South African NEV plan

The automotive sector is angered by government’s lack of a South African NEV plan. Picture: File/Fotor.

Government is dragging its heels on South African NEV plan

The Finance Minister’s lack of clarity on a South African NEV plan has angered many in the automotive industry.

South African NEV plan

The automotive sector is angered by government’s lack of a South African NEV plan. Picture: File/Fotor.

NAAMSA is annoyed at a lack of progress for a South African NEV plan. NEV refers to New Energy Vehicles and incorporates any with a battery electric/hybrid component. This is an evolution of the conventional internal combustion engine (ICE) cars that make up the majority of the South African carpark.

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The Automotive Business Council said the following after the Medium-Term Budget Policy Statement [MTBPS] delivered by Enoch Godongwana. South Africa is faced with many economic challenges damaging our economy, but clarity on the long-talked-about South African NEV plan was missing. Intermittent electricity supply, constrained production, poor investment and rising inflation rates all play their part. However, the country needs a clear South African NEV plan to safeguard the future of the automotive sector.


South African NEV plan
There’s still no clear South African NEV plan. Image: Adobe stock

NAAMSA noted that the inevitable road to NEV policy has been long and hard. “We are disappointed that the Minister has decided to kick the NEV policy announcement can down to February next year. However, we are pleased to hear that the National Treasury plans to implement tax and expenditure measures to support the industry’s transition to NEVs,” said Mikel Mabasa, the CEO of NAAMSA.

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“We expected more from the Minister yesterday after numerous engagements we had with Government on this topic. Government understands our challenges as a vehicle producing country with bigger ambitions to grow our global influence as we move to NEVs. Effectively, the Minister has bought himself more time to announce details for NEV policy which will now be during the 2024 Budget Review with considerations to domestic market demand stimulus measures, establishment of renewable energy-based charging infrastructure, and production support,” said Mabasa.


South African NEV plan
NAAMSA wants the President to give the new South African NEV plan. Picture: File.

“South Africa has procrastinated far too long, and we believe that the NEV policy pronouncement should be made by President Cyril Ramaphosa during his State of the Nation Address and supported by fiscal measures the Minister of Finance promised to announce in the 2024 National Budget Review. This is crunch-time for the South African automotive industry, and we can no longer afford to be silent on policy choices the country should make about the future of this important sector in the economic life of South Africa and her people”, Mabasa said.

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From 1995 to 2022, South Africa exported cars to 152 different markets around the world. These totaled 5 641 644 units, with an export value of R1 55 trillion. In 2022 alone, the automotive export value amounted to R227 billion. As one of the most visible sectors attracting foreign direct investments, vehicle and component sector investment in 2022 amounted to R11 billion. And all of it could go away if there is no clear South African NEV plan for the future.


South African NEV plan
Yesterday’s MTBPS aptly illustrates how bad the South African economy is right now. Picture: File.

Yesterday’s MTBPS aptly illustrates how negative economic considerations outweigh the positive. South Africa’s budget shortfall projection for 2023 has deteriorated, reaching 4.9% of the Gross Domestic Product. The Finance Minister announced that government spending will require an average of R553 billion per annum over the medium-term in borrowings. And yet there is no movement on a South African NEV plan.

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What do you think of government dragging its heels on a worthwhile South African NEV plan? Be sure to share your thoughts with our audience in the comments section below. And don’t forget to follow us @TheSANews on X and The South African on Facebook for the latest updates.