SA Auto Week drives the shift to electrified cars

Global sales of battery-powered vehicles reached 6.75-million units in 2021, a 108% rise over 2020, and though SA is still well behind the curve with only 2,689 new-energy vehicles (NEVs) sold between January and August this year, it represents an increase of 1,000% over the same period in 2021.

How SA will navigate the shift to NEVs — which include fully electric and hybrid vehicles — is a central theme in SA Auto Week taking place in Johannesburg from October 24-30. The first-time event sees industry stakeholders from around Africa and the world meeting at the Kyalami International Convention Centre.

Hosted by automotive industry body Naamsa, it brings together all 48 vehicle brands in SA for a three-day conference under the theme: “Reimagining the Future Together — The rise of the African Auto Industry: Investing in new energy vehicles, infrastructure and people”.

According to event partner AutoTrader, SA Auto Week comes at an appropriate time with the global automotive business moving to electric vehicles (EVs).

“The SA motor industry — and indeed the global automotive business — stands on the precipice of great change. Central to that change is the move to electric vehicles, which are essential to the future of transportation and indeed the survival of the automotive industry, ” says George Mienie, CEO of AutoTrader.

“With the future of the auto industry in Africa under the microscope, numerous questions have been raised on the readiness of the SA and African market — specifically when it comes to battery electric, hybrid cars and the future of online automotive shopping  in SA. Never has there been a greater need for dialogue within our industry.”

The long-term survival of SA’s automotive manufacturers requires them to change from producing internal combustion engine (ICE) cars to EVs, but while most of these vehicles will be exported, the expensive prices of EVs together with SA’s patchy electricity supply remain deterrents for potential NEV adopters.

“SA’s current critical energy crisis is the major limiting factor to our evolution in this space,” says Declan Jones, WesBank Head: Marketplace & Ecosystems & CX. 

“The reality is that, at least initially, these vehicles will be restricted to a niche population with the ability to afford NEVs. While vehicle prices are reducing, the access to charging ports and cleaner energy options will burden the consumer more than just the cost of the vehicle.”

The impact will also be felt at the dealer level, particularly those dealerships that also service vehicles because there will be less demand for servicing of NEVs. Dealers will need to adjust their business models to cater for this loss of revenue, he says. 

“Consideration also needs to be given to other economic and social challenges unique to SA, such as the impact on revenue collections through fuel taxes, the impact on fuel forecourt employees, powering NEVs on an already constrained grid, how rising electricity costs will impact the charging of NEVs, the evolution of the taxi and public transport systems to NEVs and the availability of suitable vehicles to power commercial fleets.”

SA’s automotive manufacturers are pushing government to finalise a policy on the future of NEVs due to the imminent banning of ICE vehicle sales in a number of countries, which would mean the ICE vehicles produced in SA would run out of export markets.

Government has delayed implementing a policy, which could include tax and cashback incentives offered to local EV buyers as in many other countries, which could reduce the price gap between EV and ICE cars.