THERE is no doubt that the future of transportation lies in electric vehicles (EVs). So many global vehicle brands have already launched EV projects and the market segment is rapidly growing as new models enter on a yearly basis. This presents a massive opportunity, despite certain challenges, for automotive component manufacturers and car brands in South Africa.
At the moment, the import duties on EVs in South Africa are very high, which is why there aren’t many on our roads yet. Despite this, Mercedes-Benz, Volkswagen, Audi and other car brands are busy rolling out EV charging stations across the country. This is yet another sign of major brands’ investment 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. Not only will the shift to EV manufacturing bring about job creation and economic growth, but it will also help push the country into a more sustainable way of living with fewer emissions. There is massive potential for EV manufacturing as a result.
SA manufacturing sector already strong
South Africa’s automotive manufacturing sector is already resilient. Many vehicle brands have invested massive sums of money into the local economy. So too have local governments and components manufacturers, including Formex Industries with its new Struandale facility in the Eastern Cape. We have the facilities, assembly lines, manpower and expertise to start manufacturing EVs in South Africa. We even have the lithium mines and the manufacturing facilities for batteries. All that is needed is the shift from automotive brands.
At the moment, internal combustion engines are the only powertrains manufactured in the country, but if car brands shifted their local focus to EVs and invested in the necessary tools, then EVs should account for a larger portion of vehicles manufactured in South Africa.
Our manufacturing sector is supported by excellent export hubs, such as the seaports in Gqeberha, East London and Durban. EV parts could be produced locally and exported around the world, which would not only reduce the cost of EVs in South Africa, but would also benefit the automakers as they can source raw materials, such as lithium, locally too.
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 help invest in the necessary equipment and training for their employees. When the time comes and EV production begins, the private manufacturers and suppliers need to be ready.
Car brands will pay close attention to those businesses that can produce EV parts and assemblies with minimal adjustment necessary. These companies are likely to be awarded contracts for components if they are already set up with the right tools and know-how.
South Africa already has the capacity to add EV components and vehicles to its current manufacturing output, but all of the above elements need to be brought together. This will require close collaboration between car brands, local governments and the private sector. The entire supply chain needs to be efficient, reliable and world-class if South Africa wants to unlock this massive potential.
When EV production is launched in South Africa, it is more likely that certain components will be produced here before full-scale assembly lines are established. One such component would be the lithium-ion batteries that power these vehicles. Formex Industries already manufactures a range of components and assemblies – most of which will still be needed on EVs, so this segment is currently established and ready.
