South Africa’s automotive industry on the Precipice…

If the recent Festival of Motoring at Kyalami is anything to go by, South Africa’s electric vehicle industry is surging forward despite the best efforts of the naysayers. Yes, we are painfully aware of our fragile energy supply and yes, the cost of these vehicles is beyond the reach of the average South Africa. End of argument, right?

Wrong!

We have a planet to save!

We have a whole automotive industry to save! South Africa’s automotive industry is the largest in the manufacturing sector and generates job opportunities both in manufacture of motor vehicles as well as the manufacture of component parts. Based on figures released by NAAMSA in their Automotive Export Manual the automotive sector contributed 4.3% to SA’s GDP which in the current economic climate is indeed a healthy contribution.

But this entire industry is at risk of being overtaken by global developments. Our main export partner the European Union has announced imminent plans to stop the manufacture of Internal Combustion Engines (ICE) and will switch to electric and hybrid vehicles instead. Our two main export destinations, Germany and the UK have both sounded the death knell of the ICE vehicle as early as 2030.

So, if we continue to manufacture ICE vehicles, who will buy them? Of the 499 087 units manufactured in 2021, 298 020 were exported. The South African and African market is not big enough to absorb the entire annual production. If we are to maintain our ascendancy in Africa, original equipment manufactures will have to be assured that SA will continue to be an attractive destination for their foreign direct investment which at the moment stands at 8.8 billion rands. The automotive component sector’s investment was 5.7 billion rands in 2021.

The move towards a net zero carbon environment is inexorable. All major governments throughout the world are moving swiftly to combat the harmful effects of carbon to our environment. The SA government will have little option but to follow suit but in order to remain competitive the DTIC in particular will have to move swiftly to reduce the tax on electric and hybrid vehicle and go one step further and start subsidising the manufacture of these vehicles.

This will lead to driving the cost of new energy vehicles(NEVs) down and will start to appeal to more ordinary South Africans which in turn will lead to a growing second hand market which opens  up the aftermarket for parts and related accessories.

Mind you transitioning to NEVs is fraught with complexities. The number of moving parts is significantly fewer than in ICE vehicles while the wear and tear on electric or hybrid vehicles is probably not as severe as it is in ICE vehicles. Public transport in the form of taxis and busses will have to be taken along and entire fleets of these vehicles will have to be transitioned towards electric and or hybrid variations. We must be careful not to create an automotive elite NEVs.  

Something must give. In the final analysis it will come down to making brave decisions about saving our environment and saving our automotive sector. Those decisions are currently being dragged through government channels and we all wait with bated breath for the much-heralded Green Paper on New Energy Vehicles  to finally become government policy.

How does all of this affect me as a consumer?

Like major disruptions in cellphone technology, you can expect life on the road to change radically too. At any given time the road could be shared by ICE vehicles, electric vehicles and hybrid electric vehicles. When you park your car at the shopping mall be prepared to see charging stations popping up and on your next road trip to Durban or Cape Town you will see charging stations along the route.

Some online Programmes to Assist

Our aim is to help you understand what an electric vehicle is, how it works and what the safety considerations are. We have therefore put together a series of programmes to create awareness of electric and hybrid vehicles and to dispel some of the myths that are created when people don’t have proper information about a product that will disrupt the market very much as smartphones have in the telecommunications sector. Make no mistake, these are currently expensive vehicles but as battery technologies become more advanced the cost of the manufacturing the battery (the single most expensive component of the EV) will come down.

Our aim here is to arm you with basic information that will help you understand EVs and if it so happens that you decide to take the leap into the post diesel and fuel era then hopefully these series of educational videos will assist you in making an informed buying decision.