The issue of global warming and climate change is at the forefront of many global summits, namely the United Nations Climate Change Conference (COP). Indeed, to tackle this, electric vehicles (EVs) are viewed as the next step in the efforts to minimise the world’s carbon emissions. Most vehicles operate using an Internal Combustion Engine (ICE), running on petrol or diesel and are a large contributor to carbon emissions. That is why many countries such as the United States and European nations, have announced their plans to stop importing (ICE) vehicles by the year 2030 and stop local manufacturing and selling altogether in their countries by 2035.
South African dilemma
South Africa has a productive vehicle manufacturing industry. South Africa exports manufactured vehicles across the world for some of the biggest companies in the sector, such as Toyota, BMW, Mercedes Benz, and Volkswagen. In fact, roughly 3 out of 5 passenger vehicles manufactured in South Africa are exported, primarily to Europe. However, with European countries announcing plans to stop importing (ICE) vehicles by 2030, this has left the South African vehicle manufacturing industry vulnerable. Electric vehicles are still scarce in South Africa, and there has been no market push for their manufacturing, but with primary exporting partners moving away from (ICE), many manufacturers are left without any buyers in the future. Indeed, the lack of (EVs) in South Africa has brought new challenges for manufacturers, as they are entering into a market they have no expertise in, and which has no government policies to guide its transition. Furthermore, manufacturers will have to contend with local conditions such as the issue of rolling blackouts and unreliable rail and port services. If the vehicle manufacturing industry is unable to adjust to the incoming changes, the industry will collapse, accounting for around 500,000 people losing their jobs.
Is there a market for EVs in the country?
Only a third of South African households own a car, and the percentage of those that can afford (EVs) is minuscule. This is reflected by only 0,001% of cars on South African roads being electrically powered or hybrids. It’s estimated that only upper-middle class and high-income households would be able to afford an electric vehicle, making them inaccessible to most ofthe population. Even for those who can afford to purchase an (EV), they would have to pay absorbent fees on not only the car but the cost to import it, due to South Africa’s strict tax laws on (EVs). Only 92 (EVs) were sold in 2020, with the number gradually but marginally rising yearly to 218 in 2021.
Is there a solution?
If South Africa has any intention of remaining in the vehicle manufacturing industry, it must take a proactive step in ensuring they do not get left behind. This can be achieved by the government drawing up policies and putting in measures that will support and aid in the manufacturing of (EVs). While South Africa is still some ways away from manufacturing (EVs), they can aim to start importing them to make them more accessible to consumers, which will go a long way in building a market for electronic vehicles in the future.
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