Published on October 12th, 2019 | by David Zarembka0
Will South Africa Build Electric Vehicles?
October 12th, 2019 by David Zarembka
Like Germany is to Europe, South Africa is the manufacturing powerhouse of sub-Saharan Africa. In particular, it has 8 automobile assembly plants. The companies are BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Renault, Toyota, and Volkswagen. In 2018, South Africa produced 610,854 vehicles. Last year, over 200,000 vehicles were exported to Europe, 140,000 to Africa, and the rest sold domestically. I myself, living in Kenya, own a 2007 Isuzu pickup truck manufactured in South Africa. This industry is a significant factor in South Africa, as it contributes 7% to the South African economy. South Africa is about the 25th largest producer of vehicles in the world and clearly the largest in Africa.
Production of vehicles increased only a little more than 1% last year, and at best another 1% this year. The National Association of Automobile Manufacturers of South Africa (Naamsa) has noted the decline of internal combustion engine (ICE) vehicle sales in Europe, China, the United States, and elsewhere and has become concerned the EV revolution could leave South Africa “behind in the global switch to greener vehicles.”
Currently, South Africa has imported fewer than 1,000 electric vehicles. The Jaguar I-Pace and the BMW i3 are the only electric cars currently being sold in South Africa. GridCars, in cooperation with Jaguar, BMW, and Shell, is the largest installer of public charging stations and claims to have 200 EV charging stations in South Africa, which is about 5 times the size of the United Kingdom. One of the major impediments to the adoption of EVs in South Africa is this lack of charging stations. You need the horse (charging stations) in order to pull the cart (EVs).
Another obstacle, according to Mike Mabasa, the CEO of Naamsa, is that Eskom, the largest power provider in South Africa, just reported a loss of $1.5 billion and will need government bailouts of $8.8 billion in the next three years. As Mabasa said, “The utility has been forced to implement intermittent rolling blackouts and is reliant on coal, which is out of step with the environmentally friendly advantages of producing electric cars.” The EV industry will therefore have to also add privately-owned renewable energy projects to the mix. In short, there is a lot to do to introduce EVs in the country.
Believe it or not, Nissan, BMW, and Volkswagen are in talks with the automobile industry to promote the EV revolution in South Africa. This includes the possible production of some EV models in South Africa, both for internal consumption and export. By the end of this year, Naamsa together with interested auto companies plans on presenting to the South Africa government a detailed plan on how this revolution can be jumpstarted in South Africa. As Mike Whitfield, Nissan’s chairman for southern Africa, said, “The country needs to move forward and bring in new technologies. The rest of the world will move very fast and if we don’t get going, we will be left behind.”
South African born Elon Musk has indicated that Tesla will be bringing its right-hand-drive cars to South Africa by the end of the year.
Will this revolution happen? Does this imply that South Africa has seen the handwriting on the wall? Remember that talk (particularly from the legacy auto companies) is much easier than action. Will the South African auto industry overcome the obstacles and move into the brave new world of electric vehicles, or will it become consigned to the dust bins of history?