SA NEVS TO FINALLY GET THE GREEN LIGHT?

A recent White Paper has outlined the South African Government’s road map to stimulate local production and the uptake of new energy vehicles

Following warning shots from Volkswagen and Ford about the long-term sustainability of the South African automotive manufacturing industry, Minister for Trade and Industry Ebrahim Patel recently unveiled a White Paper that will address the issues at hand. VW and Ford had noted failing surrounding infrastructure and slow acknowledgement by the government of the need to keep pace with the global shift towards new energy vehicles (NEV).

At a media briefing on 4 December last year, Patel commented, “It is a product of constructive engagement with stakeholders, including within government, industry and labour, to chart a viable and sustainable transition path for the industry.” He continued, “South Africa’s automobile industry plays a critical role in economic growth and supports thousands of jobs, and the country is also endowed with mineral resources that position it to become a key and strategic player in EV value chains.”

Considering its production and export capacity, it has become imperative that South Africa repositions its outdated EV policies to adapt to the evolving automotive landscape.

The 16 key points outlined in the planned transition to become a production centre for NEVS include the development of a regional electric battery value chain, an increase in investment and funding, the implementation of a temporary reduction in import duties for batteries used in domestically produced vehicles and the securing of a duty-free export market for associated components. Also pertinent are energy reforms and the commercialisation of hydrogen production, together with urgent restructuring of network industries like freight rail and ports.

The plan further advocates leveraging research-and-development tax incentives to deepen domestic value addition, refurbishing the rail line between Gauteng and Ngqura to enhance cost competitiveness, developing an electric vehicle (EV) certification programme for skills development in collaboration with the industry, and establishing a framework for fleets to transition to locally produced NEVS. Additionally, the strategy emphasises scaling up investment in charging infrastructure, supporting increased grid capacity for EV uptake, considering consumer incentives for EV adoption and evaluating the need for economic regulation on EV charging.

The financial aspects of the White Paper are expected to be highlighted in Finance Minister Enoch Godongwana’s Budget Speech in February.