South Africa has announced its ambitious plan to become a major player in the global electric vehicle (EV) market by 2026, according to a white paper released by the Department of Trade, Industry and Competition (DTIC) on Tuesday. The paper outlines the key policy measures and incentives that the government will implement to support the development of the local EV industry and increase the adoption of EVs in the country.
The white paper states that EVs are not only a cleaner and more efficient alternative to conventional vehicles, but also a strategic opportunity for South Africa to diversify its economy, create jobs, and enhance its competitiveness in the global automotive sector. South Africa is currently the largest automotive producer in Africa, accounting for about 1% of the world’s vehicle output. However, the country faces several challenges, such as high energy costs, low domestic demand, and increasing competition from other emerging markets.
By embracing EVs, South Africa hopes to overcome these challenges and position itself as a leading exporter of EVs and related components to the rest of the world. The paper cites the examples of China, India, and Saudi Arabia, which have adopted policies to promote EV manufacturing and deployment in their respective markets. The paper also notes that EVs are aligned with the country’s commitments to reduce greenhouse gas emissions and achieve the Sustainable Development Goals.
How South Africa plans to achieve its EV vision
The white paper proposes a comprehensive and integrated approach to support the development of the local EV industry, which includes the following elements:
- Bridging the viability gap: The paper acknowledges that EVs are currently more expensive than conventional vehicles, and that consumers need incentives to switch to EVs. The paper suggests various measures to reduce the cost of EV ownership, such as tax exemptions, rebates, subsidies, preferential financing, and green procurement. The paper also recommends the introduction of a carbon tax on conventional vehicles to reflect their environmental impact and create a level playing field for EVs.
- Creating charging infrastructure: The paper recognizes that the availability and accessibility of charging infrastructure is a key factor for EV adoption. The paper proposes to facilitate the deployment of charging stations across the country, especially in urban areas, highways, and tourist destinations. The paper also suggests to leverage the existing network of fuel stations, shopping malls, and public parking facilities to provide charging services. The paper also calls for the development of standards and regulations for charging equipment and interoperability.
- Encouraging local manufacturing: The paper emphasizes that South Africa has the potential to become a regional hub for EV production and export, given its existing automotive industry and skilled workforce. The paper proposes to support the local manufacturing of EVs and related components, such as batteries, motors, and electronics, through various incentives, such as tax breaks, grants, loans, and preferential market access. The paper also urges the industry to invest in research and development, innovation, and skills development to enhance its technological capabilities and competitiveness.
- Public awareness: The paper acknowledges that public awareness and acceptance of EVs is essential for their successful adoption. The paper suggests to launch a national campaign to educate and inform the public about the benefits and advantages of EVs, such as lower operating costs, better performance, and environmental friendliness. The paper also recommends to involve various stakeholders, such as media, civil society, academia, and celebrities, to promote EVs and dispel myths and misconceptions about them.
- Other enablers: The paper identifies several other factors that can facilitate the growth of the EV market, such as policy coherence, coordination, and monitoring; data collection and analysis; regional and international cooperation; and stakeholder engagement and consultation.
What are the expected outcomes of the EV policy
The white paper sets out a vision and a roadmap for South Africa to become a global leader in EV production and adoption by 2026. The paper estimates that by 2026, EVs will account for 10% of the total vehicle sales in the country, and 30% of the total vehicle exports. The paper also projects that the local EV industry will create 120,000 direct and indirect jobs, and contribute R42 billion to the gross domestic product. The paper also expects that the EV policy will result in significant environmental and social benefits, such as reducing carbon emissions, improving air quality, enhancing energy security, and promoting social inclusion.
The white paper is a bold and visionary document that reflects South Africa’s commitment and aspiration to become a pioneer and a leader in the global EV market. The paper provides a clear and comprehensive framework for the government, the industry, and the society to work together to realize the potential and the promise of EVs for the country and the world.