Home Editorials OPINION EDITORIAL: ELECTRIC VEHICLES 5 Principles for SA becoming a major EV producer

OPINION EDITORIAL: ELECTRIC VEHICLES 5 Principles for SA becoming a major EV producer

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By Minister Ebrahim Patel, Department of Trade, Industry and Competition

The local automotive industry remains the most vibrant manufacturing sector in the South African economy and is a major driver of economic growth and development for the country. The close partnership between Government, business and organised labour is the critical success factor which has seen the auto value-chain grow to approximately 7% of GDP and R175 billion in exports.

In August 2019, I set the large automakers in South Africa a challenge: to help develop a roadmap for the local production of electric vehicles (EVs). In 2020-21, the implications of this work has become more critical as growth in EV production and sales in our key export markets has accelerated. This is reflected in the new targets and deadlines to reduce the number of fossil fuel reliant vehicles on their roads in the EU and the UK amongst others.

Consequently, if South Africa is to preserve its status as a major auto manufacturing and exporter, a coherent strategy supported by all stakeholders is required to encourage the shift to the production of EVs.

Five principles form the basis for SA’s move to becoming a major EV producer

  1. It is widely accepted that, subject to technology developments that can reduce costs, the use of fuel-cell technologies based on platinum-group metal catalysers (green hydrogen technologies) can play to South Africa’s strengths and provide potentially significant demand for its raw materials.  Special attention will need to be paid to this and efforts by the private sector to pilot with such technologies will be encouraged. As the green hydrogen technologies mature, they are expected to become the technology-of-choice in SA and across the world.
  2. The value-proposition for SA needs to be clearly established in the form of additional jobs, stimulation of local industrial capabilities and expansion of production for new markets.
  3. While the principle of a technology agnostic framework is generally agreed, it is recognised that innovation may provide market-driven advantages to particular technologies. This could change the price-gap between EVs and internal combustion engines and thus reduce the extent to which support-measures will be required. Stakeholders will need to be alive to these opportunities and be prepared to take firm decisions to unlock these.
  4. The current charging infrastructure in the domestic market should be expanded to incentivise motorists to switch to EVs. The private sector should play a key role in enabling such development, on commercial terms. Government has already provided a common standards platform through the work of the SA Bureau of Standards (SABS).
  5. In the domestic market, the full value of carbon-reduction can only be achieved in tandem with a shift in the country’s energy-mix: an increased proportion of renewable energy in the national grid will ensure that the electricity used to charge vehicles does not negate the positive effects on the environment of the electric vehicle technologies.

These principles are guiding the work of stakeholders to develop sound and credible recommendations that will pave the way for specific measures that South Africa can take to increase the supply and demand of EVs and establish a new basis for competitive auto vehicle production in SA.

Minister Ebrahim Patel, Department of Trade,
Industry and Competition

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