naamsa | The Automotive Business Council has welcomed the release of the Auto Green Paper on the advancement of so-called new energy vehicles (NEVs), which was published by the Department of Trade, Industry and Competition (DTIC) for public comment last week.
The organisation notes, however, that it requires time to carefully study and extensively consult with its members on the proposed Green Paper before it issues a formal statement
naamsa CEO Mikel Mabasa says there are progressive pronouncements and suggestions made in the paper, which will firmly advance South Africa’s evolution in the electromobility space.
In a statement, naamsa points out that Europe has overtaken China as the centre of NEV growth, globally.
This is evidenced by various European countries having, and continuing to announce, their intentions to ban and /or prohibit the sales of new internal combustion engine (ICE) vehicles, with Norway intending to do so by 2025, followed by the UK in 2030.
The UK has been South Africa’s automotive industry’s top export destination for vehicle exports since 2014, while three out of every four South African-manufactured vehicle exports were destined for European Union countries in 2020.
However, naamsa points out that the ban of new ICE vehicle sales includes all vehicles besides those that use only battery storage and electric drivetrains.
This means that the South African automotive industry’s electromobility discussion will have to be accelerated to ensure its future sustainability, the organization reports.
As such, naamsa reveals that the Auto Green Paper outlines the various policy instruments to address the current price differential between ICEs and NEVs, as well as for the local manufacture of electric vehicles and components thereof.
Nonetheless, naamsa reiterates the importance for the seamless transition to NEVs, using a carefully implemented phased approach based on leveraging the policy instruments as best it can.
In this regard, naamsa concurs with the DTIC’s statement that exporting remains key to generate sufficient economies of scale and achieve improved international competitiveness.
The organisation states that if South Africa does not want to lose its major export markets and face significant job losses at plant level, export revenue, as well as a substantial drop in the automotive industry’s contribution to the gross domestic product, then it must accelerate its NEV transformation.
“naamsa will support and work with the DTIC and other key stakeholders in the development of a clear policy framework that will assist South Africa to accelerate this work”, Mabasa concludes.