As the CEO of AutoTrader South Africa, I have been closely monitoring the global transition to electric vehicles (EV) and its potential impact on South Africa’s automotive industry. While the shift to EVs poses some challenges for South Africa, it also presents a number of opportunities for growth and innovation.
The EV Impact on South Africa’s Automotive Industry
According to the National Association of Automotive Component and Allied Manufacturers (NAACAM), South Africa could lose up to 25% of our component exports due to the shift to EVs. I’ve maintained that one cannot compare an ICE vehicle to an EV and the whole supply chain has to be rethought. In fact, OEMs have to re-think the design and manufacturing process from scratch.
The EV market requires far fewer components than traditional internal combustion engine (ICE) vehicles, and many of the components required for EVs are not yet manufactured in South Africa.
However, it’s important to keep in mind that the EV market is still in its early stages globally and even more so in South Africa. Globally, EVs accounted for just 4.2% of new car sales in 2021, but this is expected to grow rapidly. Bloomberg NEF predicts that EVs will represent 70% of new passenger car sales worldwide by 2040. That’s just 17 years away.
Opportunities for Growth and Innovation
While the shift to EVs poses challenges for South Africa’s automotive industry, it also presents numerous opportunities for growth and innovation. The Department of Trade, Industry and Competition in South Africa estimates that the localisation of EV assembly and production could create up to 100,000 new jobs in the country.
There is also a growing demand for new types of components and materials to support EV production. This presents an opportunity for South African component manufacturers to diversify their offerings and enter new markets.
Adapting to the Changing Landscape
South Africa’s automotive industry must adapt to the changing landscape to take advantage of the opportunities presented by the shift to EVs. This means investing in research and development to identify new opportunities, as well as upskilling employees to ensure they have the necessary skills to work in the EV industry.
In addition, policymakers must support the transition to EVs by creating a supportive regulatory environment. This should include tax incentives for EV manufacturers, and buyers, as well as regulations that require the deployment of EV charging infrastructure.
In conclusion, the shift to EVs poses challenges for South Africa’s automotive industry, but it also presents numerous opportunities for growth and innovation. By embracing change and investing in new opportunities, South Africa’s automotive industry can ensure a bright future for both traditional ICE vehicles and EVs alike. With the right support and investment, we can navigate this shift to EVs and emerge stronger as an industry.