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Figure 13 Local Production of Passenger Vehicles

Source: South Africa Automotive Export Manual 2015

Whilst this bodes well for conventional vehicles, the support for alternative and more
sustainable technologies has been less successful. Currently, South Africa is investing in
the exploration of too many technologies instead of focusing on becoming competitive
in one. This is inefficient as many resources are spent on R&D in various fields, leaving
few funds available for supporting a particular technology into production – the Joule
as a case in point.

In 2013, the Department of Trade and Industry released the Electric Vehicle Industry
Roadmap which outlines the proposed role of government in facilitating a greater local
demand and production of EVs. The policy document included demand stimulation,
public education, investment support and an accommodative regulatory framework.
Government committed to the purchase of 3 000–5 000 electric vehicles per year from
2015. Companies who produce more than 5 000 EVs annually will be reimbursed 35% of
production costs over three years. However, this is only 5% more than a normal vehicle
and stakeholders say the number of vehicles to be produced needs to be lowered in
the early stages in order for it to be effective. This incentive is not only available to local
companies but multinational firms manufacturing in South Africa as well.

Whilst this is a step in the right direction, they have failed to integrate the EV
industry roadmap properly with the ADPD and other policy surrounding automobile
manufacturing. This will limit it from becoming part of the core automotive approach.
The current approach rather seems to be to stay aware of developments, but not to
jump in to heavy investments while there is still significant market risk and uncertainty.
However, this risk is fast disappearing as more countries begin to develop their own
local EV production policies, and demand continues to increase. Once the market has
expanded and there is global consensus surrounding the opportunities EVs bring, the
market will be over-crowded and it will be too late. The small window of opportunity for
South Africa to enter the market will therefore not be around forever.

36 QUARTERLY ECONOMIC BULLETIN 2016