100,000 jobs in South Africa under threat: minister

 ·7 Dec 2022

Minister in the Presidency Mondli Gungubele has warned that if the automotive industry does not decarbonise and manufacture more electric/hybrid vehicles, the sector could face losing over 100,000 jobs in years to come.

Speaking at a portfolio committee meeting on Mineral Resources and Energy on Tuesday (6 December), Gungubele said that decarbonisation domestically and abroad has significant implications on the environment, economy, government, society and jobs at large.

The committee was meeting on South Africa’s energy transition investment plan for 2023-2027, which outlines the way forward for achieving a greener economy that shifts away from reliance on fossil fuels.

One of the fundamental priority sectors that forms part of the roughly R1.5 trillion plan to transition the economy is new energy vehicles.

A shift towards manufacturing new energy vehicles is crucial to align the country with international trends in the motor industry, the minister said.

Local car manufacturers who export to the European Union have been urged to decarbonise by 2030. This is the date at which the European Union will stop importing international combustion engines from South Africa.

According to the National Automotive Association of South Africa (Naamsa), the EU is South Africa’s main export region for cars – so this move will have a massive impact on local production.

Earlier this year, Naamsa said that an expected 40% of all vehicle sales in Europe would be new energy vehicles by 2030, and this is likely to increase to 80% by 2040.

“If we don’t move in pace with that call – to new electric vehicles – no fewer than 100,000 jobs are under threat. In other words, in that sector, we lose our status as a stakeholder and trading partner in the sector beyond that period,” said Gungubele.

Jobs are not the only thing South Africa could lose – billions of rands in exports are on the line, he said.

Mike Mabasa, the CEO of Naamsa, said that a push toward manufacturing electric vehicles is the most important recommendation made by the government in its trade and industry policy strategies.

“It is clear that we cannot ignore electric vehicles if we want to continue doing business with Europe. It will have a huge impact on the country if we lose R201 billion in export earnings a year.”

“We don’t want our main export markets to say that they are no longer interested in ICEs (internal combustion engines) because of their emission targets and that they are taking their business elsewhere. We need to remain relevant,” said Mabasa.

Under the Just Energy Transition’s Investment Plan, R128 billion is expected to be invested in the country’s new energy vehicles sector.

According to the department on mineral resources and energy, investment in the sector will be focused solely on decarbonising the automotive sector and supporting transitioning the supply chain to greener manufacturing.


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