Electric vehicles (EVs) are without a doubt the mode of transportation of the future. With so many global car manufacturers already launching EV projects, the market for these vehicles is expanding quickly as new models are introduced on a yearly basis. Despite certain challenges, this presents a considerable opportunity for South African brands and component manufacturers.
There aren’t many EVs on our roads yet because of the high import duties in South Africa at the moment. Despite this, brands like Mercedes-Benz, Volkswagen, Audi and others are hard at work constructing EV charging stations all across the country. This is yet another instance of how well-known brands are investing in renewable energy and battery-powered vehicles.
Many of these brands have assembly lines in South Africa, but the vehicles being produced are still using internal combustion engines. The shift to EV manufacturing will assist the country to move toward a more sustainable way of life with fewer emissions in addition to generating jobs and economic growth.
SA’s manufacturing sector is already strong
The South African automotive manufacturing sector is already resilient. Numerous brands have made significant financial investments in the local economy. Local governments and component manufacturers, like Formex Industries with its new facility in Struandale, have followed suit.
We have the facilities, assembly lines, manpower and expertise to start manufacturing EVs in South Africa. We even have battery manufacturing facilities and lithium mines. However, the only powertrains manufactured in the country at the moment are internal combustion engines. If brands shifted their local focus to electric vehicles and made the necessary investments, EVs should account for a larger portion of the vehicles made in South Africa.
Excellent export hubs such as the seaports in Gqeberha, East London and Durban support our manufacturing sector. The cost of EVs in South Africa could be reduced by local production and export of the parts, which would also be beneficial for the automakers as they could source raw materials like lithium locally.
Private sector has a role to play
While the government and foreign car brands have their tasks, the local private sector can play a crucial role too. They can assist in making investments in the equipment and training that their employees need. Private manufacturers and suppliers must be prepared for when EV production begins.
Car brands will pay close attention to companies that can produce EV components and assemblies with minimal adjustment necessary. If these businesses are equipped with the necessary resources and skills, they are more likely to be awarded contracts for component work.
South Africa already has the ability to increase its current manufacturing output to include EV components and vehicles, but all of the aforementioned factors must come together. Car brands, local governments and the private sector will need to work closely together on this.
If South Africa is to realise this enormous potential, the entire supply chain must be efficient, reliable, and of the highest calibre. It is more likely that certain components will be produced in South Africa prior to the establishment of large-scale assembly lines when EV production begins here. The lithium-ion batteries that power these cars are one example of such a component.
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