EV production in SA still a decade away — VW
Volkswagen Group Africa won’t start manufacturing electric vehicles (EVS) for about 10 more years, it says, because the African market is not ready for them.
This flies in the face of the EV white paper released by trade, industry & competition minister Ebrahim Patel, which envisages production starting in 2026.
Company’s spokesperson Andile Dlamini said this week they would continue manufacturing internal combustion engine (ICE) vehicles at the Kariega plant in Nelson Mandela Bay for the foreseeable future.
The white paper was finally released in December, after warnings that SA’S vehicle manufacturing industry was at risk if the country delayed the transition to EV production.
Europe and the UK, the markets for three out of every four vehicles coming off SA production lines, are set to ban Ice-powered vehicles by 2035.
This week, VW — one of SA’S biggest auto manufacturers — announced a R4bn investment to upgrade facilities at the Kariega plant in preparation for the 2027 launch of a third SUV model — an addition to its production lineup.
It will also introduce a test fleet of its highly successful ID.4 all-electric SUVS in South Africa in the second half of 2024, but these will go to selected customers, journalists and business partners for “customer experience and insights“, said Dlamini.
National Association of Automobile Component and Allied Manufacturers CEO Renai Moothilal agreed, saying SA did not have the supporting infrastructure to cater for EVS.
“The EV white paper announced by Patel in November also allows for transition to EV production by giving additional investment incentives. Manufacturers of EV components can get a much higher cash grant for these lines,” he said.
“This — coupled with recent investment announcements by other original equipment manufacturers, who are doing plug-in hybrids [similar battery technology to pure EVS] — means the SA production environment is already changing.
“As a relatively small producer by global standards, the South African automotive sector should maximise all opportunities for production and localisation, irrespective of technology,” Moothilal said.
He described Volkswagen’s R4bn plant upgrade as “positive“, since it positioned South Africa as the sole producer of Polos globally. He also said adding a small SUV to its production line would mean component manufacturers who supplied the plant would benefit from additional volumes, allowing them to recover from losses suffered in the wake of Covid.
“While it may not be Ev-specific, the markets these vehicles are being sold to will continue to absorb ICE vehicles in the period these vehicle platforms are planned, sustaining and growing employment and other economic benefits in South Africa,” Moothilal added.
The auto manufacturing industry contributes 4.9% to GDP, employs thousands of workers directly, and supports thousands employed throughout its value chain.