The government has unveiled a new and long-awaited policy road map that could see South Africa beginning to produce exclusively electric vehicles (EVs) that could be powered by green hydrogen, in the next two years, in a bid to mitigate the looming impact of global internal combustion engine bans.
Minister of Trade, Industry and Competition Ebrahim Patel yesterday unveiled a White Paper on Electric Vehicles and the Green Hydrogen Commercialisation Strategy.
The White Paper is the culmination of substantial research and engagement over the last number of years, and follows the publication of a Green Paper in 2021, extensive industry consultation with original equipment manufacturers (OEMs), consideration of public comments, all of which helped to shape the policy actions to be taken.
This comes as several regulators, especially within the EU, have decided to ban the sale of new internal combustion engines within the next 12 years as part of their contribution to achieving zero emissions by 2050.
Patel yesterday said these global trends will have a significant impact on South Africa and its economy since it was the largest automotive manufacturing hub on the African continent.
He said EVs will be significant for South African producers, as the country was also integrated in global vehicle supply chain components from across the world, including in the region and exports.
“The ban on internal combustion engine vehicles in key markets like the EU and the UK will be profound as they absorb nearly half of South Africa’s auto production,” Patel said.
“Cabinet adopted the White Paper as the new policy of the government. It follows extensive engagement with auto industry meetings with assemblers, as well as engagements with component manufacturers, and with each of the seven global OEMs in manufacturing cars in South Africa.”
Patel said South Africa was already producing hybrid vehicles, but was now gearing up to produce fully-electric cars to align with changing demand in export markets and South Africa’s commitment to reducing greenhouse gases.
“We are looking at starting production of EVs in South Africa already by 2026. These support each OEMs in their own strategy, and they’re now looking at decisions by headquarters,” Patels said.
“But from what we’ve been advised in our discussions with OEMs, the first will be on a more limited basis, and then enormous quantities will be produced, but that first quantity can be necessarily expected in 2026. And then they expect quite a sharp growth between 2026 and 2030.
“There’s one OEM that will be a bit of an outlier, that only anticipates moving into production early, after 2030, but then two will be really looking relaxed depending on the speed with which the market globally and locally transitions to consumption of electric vehicles.”
Patel also acknowledged that load shedding would be one of the significant factors that would slow South Africa’s transport transition as the country was struggling with reliable electricity supply.
“This will impact the domestic adoption of electric vehicles in the short term due to the need to avoid a sharp rise in energy demand on the grid from electric vehicles, while the grid capacity is being rebuilt,” Patel said.
“So as we navigate our transition, we recognise we do so within a period of energy constraint. The energy mix is skewed currently towards fossil fuels, which have a high carbon footprint.
“This impacts on the domestic adoption of electric vehicles due to the lower positive impact on emissions from electric vehicles that continue to use fossil fuels for charging purposes, which in turn, reduces the overall decarbonisation of electric vehicles in South Africa compared to countries with a greater renewable energy mix.”
National Association of Automobile Manufacturers of SA CEO Mikel Mabasa, who has been calling for the adoption of EVs policy for a long time, said the automotive industry has been engaging with the government for the last two years.
Mabasa said they will be giving the White Paper to their constituencies for feedback so they can engage the road map further as it still allowed for the guidelines to be developed.
“We want to express our gratitude to the minister and to the department for getting us over what I think has been a long road,” Mabasa said.
“There have been very interesting engagements in the last couple of months. And as the minister has indicated, industry has been available to engage to make sure that this White Paper is not only one-sided view, industry view. You can view it in terms of how we would like to see the relatively close, so we are very pleased that we are where we are.”