South Africa is a step closer to introducing the new energy vehicle (NEV) policy, after cabinet approved the draft white paper on NEVs last week.
The draft white paper details a framework upon which a comprehensive and long-term automotive industry transformation strategy should be premised, with focus on the creation of a high-yielding business environment. This includes a fiscal and regulatory framework that makes SA a leading and highly-competitive location for the automotive sector globally.
It also seeks to promote NEV production and support, and investment in the expansion and development of new and existing manufacturing plants, among other objectives.
“Cabinet has approved the white paper on NEVs that aims to ensure SA becomes part of the global shift from internal combustion engines to new technology vehicles,” according to the latest Cabinet statement.
“The policy supports investments in the development and expansion of new and existing manufacturing plants to support the production of electric vehicles in the country.”
SA’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, it says.
The country’s automotive industry has for years made several calls to urge government to hasten the introduction of the policy.
It warned that the lack of a regulatory framework could result in SA facing the threat of losing significant investment from local multinational players, such as BMW, Toyota and Mercedes-Benz SA – which have announced local plans for EV production and sales.
In 2021, the Department of Trade, Industry and Competition (DTIC) announced the Auto Green Paper, which focuses on the advancement of NEVs and battery-electric vehicles in SA.
In May 2021, the draft green paper was gazetted for public comment and the policy proposals were submitted to Cabinet for consideration by October 2021.
The green paper was followed by the more refined discussion document – the white paper.
As part of the next process, the DTIC or a task team designated by the DTIC minister may invite comments on the white paper from interested parties.
Further amendments may be proposed by the relevant parliamentary committee before the white paper is sent back to the DTIC for additional considerations and final decisions.
The National Association of Automotive Manufacturers of SA has set a target for NEVs to account for 20% of SA’s new-vehicle market by 2025 and reach 40% by 2030.
To date, more than 20 countries have announced plans to phase-out combustion vehicle sales over the next 10 to 30 years. This includes Germany, France, Netherlands, Sweden and Italy, which have national policies and targets to encourage the NEV shift, according to a report by the International Energy Agency.
Zambia, Kenya, Mauritius and Rwanda have either introduced tax incentives, or reduced various tax duties for NEV ownership.