The transition to electric vehicles: protecting SA’s motor manufacturing industry and its exports

Bronwyn Nielsen speaks to Thabang Mahlangu, the automotive and TFL lead at Nedbank CIB, about South Africa’s journey to mass electric vehicle adoption, the country’s lack of policy and legislative frameworks to drive growth in the EV market, and how the adoption of EV could benefit SA in the future.

Thabang Mahlangu on South Africa’s electric vehicle journey

I think in terms of where we are as a country on the road to electric vehicle mass adoption, I would say we are in our infancy, we really are at infancy because as yet we don’t have the policy frameworks and the legislative frameworks to stimulate mass adoption. Electric vehicles provide such a big opportunity for green awareness for the community. But it also gives an opportunity for us to adopt technologies that are for the future. Whether we’re talking in the consumer space for myself and yourself purchasing cars, or whether we are talking about mass mobility in the bus sector or in the heavy vehicle sector in terms of trucks and that sort of thing, electric vehicles really are the technology of the future.  

On what will catalyse those policy frameworks to come to fruition quickly

I think the custodian of policy frameworks of course is legislative in nature. So the government has a big role to play in that space. I think we have a lot of lobbying from bodies within the automotive value chain, in particular Numsa, that has really tried to push from really looking at the economic impacts of the South Africa’s automotive industry transitioning towards EV. So the lobbying is there. The lobbying is there from us as financial services providers and banks that will fund some of these activities in order to stimulate the discussions with the government. And it will take that will really we’ve seen in other industries, for example in the power industry with the IPPs. What the might of the pen was in terms of opening those industries up to other players outside of the the dominant electricity provider in South Africa. So we need that sort of legislative push from a policy framework perspective that will catalyse the acceleration towards that. 

On whether the electric vehicle poses a serious threat to the automotive industry in SA

I don’t think it’s a threat. I think it’s actually an opportunity to grow new skills and grow new industries or support industries in the country. It’s an opportunity for us to skill our engineers and technicians in the technologies of the future. It’s an opportunity for fresh investment into manufacturing and in the country. Of course, there are issues around just transitions in some of these topics that need to be managed. I think we can have a parallel process where both sides of us, internal combustion engines and electric vehicles and I guess in fairness other types of combustion engines to the future. They can co-exist and walk the journey really into the future in the electricity space as an example of people who thought that. But we’ve got all these IPS that have come that have actually created jobs, technical jobs, tech heavy jobs that prepare us in order to support the skills development of the country across the spectrum. So my belief is that there’s a co-existence that can happen there. 

On whether EV is still way more expensive than your traditional motor vehicle combustion engine

EVs have actually come down in terms of the total cost of ownership, right? So the acquisition cost is one thing, but the total cost of ownership refers to the maintenance of the vehicle over a span of time. So parts of replacement and that sort of thing. Right. It’s actually we’ve seen more emerging research that’s showing us that the total cost of ownership for EVs is actually becoming more and more attractive. The differential in terms of that is becoming less and less in terms of the total cost of ownership. And once we have the policy framework and the incentive framework in place, that should drive it further down. We are seeing the price of batteries in general going down, which is a big input cost, just as an engine would be a big input cost to an internal combustion engine vehicle. All of the scale that the EV environment is getting is driving costs down over time. 

Read also: