range of 400km to 500km and those are the sort of solutions for Africa. The big thing is that cost has to come down because it is still high. One of the big limitations is creating the charging infrastructure and people have the range anxiety.
“But the range (anxiety issue) is going to be a thing of the past a lot sooner than people think. A 600km range is not far off and very few of us need that,” he said.
Engineering News reported this month that energy giant Shell was exploring the possibility of adding electric vehicle charging points to its forecourts in a number of countries.
Although the demand for electric vehicles in South Africa was still in its formative stages, Shell together with it partners would be testing the South African market over the coming years, it said.
Nico Vermeulen, the director of Naamsa, does not anticipate that there would be any immediate threat to South Africa’s automotive industry, because of the shift to electric vehicles.
Vermeulen said the internal combustion engine would continue to feature quite prominently in South Africa and Africa for some years.
However, Vermeulen said there was no doubt the trend in the developed world was to move in the direction of electric and hybrid vehicles and perhaps other environmentally friendly vehicles, such as gas and compressed air, and South Africa need to have a policy and approach to the inevitable advent of environmentally friendly products.
No threat
Renai Moothilal, the executive director of the National Association of Automotive Component and Allied Manufacturers (Naacam), also did not believe there was any immediate threat to component manufacturers from their products becoming redundant.
Moothilal expected the nature of component production to continue to service the internal combustion engine market.
However, he said Naacam had a few members who had started to get involved not only in the electric vehicle market but the energy efficient and hybrid markets with a view to supplying into the global market.
“In the longer term there will be a move to electric vehicles, particularly in developed markets, but South Africa has a fair amount of product servicing the internal combustion engine assembly base in the country,” he said.
Toyota South Africa’s Andrew Kirby stressed the planned ban on the sale of petrol and diesel vehicles in several European countries “is not going to be an on-off switch”. He said electric vehicles were more suited to light bodies and shorter commute type vehicles, but heavier vehicles needed to be more robust, which was where hybrid vehicles made a lot of sense.
But Kirby admitted South Africa needed to consider how it made sure it was part of the global supply chain and built vehicles in volumes and were still able to supply export markets.