subscribe Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Subscribe now
Picture: 123RF/WELCOMIA
Picture: 123RF/WELCOMIA

If his ministers won’t do it, President Cyril Ramaphosa himself must tell the motor industry what are the government’s plans to enable a transition to new-energy vehicles (NEVs) before it’s too late, according to Mikel Mabasa, CEO of industry association Naamsa. 

Mabasa was responding on Thursday to Enoch Godongwana’s medium-term budget policy statement the day before  where the finance minister once again failed to offer clarity on how government will create an environment for the industry to lessen its reliance on petrol and diesel internal combustion engines (ICEs). 

The overwhelming majority of SA-made vehicles are exported, most to countries that plan to ban ICE vehicles in the next few years. While governments around the world encourage their motor companies to switch to emissions-free NEVs, particularly electric vehicles (EVs), SA production is almost exclusively ICE.

The SA motor industry has been waiting for a policy for more than two years. Multinational parent companies of local vehicle and components producers say they need policy certainty to justify spending the billions of rand required to make the leap from ICE to NEV, which also includes hydrogen vehicles.     

However, Godongwana and trade, industry & competition minister Ebrahim Patel have missed a series of opportunities to provide that certainty. A promised policy announcement failed to materialise in October 2021. The industry was then told to expect something with this year’s main budget in February. When that didn’t happen, they were told this week’s medium-term budget would provide clarity, only for Godongwana to put it off again, to next February’s main budget. 

The continued uncertainty is playing havoc with SA’s appeal as an automotive manufacturing destination, says the industry. Some executives say the country may already have missed the NEV boat, with investments that could have come to SA being diverted to more NEV-friendly sites.

Policy vacuum 

Mabasa, whose association represents vehicle manufacturers and importers, thinks it’s time for Ramaphosa to step into the policy vacuum. SA had procrastinated for far too long, he said, so Ramaphosa should make the NEV policy pronouncement during his 2024 state of the nation address, due next February. Godongwana could fill in the blanks by announcing tax and fiscal details in his budget speech later that month. 

“This is crunch time for the SA automotive industry and we can no longer afford to be silent on policy choices the country should make about the future of this important sector in the economic life of SA and her people,” Mabasa said. 

He acknowledged Godongwana had difficult decisions to make, given economic stagnation and the sickly state of SA’s finances. He said the minister had effectively bought himself time by delaying a decision. Nevertheless, Mabasa said he was pleased that Godongwana, in his speech, had firmly committed himself to tax and expenditure support for an NEV transition. 

“It is our considered view that a clearly articulated government support intervention would go a long way in stimulating more demand and it will also accelerate investment and much greater interest in NEV technology and solutions,” Mabasa added. 

subscribe Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Subscribe now

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.