Car manufacturers in South Africa are finding it difficult to plan their production lines for future demand because government policy on new energy vehicles (NEVs) remains obscure.
BMW Group South Africa CEO Peter van Binsbergen told journalists in Johannesburg on Wednesday that the company’s exports of NEVs account for about 40% of total output from its Rosslyn plant in Pretoria, with traditional internal combustion vehicles making up the other 60%.
“That 40% is serving the world. In the domestic market, that number is much lower, closer to 10%. The big key that you’ve seen overseas – and what we talk to government about constantly – is that the minute there are incentives in place, you see demand take off. But there are no incentives in South Africa – incentives would give NEVs a new lease on life,” said Van Binsbergen.
At South African Auto Week in 2024, President Cyril Ramaphosa announced that government was working on comprehensive NEV policy guidelines that would include demand- and supply-side incentives to stimulate the country’s transition to NEVs.
But these policy plans have been slow in arriving, leaving manufactures uncertain as to how to allocate investments between traditional internal combustion engine (ICE) production lines and those for NEVs.
With electric and plug-in hybrid vehicle prices generally higher than those of their ICE counterparts, consumers are also reluctant to make the switch.
Consumer incentives
But stimulating the domestic market is not exclusively about spurring the transition away from fossil fuels. Van Binsbergen explained that South Africa’s automotive sector has become overly reliant on exports, with the proportion of exports to domestic sales of locally produced vehicles expanding from one in three to two in three in recent years. Consumer incentives such as tax rebates or subsidies would help stimulate the domestic market to reset this imbalance.
The dynamics of the domestic market do not overshadow the importance of maintaining South Africa’s position as a key exporter to markets in Europe and the Americas. In 2025, Morocco surpassed South Africa as the leading vehicle exporter on the African continent, largely driven by yearslong investments – underpinned by clear government policy along with automotive sector incentives – into EV ecosystems.
Read: South Africa’s EV policy still stuck in neutral
Responding to a question following his presentation, Van Binsbergen said the differentiating factor that has given Morocco an edge over South Africa is that officials there have been decisive in developing NEV policy.
“One thing we need is speed. I have asked my colleagues who work with countries like Morocco, and they say the Moroccan government is much faster than ours. They make decisions and then implement them – we are still talking about an NEV policy,” he said.
Losing key export markets has a direct impact on jobs in the sector. The automotive industry employers some 500 000 South Africans across the value chain in manufacturing and assembly, sales, distribution, and aftermarket services such as repair and maintenance. But as global demand shifts from ICE vehicles to NEVs, the training of factory workers and mechanics needs to shift to address the needs of the developing market. This is not a transition that can happen overnight, meaning policy must be clear for investment in the right skills to flow.
According to Daniel Bester, plant director for BMW’s Rosslyn facility, South Africa does not produce enough skilled workers to meet current market demand, never mind the skills required in NEV value chain. These include programmers, high-voltage electricians, data analysts and battery chemistry specialists. To combat the shortage, BMW has internal programmes to develop the capabilities it needs, with some overflow absorbed by the wider industry.
As government continues to mull over NEV policy and regulation, Van Binsbergen warned that speed is not the only crucial factor impacting the future of South Africa’s automotive sector. The kind of incentives government puts in place will also shape the market and South Africa’s ability to compete with other markets like Morocco and China. He said South Africa’s incentive scheme – at least a far as ICE vehicles are concerned – has been well thought out and has served the industry well.
“We pay duties, and then when we produce cars, and then get those duties back again. So, it’s actually not costing the fiscus anything. It’s our own money that we take back out the pot. So, the thing that’s very important [is that] only a small share, like the investment support, is real money from the fiscus,” said Van Binsbergen. – © 2026 NewsCentral Media
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