South Africa’s shift towards helping manufacturers participate in the global move to electric vehicles (EVs) is a double-edged sword, threatening over 100,000 jobs in the country if policymakers don’t tread lightly. <\/p>\n\n\n\n
The automotive industry has lamented South Africa’s sluggishness in introducing legislation to help manufacturers participate in the global shift to EVs, the most recent being Volkswagen (VW). <\/p>\n\n\n\n
In a widely covered interview with Reuters, CEO of VW Passenger Cars, Thomas Schaefer, stated<\/a> that South Africa is fast becoming an undesirable location for manufacturing cars amid the shift toward EVs due to issues such as load-shedding, rising labour costs, and problems with Transnet.<\/p>\n\n\n\n EVs and their components imported from Europe are subject to a 7% higher tax than petrol- and diesel-powered vehicles and their parts. <\/p>\n\n\n\n This leads to increased production costs and higher prices for EVs, which, in turn, affects their sales and hampers investment potential.<\/p>\n\n\n\n With the European Union and United Kingdom planning to ban the sale of new internal combustion vehicles from around 2035, VW South Africa risks losing the bulk of its export markets over the next decade if it doesn\u2019t pivot to EV production sooner rather than later \u2013 and VW is one of many automakers that face this risk. <\/p>\n\n\n\n The automotive industry accounted for 4.9% of South Africa\u2019s gross domestic product and 12.4% of exports last year, with manufacturers directly employing about 110,000 people \u2013 which are at risk if South Africa falls behind the industry’s evolution to EVs. <\/strong><\/p>\n\n\n\n By the same token<\/strong><\/p>\n\n\n\n On Monday (4 December), Trade, Industry and Competition Minister Ebrahim Patel published a White Paper that outlines a comprehensive electric vehicle (EV) roadmap for South Africa and the structure of a suite of policy interventions tailored to the automotive industry.<\/p>\n\n\n\n