SA and Europe should collaborate on building an alternative “value chain” for electric vehicle (EV) components such as batteries, to reduce dependence on China, the CEO of BMW SA said, calling for a national-level strategy.
SA, which accounts for 51% of Africa’s vehicle output, is seeking to position itself as a player in the global EV supply chain. But industry leaders say more policy clarity and investment are needed to unlock its potential.
“SA, together with Europe, could put a strategy together to create an alternative value chain for EV batteries, for example,” Peter van Binsbergen said in an interview on Wednesday on the sidelines of an automotive conference. “That gives the world an alternative to China.”
China dominates global battery cell production, making it difficult for some automakers to meet rules of origin requirements for exports, particularly in Europe.
“If you want a battery, it comes from China,” van Binsbergen said. “We need to get that right.”
SA is Africa's biggest automotive manufacturing hub. Global automakers such as Ford, Volkswagen, BMW and Toyota assemble models in SA for the local and European markets.
Almost half of the vehicles that SA produces are destined for Britain and the EU.
SA car industry executives want a co-ordinated national approach to EV development, saying that efforts by individual brands will not be sufficient.
Neale Hill, President of Ford Motor Co. Africa, said carmakers are concerned that the country’s new energy vehicle plan is not moving, despite President Cyril Ramaphosa having announced potential consumer subsidies and stating last year that hybrids and plug-in hybrids should be included in planned production incentives.
“In stark contrast to our lack of progress, consider a country like Ethiopia, which already has more than 100,000 EV vehicles on the road compared to just over 4,000 in SA,” Hill said.
There is a need for urgency as the UK and the EU have committed to ending the sale of new fossil-fuel vehicles by 2035.
The SA government has already announced a 150% tax deduction from next year for qualifying investments in EV and hydrogen vehicle production, trade minister Parks Tau told delegates on Thursday.
SA, in partnership with international partners including the World Bank, has also developed a national critical minerals strategy aimed at securing supply chains for the local EV industry, attracting investment into battery manufacturing facilities as well as EV components.
“If we do not adapt, we risk losing these key export markets,” Tau said.
Reuters
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