New energy vehicle sales to overtake combustion motors by 2035 – Minister Patel

2 February 2023

As South Africa starts to shift towards electric vehicles (EVs), there is no doubt that these will become more popular than traditional internal combustion engine cars, LDVs, and trucks, and this move has government’s backing.

This is the word from Minister of Trade, Industry, and Competition, Ebrahim Patel, who was addressing the recent South African Auto Week conference. He said that sales of passenger EV cars will outstrip those of combustion engines by 2035.

Industry is, however, awaiting the conversion of a Green Paper on this subject into a White Paper. Initially published in May 2021, it was meant to be with Cabinet for its thoughts by October 2021.

However, this has not happened, due to financing constraints as government’s purse is stretched as it deals with infrastructure and socio-economic issues. This delay has drawn criticism from those in the industry.

However, a costing exercise involving original equipment manufacturers and the National Union of Metalworkers of South Africa has been completed, which led government to the conclusion that it needs to shift from a singular focus on incentives to a broader one in terms of greater production of EVs. The balance of timing of production and consumer incentives is “absolutely critical,” he noted.

South Africa cannot afford to be left behind as it is a major exporter of vehicles to the UK will be around 75% of cars made locally are shipped there – and that internal combustion-based engines from 2030 will be prohibited by the European Union.

“That costing exercise convinced us that we needed to rethink the elements of the package that we had in mind, shifting from an initial focus to see how we can incentivise the consumer market in South Africa, into a shift with a greater emphasis on the production of electric vehicles,” Moneyweb quoted him as saying.

Given the recent Medium-Term Budget Policy Statement, Patel was hopeful that work could start based on the National Budget to be tabled next February as there are signals South Africa is heading in the right direction.

South Africa’s automotive sector accounts for five percent of gross domestic product. However, energy constrains need to be considered. Fortunately, government has opened up the grid so that independent power producer can add power to it without limits.

Eskom’s rolling blackouts are costing the country around R4 billion a day when stage four hits. If not for the loadshedding, the economy could be between eight and 10 percent bigger.