SA’s automotive manufacturers are in danger of becoming stuck making a legacy product that no one wants, unless the government develops policies that support a transition to electric vehicles (EVs).
This is the warning from Mikel Mabasa, CEO of motor industry body Naamsa, who said the country faces the same fate as the Australian automotive industry, which failed to adapt to industry changes and has now shrunk to the point where its car-making sector has essentially ceased to exist.
Addressing the opening day of the Southern African Transport Conference taking place in Pretoria from July 4-7, Mabasa appealed to the country’s decisionmakers to develop policies that will support a transition for the motor industry. Over 60% of SA-made vehicles are exported, but the most important markets, in Europe, plan to ban sales of new internal combustion engine (ICE) vehicles in the next few years.
“In order to survive, we have no option but to transform to the manufacture of new-energy vehicles [including hybrid vehicles and fully electric vehicles] as soon as possible,” he said.
“All the while, our rivals in the manufacturing sector are refitting their factories to transition to electric, passing new laws to support this and embracing the low-carbon future. New countries are poised to enter the industry — Ghana, Morocco and Egypt, for instance. We are falling behind.”
Mabasa said that as an emerging economy, SA cannot afford the collapse of an industry that creates thousands of jobs and significant amounts of foreign exchange for the economy.
The international markets on which we depend to sell our petrol and diesel vehicles are all legislating to phase out ICE vehicles. The EU has brought forward the initial timeline to ban internal combustion engines to 2035, while the UK will ban ICE vehicles from 2030.
“If we accept that our major markets will cease to exist within 10-15 years and refitting factories and developing new models takes around a decade, then the time to make this crucial change has almost run out,” warned Mabasa.
“Already manufacturers have left SA because it now longer made sense for them to continue manufacturing vehicles in the country. So, there are no guarantees. The very future of our industry hinges on our ability to adapt to the new reality, change our manufacturing policies and to move in step with the rest of the world.”
He said the Automotive Production Development Programme (APDP) aims to stimulate local production of automotive components while maintaining the incentives for original equipment manufacturers (OEMs) to manufacture for export and the local market.
“But this is not a plan that reimagines our industry for the renewable-energy and electric-vehicle era,” he said.
“Worldwide, the automotive sector is already going through the most rapid and far-reaching changes of its entire existence. If SA is to remain globally competitive, we urgently need to be able to develop new state policies that enable us to do so.
“As the era of the internal combustion engine comes to an end, and new energy vehicles (NEVs) become the road-transport mode of choice, automakers across the globe are retooling their factories, and working with their governments to develop policy and legislation to support this new industry. These vehicle manufacturing markets are moving at an aircraft speed to develop and introduce agile public policy positions to enable the industry to adapt and embrace this imminent change.”
Speaking ahead of the conference, transport minister Fikile Mbalula acknowledged the need to enable faster penetration of EVs and autonomous vehicles, and said the government is identifying respective legislation and regulation gaps.
“Given that there are more EVs in SA today the legislation and regulation gaps are identified regarding EV charging infrastructure, charging methods and power rating, battery swapping, charging standards and infrastructure interoperability, vehicle specification and standards, EV charging targets, location of infrastructure, as well as integration of EVs into the country’s electric grid,” he said.
Mbalula added the government is not operating in isolation and is guided by public consultations. Regarding the autonomous and electric vehicle space, the transport department has established a National Autonomous/Electric vehicle Working Group (NAVWG) to scrutinise legislation and eliminate unnecessary barriers, ensuring a smooth transition to the dominant use of EVs and AVs in the SA economy.
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