Johannesburg - South Africa’s Automotive Business Council, Naamsa, has weighed in on the recent Budget Speech, expressing concern that the country could miss the electric car boat.
Although Naamsa generally welcomed Minister Enoch Godongwana’s 2023 plan, and recognised the balancing act that it needs to achieve, the motor industry body said it was disappointed that no solid commitment was made on the support programme for the manufacturing of New Energy Vehicles (NEV) and related components in South Africa.
“The minister did not provide any policy guarantees for the South African automotive industry’s inevitable transition to New Energy Vehicles notwithstanding SA’s commitments to just transition and decarbonisation strategies covered by the $8.5 billion (R155bn) allocation,” Naamsa said.
“The industry further reiterated that the delays with the promulgation of the NEV White Paper continues to pose as one of its biggest risks towards investment and retention of jobs in many of our local production lines.”
Naamsa said South Africa’s policy-makers needed to demonstrate tangible and deliberate plans to create and stimulate a competitive environment for the NEV market through various government support schemes for production.
Although sales of hybrid and electric cars are increasing in South Africa, there is still no purchasing incentive for NEVs. Fully electric cars in particular are on average 52% more expensive than their internal combustion counterparts, according to Naamsa.
The industry body did welcome other aspects of the 2023 Budget speech, however, particularly the 25% tax rebate, up to R15 000 for residential solar installations, as well as the rebate guarantee scheme for businesses that have been hit by ongoing outages.
“This relief bodes well for the energy needs of many local auto specific businesses who are impacted negatively by the systemic energy supply challenges,” Naamsa commented.