The motor vehicle assembly and component manufacturing industry is a key pillar of South Africa’s economy, contributing just more than 6.4% of the country’s GDP and 27% of manufacturing output but e-mobility could change that.
While the COVID-19 pandemic caused a sharp decline in South Africa’s ability to export vehicles during 2020, the global market for EV sales rose 41% during that time
The local EV market may still be small, SA ranks 5th globally in the ratio of public EV charges to vehicles. Only Korea, Chile, Mexico, Indonesia and the Netherlands have more chargers per EV than South Africa.
A green paper on developing the advancement of new energy vehicles in South Africa was open for public comment until the beginning of June, on establishing a clear policy foundation to govern the country’s vehicle and vehicle component manufacturing industry.
The discussion paper aims to address key policy issues that will also look at how to manage a balance between kits for vehicles built in South Africa versus imports of completely built-up EV. This paper indicates the market’s direction and looks at how the industry as a whole has to change.
In their Electric Vehicle Market Intelligence Report (EV MIR) for 2021, GreenCape identifies some of the opportunities coming up in the e-mobility sector, which apply to both SMMEs and larger firms.
E-mobility as business opportunities in SA have serious potential
Wilberforce Chege, GreenCape Senior Energy Analyst, points out that several local SMMEs launched in the e-mobility space in 2020. These companies offer electric scooters, electric bikes, battery assemblers and even software companies providing vehicle telemetry, tracking and monitoring software and systems, tapping into opportunities opening up.
“For the larger automotive companies, they have gone from barely registering the possibilities of electric vehicle manufacturing just a few years ago, to fully embracing them. Now every major manufacturer has an electric vehicle strategy, and this shift is continuing to accelerate rapidly as they seek to grow their capacity for electric vehicle and lithium-ion battery manufacturing, as well as rolling out charging infrastructure across the country,” said Chege.
The EV MIR looks at investment opportunities relating to local manufacturing and electrification of public transport, local lithium-ion battery production, local passenger vehicle manufacturing as well as EV use in construction, retail and underground mining.
GreenCape’s report points out total revenue from the sector was more than $35.6 billion (R500 billion) in 2019, with the industry employing up to 900,000 people directly and indirectly. As this market shifts towards e-mobility, GreenCape sees the possibility of the Western Cape Atlantis Special Economic Zone for Green Technologies becoming a key hub or sustainable mobility in Africa.
Developed annually in partnership with the Western Cape Government’s Department of Economic Development and Tourism the MIRs highlight investment opportunities and highlight relevant legislation context, potential market barriers and risks in energy services, utility-scale renewable energy, electric vehicles and water.
GreenCape also publishes a Sustainable Agriculture MIR in partnership with the Western Cape Department of Agriculture and a Waste MIR in partnership with the City of Cape Town. You can read the 2021 EV MIR online.