Automotive industry demands more urgency for EV transition

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SA automobile industry bodies express concern at the lack of urgency of government’s R964 million electric vehicle budget allocation, set to be rolled out in 2026.

Government’s electric vehicle budgetary allocation is expected to be channelled towards component value chain initiatives.of R964 million and tax incentives to help support the country’s transition to new energy vehicles .

The white paper outlines the intention to transition the automotive industry from primarily producing internal combustion engine vehicles, to a dual sector that includes electric vehicles, by 2035. Mikel Mabasa, CEO of NAAMSA, comments: “The allocated R964 million should be viewed in the context of the average annual investments by OEMs, which currently stands at approximately R5 billion.

“NAAMSA will engage government to address any potential gaps in the timeline, ensuring the incentive framework aligns with the industry's pre-production requirements,” says Mabasa. “We hope to compare notes around the adoption of an APDP rate specifically designed to cover instances of low local content and the exploration of effective strategies to address the adoption of locally-produced EVs. The aim is to ensure the advantages of the programme keep the local industry globally competitive,” Mabasa adds.The long-awaited EV policy is expected to be finalised this year. The industry has over the years urged government to hasten the policy.

“Over 60% of South African-produced vehicles and R70 billion of local automotive components are exported per annum, and a large proportion of these exports are destined for markets that are placing bans on carbon-emitting vehicles.

 

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