Govt lays groundwork for local production of EVs

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 09 Feb 2024
South Africa is a step closer to introducing the new energy vehicle policy.
South Africa is a step closer to introducing the new energy vehicle policy.

President Cyril Ramaphosa says government is laying the groundwork for the local production of electric vehicles (EVs) in SA, through engagements with neighboring countries that are forerunners in automotive manufacturing on the continent.

Ramaphosa was delivering his seventh State of the Nation Address (SONA) under the current administration, held at the Cape Town City Hall, before a joint sitting of the two houses of Parliament – the National Assembly and National Council of Provinces.

Discussing the implementation of the Energy Transition Investment Plan, he said it aims not only to reduce carbon emissions and fight climate change, but also to enable economic growth and create jobs for South Africans.

He highlighted the local production of EVs as an important part of the plan, with the potential to drive investment in green energy and skills development programmes.

“We have decided to support electric vehicle manufacturing in our country, to grow our automotive sector which provides jobs to thousands of workers,” explained Ramaphosa.

“And in this regard, we are already at an advanced stage of cooperating with our neighbours, with countries such as the Democratic Republic of Congo, which is well endowed with critical minerals, and countries such as Botswana, which is already involved with important parts of the value chain of automotive manufacturing. Collaborating with these countries, SA is going to be able to form a powerful ecosystem that is going to enable all of us to benefit from the green energy revolution.”

“Thousands of jobs” promised

Ramaphosa said government is committed to supporting the manufacturing of EVs and further grow the automotive sector, which already provides good jobs to thousands of workers.

According to the National Association of Automobile Manufacturers of South Africa, the local automotive industry contributes 4.9% to SA’s annual GDP. The industry employs 497 408 people formally and informally, which is 2.9% of the 16.2 million people employed in SA.

Expanding on SA’s shift to EVs, the president said the transition to a low-carbon economy should be integrated into comprehensive green growth strategy and industrialisation plans.

“We have decided to give special focus to regions like Mpumalanga to enable the creation of new industries, new economic opportunities and sustainable jobs. With our abundance of solar, wind and mineral resources, we are going to create thousands of jobs in renewable energy, green hydrogen, green steel, electric vehicles and other green products.”

This comes as local automotive manufacturers accelerate the push towards EVs, in a move away from combustion-based vehicles.

In 2021, government introduced the Automotive Production Development Programme, which provides a framework for creating local production capacity, for both internal combustion engine vehicles and the EV market, with the latter anticipated to be a growing part of the local automotive market.

Meanwhile, SA is a step closer to introducing the new energy vehicle (NEV) policy, after cabinet approved the draft white paper on NEVs in November – after numerous calls for regulation from the automotive industry.

The draft white paper details a framework upon which a comprehensive and long-term automotive industry transformation strategy should be premised, with a focus on the creation of a high-yielding business environment.

This includes a fiscal, local manufacturing and regulatory framework that makes SA a leading and highly-competitive location for the automotive sector globally.