Motor companies press state on NEV policy
• Industry to put out its own discussion document
Motor companies will heap more pressure on the government over its tardiness on new-energy vehicle (NEV) policy by publishing their own discussion document later this month. Mikel Mabasa, CEO of the Automotive Business Council, said on Thursday that the document is intended to stimulate collaborative action and stave off threats to the future of the SA motor industry.
Motor companies will heap more pressure on the government over its tardiness on new energy vehicle (NEV) policy by publishing their own discussion document later this month.
Mikel Mabasa, CEO of the Automotive Business Council, said on Thursday that the document was intended to stimulate collaborative action and stave off threats to the future of the SA motor industry.
The government should have published an NEV policy white paper in October 2021, outlining strategies and incentives for electric vehicles (EV) and other forms of clean propulsion, such as hydrogen. Trade, industry & competition minister Ebrahim Patel said recently it now hoped to do so in February next year.
Industry executives have warned that delays are jeopardising the sustainability of the industry, which exports almost two-thirds of the vehicles it builds. Most of them go to countries, most in Europe, that, from 2030, will start to ban sales of vehicles using petrol- and diesel-driven internal combustion engines (ICE).
So far this year, SA has exported 326,516 vehicles. With the exception of a few C-Class EVs built by Mercedes-Benz SA, they were all ICE.
However, without clear government policy, multinational parents of SA motor companies are hesitant to manufacture new-technology products here.
Given the scale of investment required, and the life cycle of most vehicle models — ranging from seven years for cars and up to 12 for bakkies — Mabasa said time was running out for the industry to make the NEV transition before its products were no longer saleable in major overseas markets.
He said investment decisions had to be taken at least three years before production of new models began, requiring that “NEV plant decisions for the next generation of NEVs are taken now”. If not, the industry could gradually lose more than 50% of its production after 2025.
In most countries where NEV sales have flourished, they have been encouraged by generous consumer incentives and duty rebates. Patel said the government had considered a similar approach, but now favoured manufacturing incentives.
Mabasa said incentives were only one of the requirements for NEV investments. Multinationals also wanted a low logistics carbon dioxide footprint, green and low-cost energy, investment and infrastructure support, and for their SA plants to be qualityand cost-competitive against other international plants in the group.
“Logically, South African manufacturers would require at least similar support as their overseas sister plants in order to compete equally for plant decisions,” Mabasa said.
“It is for this reason that the industry has proactively worked on its proposals which will be shared with other social and business partners in order to accelerate our NEV road map without further delay.”
Mabasa, who said the discussion document would be released “by the end of December”, was speaking shortly before the release of figures showing that local sales of new cars and commercial vehicles in November totalled 49,413 — an 18.2% increase on the 41,795 of November 2021.
Aggregate 2022 sales to the end of November stood at 486,895. That was 13% more than the 428,549 at the same stage last year.
November car sales of 32,859 outdid the previous year’s 28,100 by 16.9%. For the first 11 months of 2022, the car market was 334,010, or 19.6% more than 2021’s 279,388.
Sales of light commercial vehicles, mainly bakkies and minibuses, outperformed last year by 20.8%.
Medium-sized trucks were 17.5% better, heavy trucks 15.4% and super-heavies 24.1%.
Vehicle exports were also buoyant. The motor industry shipped out 34,310 vehicles — 64.7% more than the 20,831 of November 2021.
For the year to date, exports of 326,516 are 17.9% ahead of last year’s 276,848.