South Africa releases white paper on electric vehicles to facilitate economic growth

The Department of Trade, Industry, and Competition in South Africa recently released the "Electric Vehicles White Paper," signaling a pivotal moment in the country's automotive sector. This document acknowledges the global shift away from internal combustion engines (ICE) and the consequential risks to South Africa's automotive industry. To address these challenges, the paper proposes a strategic move towards manufacturing electric vehicles (EVs) and their components, leveraging existing infrastructure and resources.

The shift towards EV manufacturing aligns with South Africa's economic development goals by ensuring the long-term sustainability and growth of the automotive sector. The white paper recognizes this alignment and outlines opportunities and challenges in the transition to EVs. Moreover, proposed reforms in infrastructure, such as ports, energy, and railroads, not only support the EV transition but also contribute to the broader economic development of South Africa.

Beth Dealtry, the head of Policy & Regulatory Affairs at National Association of Automotive Component and Allied Manufacturers (NAACAM), highlighted the economic importance of the automotive industry to South Africa's GDP, exports, and employment. Asked about her opinions on how the proposed shift towards EV manufacturing aligns with the country's economic development goals and challenges, Dealtry said that the automotive industry has been the backbone of South African manufacturing for decades. Critically, it contributed 4.9 percent of GDP in 2022 and employed over 110,000 people directly. Component manufacturing, particularly, is a critical section of the industry, employing roughly 73 percent of the industry’s total employees. The industry has also proven to be a critical export category for South Africa with more than half of South Africa produced vehicles being exported and similarly, a large volume of components. These statistics all illustrate the importance of the sector in terms of supporting the country’s economic development and growth.

Commenting on the white paper’s impact on the automobile market and Chinese electric vehicles, Yun Liu, executive deputy general manager of Chery Auto South Africa said that the release of the white paper on the automotive industry has stirred significant interest and speculation about its potential impact, particularly on the development of the country's automobile market and the entry of Chinese electric vehicles. This proactive step by the government is seen as a crucial move towards transforming the local automotive industry and promoting the adoption of new energy sources.

He said, “For Chinese EV manufacturers eyeing the South African market, the release of the white paper provides a conducive environment for growth. It prompts these manufacturers to accelerate the preparation of new energy products tailored to the local market. The emphasis on local infrastructure development and consumer incentive measures in the second phase of the white paper is particularly encouraging for Chinese EV manufacturers looking to expand their presence in South Africa.”

The white paper represents a significant step towards a cleaner, more sustainable, and competitive automotive market in South Africa. By addressing economic, environmental, and regulatory considerations, the paper sets a clear path for the country's transition to electric vehicles, ensuring a brighter and more sustainable future for the automotive industry.

Dealtry also noted some challenges. “I think it has also reflected on many of the obstacles and challenges to South Africa's development which is important. For instance, some of the key interventions in the paper are port, energy and railroad reforms. Improving these vital infrastructure will not only support the EV transition, but also support growth within the wider automotive industry and South African economy at large,” she said.