Wheels24 reader Guy Dormehl owns an electric BMW i3; thus, he raises critical points about how South Africa will deal with EVs in the medium and longer-term.
The South African motor vehicle manufacturers and their supply chains are a vital engineering cog in the wheel of our economics. Although Covid-19 and the world decline in car sales have dragged this sector down below 5% of SA GDP, it was nearly 7% previously. The vast majority of the cars produced in SA are exported. They have an enviable reputation for quality, with SA factories often featuring high up in the performance criteria of worldwide factories within the various car companies.
Around 110 000 people are employed within the industry, and up to 1.5 million South Africans directly or indirectly benefit.
It is a part of our economy we should all cherish and try to grow.
Numerous automotive and business plans are hatched routinely by the government and the car industry to keep the show on the road. Talk of increasing production and localising the supply chain are mooted—all no doubt with good intentions.
However, there is a torpedo headed towards the industry in South Africa with the possibility of sinking the whole shebang.
Anyone who follows global automotive developments will know that electric vehicles (EVs) are coming. Suppose one has been paying attention to EV developments internationally over the years. In that case, they will not be surprised by the tsunami that is underway following the EV tipping point being reached – particularly in Asia and Europe.
Despite considerable vested interests and the general dragging of heels by the car companies, global warming, environmental concerns, and government action has kick-started the movement to EVs spearheaded by Tesla, Chinese EVs and various start-up companies. The naysayers and sceptics have been overwhelmed by the reality of change, and many are now scrabbling furiously to change tack and try to catch up.
This is not going to happen without casualties and upheaval.
The complete lack of EV traction in South Africa seems bewildering until a possible scenario is investigated...
The SA government, which should be leading the way as elsewhere, has a vested interest in maintaining the status quo – for now. So there is little impetus from them. They're worried about the loss of petrol tax income, being dragged into infrastructure development (which they don't need to do...), the impact on Eskom (although this could be positive), clashing with vested interests and so on.
The government may act if there is pressure from the public and the car manufacturers. Still, the media and the local dealers/car makers keep EVs on a very short leash providing little helpful information whilst letting myths and misinformation prevail. Whether this is through ignorance, disinterest or influence is not clear...
But one would imagine that the local car manufacturers would be keen to encourage the EV uptake here to follow the lead elsewhere. Still, they only pay lip service to this and drag their heels (as anyone interested in EVs will attest from approaching dealers or car companies about their EV plans – in a word, obfuscation).
The local car manufacturers seem to be happy to stick with producing petrol and diesel vehicles for as long as possible despite the global changes considering the lack of pressure from the government or the public.
Converting SA's car factories to EV cars would require massive investment at a time when many people are questioning whether it is wise to invest in SA at this time. They can also point to the (artificially suppressed) appetite for EVs with the public… "Chicken and egg" or Catch 22 if you want!
They reason (perhaps accurately) that there will be a demand for petrol/diesel vehicles for quite a few years - not from Europe, China (Asia?) and, possibly, the USA when the bans on petrol/diesel sales start to kick in from 2030 (or earlier). Africa and other countries lagging behind may keep the SA plants running for another decade, winding down to match decreasing demand, after which the car manufacturers will just reassess whether SA is worth investing in. And if the answer is no, they will just close all the plants here rather than inject billions to convert the factories to EV vehicles.
And that will be the end of South Africa's car manufacturing industry, and all further vehicles will be imported. A sad possibility and the impact on the lives and welfare of many South Africans will be compromised as their lifeblood flows away, never to come back. The tide could be stemmed with a visionary policy, and the SA motor industry could be part of the change rather than a deceased victim.
If all taxes and import duties were lifted on EVs till, say, 5% of new car sales, any pent up demand lurking in South Africa would be satisfied by appealing contemporary EVs offered by the manufacturers at very competitive prices – under R800k (and dropping). Private individuals could also import alternative EVs with legislation enforcing worldwide warranties.
These EVs would spark demand for charging stations which would then be installed by the car manufacturers, energy companies or private investments (not necessarily the government). By this time, the worldwide adoption of EVs would encourage the local motor manufacturers to swop over to EV cars as there would be local and export demand. All this at minimal cost to the government – just a tiny kick-start and an EV friendly environment. If there is no vision, courage, common sense and desire in the people who can make this happen, then SA will be asleep at the wheel and lurching headlong towards the inevitable car crash.