South Africa and Europe should collaborate in building an alternative “value chain” for electric vehicle (EV) components such as batteries, to reduce dependence on China, says BMW South Africa CEO Peter van Binsbergen, calling for a national-level strategy.
South Africa, which accounts for 51% of Africa’s vehicle output, is seeking to position itself as a player in the global EV supply chain — but industry leaders say more policy clarity and investment are needed to unlock its potential.
“South Africa, with Europe, could put a strategy together to create an alternative value chain for EV batteries, for example,” Van Binsbergen said in an interview on Wednesday on the sidelines of a car conference. “That gives the world an alternative to China.”
China dominates global battery cell production, making it difficult for some carmakers to meet rules of origin requirements for exports, particularly in Europe.
“If you want a battery, it comes from China,” Van Binsbergen said. “We need to get that right.”
South Africa is Africa’s biggest car manufacturing hub. Global carmakers such as Ford, Volkswagen, BMW and Toyota manufacture models in South Africa for the local and European markets.
If we do not adapt, we risk losing these key export markets
— Parks Tau, trade, industry & competition minister
Britain and the EU consume nearly half the vehicles South Africa produces.
South African car industry executives want a co-ordinated national approach to EV development, saying efforts by individual brands will not be sufficient.
Neale Hill, president of Ford Motor Company Africa, said carmakers are concerned that the country’s new energy vehicle roadmap is not moving, despite President Cyril Ramaphosa having announced potential consumer subsidies and stating that hybrids and plug-in hybrids should be included in planned production incentives last year.
“In contrast to our lack of progress, consider a country such as Ethiopia, which has already more than 100,000 EVs on the road vs just more than 4,000 in South Africa,” Hill said.
There is a need for urgency as the UK and the EU have committed to ending the sale of new fossil fuel vehicles by 2035.
The South African government has announced a 150% tax deduction from next year for qualifying investments in EV and hydrogen vehicle production, trade, industry & competition minister Parks Tau told delegates on Thursday.
South Africa, in partnership with international partners, including the World Bank, has also developed a national critical minerals strategy aimed at securing supply chains for the local EV industry, attracting investment into battery manufacturing facilities as well as EV components.
“If we do not adapt, we risk losing these key export markets,” Tau said.
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