The South African government is making headway with its support of electric vehicles (EVs) and the rollout of a nationwide charging network. The Department of Trade, Industry and Competition is working alongside the automotive sector to compile a position paper regarding the role of EVs in the local economy.
The chief executive officer of the National Association of Automobile Manufacturers of South Africa (Naamsa), Mike Mabasa, has said that this position paper will be ready for public release in June 2020. The initial draft of the paper is currently being facilitated by the economic research organisation, TIPS.
South Africa and EV sales
While EV sales in South Africa are currently low, they are expected to make up 50% of all global passenger car sales by 2040. Experts predict that 3% of cars sold in 2020 will be EVs, so their growth is likely to impact South Africa as well. Many large vehicle brands, such as Volkswagen, Mercedes-Benz and Jaguar Land Rover, are already launching EV models as a matter of priority.
Currently, the vast majority of the vehicles and automotive components manufactured in South Africa are for internal combustion engines. As customer preferences shift towards EVs, the country will need to be ready for this change. Car brands and future-facing parts manufacturers, like Formex Industries, are preparing to meet the demands of the consumer and join the EV market in the coming few years.
The position paper will make the government’s intent known
This position paper will help to align the automotive industry with government plans for the rollout of an EV subsector. As carbon emission regulations become fiercely strict in European markets, South Africa needs to bear these in mind for the benefit of its export industry.
The position paper will focus on four key areas; the regulatory environment for EVs, charging infrastructure, benefits of EVs to the environment and the impact of the EV revolution on local vehicle manufacturing. It will also outline likely import duties on EVs and other incentives that could affect consumer purchasing of these vehicles.
The government has currently placed a 25% import duty on EVs, but this may be reduced once the position paper is released. The paper also needs to outline the role of Eskom, independent power producers and the national energy grid in the rollout of EV charging stations countrywide.
Once the final document is published, it will be up to the automotive sector to push the government to implement the recommendations, says Mabasa. It will help the country and the economy to prepare for the arrival of the future of motoring.
Formex Industries is a metal forming and assembly company that supplies a variety of complex products to the local automotive industry and the export market. The company is based in the Nelson Mandela Bay metropole, South Africa’s foremost region for automotive manufacturing and export.
Formex specialises in producing components for the catalytic converter industry, as well as metal components and assemblies for the various vehicles. Formex aims to become one of the foremost suppliers for the South African automotive industry by 2035, aligning itself with the South African Automotive Masterplan (SAAM) which takes effect in 2020.
Formex is a Level 2 B-BBEE supplier with over 80% black ownership, of which more than 40% are black women. The company is owned by Deneb Investments Limited – a subsidiary of Hosken Consolidated Investments Limited (HCI) – one of South Africa’s biggest true B-BBEE companies listed on the Johannesburg Stock Exchange (JSE).
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