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Govt in electric car push

Local car manufacturers could find electric car development more appealing, as government announces incentives to boost production.

Marin'e Jacobs
By Marin'e Jacobs
Johannesburg, 03 May 2013
Trade and industry minister Rob Davies says government will make incentives available to local vehicle manufacturers to produce electric cars.
Trade and industry minister Rob Davies says government will make incentives available to local vehicle manufacturers to produce electric cars.

Trade and industry minister Rob Davies yesterday announced government plans to give incentives to local car manufacturers to produce electric cars, under a scheme called the Electronic Vehicle Industry Road Map.

This follows the June 2012 closure of Optimal Energy, the Cape-based company behind the Joule, SA's first electric car. The firm, established in 2005, initially received strong backing from government, but was hit by a funding budget cut by the Department of Science and Technology in 2010. Its ongoing support was then reliant on sourcing backing from a big industry player, which it failed to secure.

Davies says SA is in the early stages of electric car manufacturing and he is confident in the country's ability to manufacture these types of vehicles. He admits the closure of Optimal Energy is of concern to government.

"We would like to see an SA-manufactured electric car, but realise this requires serious financial investment and there is a limit to what government can do."

Davies says the electric car incentive will not only be made available to South African companies, but also to multinational organisations that wish to manufacture electric cars in SA.

Green support

"As we become increasingly globally conscious, we realise the challenges of climate change and the impact the motoring industry has on our carbon footprint."

According to Davies, incentives are already in place to reimburse car manufacturers on their investment and bolster the local industry.

In 1995, government introduced the Motor Industry Development Programme (MIDP) - an extensive support scheme to develop a sustainable and globally competitive automotive industry. The current MIDP will be replaced this year by the Automotive Production Development Programme, expected to remain in place until 2020.

"Automotive companies can already get 20% back on their investment in car manufacturing, which includes things such as the factory, the machinery, etc," explains Davies. "That can be increased to 30% if a manufacturer raises the bar on additional aspects, such as job creation."

Manufacturers that expand into electric car production will qualify for an additional 5%, which means these manufacturers could be reimbursed for up to 35% of their total investment costs.

Davies says the Electronic Vehicle Industry Road Map would be made available for public comment in June and a committee will evaluate the public input. He says government will also engage with the industry on the programme and hopes to have it finalised by September.

The way of the future

According to Davies, SA is a vehicle manufacturing country that cannot be left behind on greening technology. "Fuel cell cars, hybrid cars and electric cars are the way of the future." He says while production of electric cars is a costly endeavour that requires serious investment, government feels it is important to encourage manufacturers to take part in greening initiatives.

As to whether SA has the infrastructure to support electric cars, Davies was also positive. "The Department of Water and Environmental Affairs is busy with a pilot programme in which they aim to establish 50 charging stations in the country by 2015. Three of them are already up and running."

Davies says the power stations forming part of the programme will run entirely on solar power, so no extra pressure will be put on the country's already strained electricity grid.

"Of course, there are two ways of charging an electric car," explains Davies. "The quick charge, that is done at the charging stations, as well as an overnight charge, where the owner will plug in the car at his home.

"The latter will obviously have an impact on the available [electricity] grid."

However, Davies says Eskom is looking at long-term solutions to accommodate electric cars on the grid. This includes the possibility of a so-called smart grid that runs entirely on solar power.

Eskom is reportedly also looking to take part in the development of programmes that will encourage South Africans to make use of electric cars by means of a preferential tariff scheme for electric vehicle use.

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