While the race to shrink the transport industry’s carbon footprint has also taken centre stage in South Africa, the local automotive ecosystem’s sluggish transition to low-emission alternatives meant its sizeable contribution to economic growth hangs in the balance.
This is according to Justin Coetzee, CEO of GoMetro - a fleet management company, headquartered in the UK - who said yesterday that commercial players and government bodies can both do more to safeguard the industry.
“The transport industry is South Africa’s third largest source of emissions, representing almost 11% of the country’s aggregate,” Coetzee said.
“The only way to reduce emissions in this sector is to move away from internal combustion engine (ICE) vehicles to EVs, and some say also hydrogen vehicles (HV). The HV dream is not something we believe is feasible, but EVs are another matter.”
According to the Automotive Business Council (Naamsa), 75.5% of vehicles produced in SA last year were exported to the UK and EU. However, these markets have committed to ban the sale of new fossil-fuelled vehicles by 2035.
This resolve was strengthened by the new UK Labour government that was expected to honour the commitments made in the Paris Agreement.
Naamsa said that an estimated 67% of the SA’s automotive component exports were also at risk due to a predicted decline in demand, as noted in a Department of Trade, Industry and Competition (dtic) EV White Paper.
The Government’s Green Transport Strategy set out its commitment to a 5% reduction in transport emissions by 2050. The caveat was that large financial investments in new production lines and equipment were needed to transition the local automotive manufacturing industry to produce EVs.
Coetzee said a regulatory framework that encouraged local EV production was slowly unfolding. He said recent announcement of tax breaks (from 2026) for the new production of EVs and HVs, was one such example, but the market was simply not ready.
“Vehicle manufactures are heavily invested in the production of ICE vehicles, with loans that could take 10 or 20 years to pay off. These manufacturers are not in an ideal position to invest in EV production facilities. Because of this stalemate, EV development in South Africa could come to a halt,” he said.
GoMetro said the government's goals for the implementation of EV manufacturing were not supported by the policies that were currently in place, in particular the high costs of importing EVs, due to unreasonable tariffs and duties.
“Government should aim to strike a balance between the preservation of export revenue and jobs and spurring the uptake of EVs in South Africa. Additional incentives could, for example, allow EV startups to pilot and test technologies and scenarios without the penalty of high import duties,” Coetzee explained.
“Additional policies that stimulate local manufacturing initiatives would, in turn, accelerate greater corporate and consumer interest by narrowing the price differential between EVs and ICE vehicles.”
The company said South Africa does not have a set of specifications for EV “homologation”, the process that checked if all new vehicles coming into the country complied with local standards.
Instead, it said EV compliance was based on the existing standards for ICE vehicles. Engine capacity, for example, did not automatically apply to a vehicle with an electric drivetrain. This leaves a policy vacuum for regulatory bodies to define a set of compliance standards that incorporate EVs, it said.
GoMetro said licensing for charging facilities was also still an open-ended debate, with scope for further regulatory clarification. “Selling energy might become a complex issue down the line, and a coordinated effort between key government players alongside Eskom needs to come to the fore. This will ensure industry actors have certainty to make investments,” Coetzee said.
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