After 27 years of predictability, SA automotive policy ‘needs a revolution’.
After decades of automotive policy consistency to attract foreign investors, does the SA government have the nerve to perform an about-turn to stop them leaving?
Though incentive structures have changed in the intervening 27 years — through the 2013 automotive production and development programme and 2021 SA automotive masterplan — each policy stage has built upon its predecessor. Investors like certainty, which is why the masterplan runs to 2035. In principle, there’s nothing to stop SA vehicle manufacturers from building EVs. Masterplan investment incentives — which allow vehicle and components companies to claim back up to 30% of their investments — are the same whatever the engine. The local subsidiaries of Mercedes-Benz and Toyota already build small numbers of hybrid EVs, with dual ICE and electric motors.
The delay, it seems, is caused by the question of where incentive money will come from in a struggling economy — particularly as EV buyers here, as in the rest of the world, are generally well off. Even that is only a temporary solution. From 2035, many markets will add hybrids — both the plug-in and non-plug-in versions — to the banned list.
The masterplan aims to increase SA vehicle production to 1.4-million by 2035. That’s nearly three times the 499,000 built in 2021 and more than twice the projected numbers for this year and 2023. It’s a long shot, made even more unlikely if SA loses its main export markets. “SA is in danger of becoming stuck making a legacy product that no-one wants,” says Mabasa.
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