As car manufacturers worldwide embrace the shift to electric vehicles, South Africa has the potential to become a major EV manufacturer and market.
In 2018, the global number of electric cars exceeded 5.1 million, up 2 million from the previous year while the number of new electric car sales almost doubled.
Major European manufacturers such as BMW and Volkswagen are retooling their factories to produce electric-only cars in the near future. Other major global electric vehicle manufacturers include Tesla, Nissan, Chevrolet, Ford, and Kia.
While South Africa faces challenges to the growth and adoption of its electric car market, such as struggling state-owned power utility Eskom, there are also factors that work in the country’s favor.
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Here are 10 reasons why South Africa can become a major manufacturer and market for electric vehicles.
Auto-manufacturing makes up about 7 percent of South Africa’s economy. Seven carmakers run factories in the country including Volkswagen, Isuzu, BMW, Mercedes Benz, Ford, Daimler-Chrysler, and Toyota. In 2018, these manufacturers exported almost 210,000 cars to Europe, Bloomberg reports.
Of the seven carmakers that have established factories producing cars for the local and export markets, three of the brands — Volkswagen, BMW, and Ford — were named among the best electric vehicle manufacturers for 2019, according to Energy Sage.
All seven of the major car manufacturers operating in South Africa — including BMW, Volkswagen, and Nissan — are uniting in an effort to try and persuade the South African government that the future of the automobile is electric. The manufacturers are working together to present their plans and policy suggestions to the government.
The South African government is considering policy changes that would favor electric car imports or production in South Africa, according to Businesstech. This is necessary as the current situation is not favorable. For example, the country’s high tariffs — around 23 percent on imported electric vehicles — stand in the way of progress and have forced the government to consider a policy shift.
Electric cars are not a new phenomenon in South Africa, with a number of major brands already shipping vehicles to the country since 2013. In March 2019, Jaguar Land Rover became the third vehicle company to introduce an EV range in South Africa, with the Jaguar I-Pace. The first was the Nissan Leaf, introduced in 2013, and the BMW i3 was introduced in 2015.
The growth of the South African electric vehicle market is visible in the numbers, even if those numbers are still small. The South African electric vehicle market experienced excellent growth during the past year. The number of electric cars in the country increased by 131.2 percent between 2018 and 2019, from 375 to 867 cars, according to DailyMaverick.
Any solid electric vehicle adoption would rely on the required charging infrastructure. The network of charging stations across South Africa is growing. There are more than 137 charging stations countrywide along major routes and in airports, shopping malls and popular locations. This number is growing all the time thanks to efforts from both the government and the private sector. Jaguar, for example, is investing $2.1 million to launch charging stations across South Africa while BMW is partnering with the state-owned airport management company Airports Company South Africa to launch similar stations at major airports.
Global ride-hailing firm Uber offers electric car options in some of its markets and is keen on incorporating electric vehicles in its strategy. In 2016, it trialed an electric car option in South Africa through a partnership with automobile dealers. South Africa is Uber’s largest African market — serving 1 million active riders through more than 13 000 driver-partners — and that fact could be good news for electric car adoption and manufacturing in the country.
Elon Musk, the founder and CEO of electric car giant Tesla, is South African and has spoken for many years of his desire to bring the brand to his home country. While there are challenges to this at present, it must be considered an advantage that one of the major players in the electric vehicle industry hails from South Africa.
South Africa and China are both members of the BRICS group of countries and share a good relationship. South Africa has been China’s top African trade partner for eight years, while China has been South Africa’s biggest trade partner for nine consecutive years, according to Businesstech. Around 45 percent of electric cars on the road in 2018 were in China – a total of 2.3 million. South Africa could leverage China’s expertise and growing market to develop as a competitive EV manufacturer.
