Talks are progressing between BYD and South Africa over a possible investment by the Chinese electric vehicle manufacturer, a top government official said, although no specific timeframe for the next steps has been agreed.
BYD has expressed interest to work and invest in South Africa, according to Parks Tau, the trade, industry & competition minister. “It’s now about taking it to the next level,” he said.
Tau pointed to South Africa’s extensive car-production experience and its access to key resources such as lithium and manganese that are key to battery making. “We’ve got the minerals that are indispensable,” he said.
Leaders from some 50 African countries gathered in Beijing this week for the Forum on China-Africa Cooperation, or Focac, where there have been frequent calls for China to help industrialise African economies by increasing technology transfers and beefing up manufacturing.
Earlier this week, Tau accompanied President Cyril Ramaphosa to BYD’s Shenzhen headquarters, where they were personally greeted by founder and chairman Wang Chuanfu who sought to wow them with the company’s advanced EV technology and car features.
Chinese EV makers are facing geopolitical pressures as they push to sell their cars on international markets. The US has slapped 100% tariffs, effectively shutting them out, and the EU introduced new measures on 5 July that raised duties on Chinese-made EVs to as high as 48%. Both have cited Beijing’s financial backing for the industry and the overcapacity it has encouraged.
Conversations
Tau said such moves have forced the Chinese to rethink what their approach is to international expansion. “But our commitment is to continue to work on this relationship,” he said in an interview on the sidelines of Focac.
He said his government was talking to BYD as well as other Chinese companies in the EV-related industry. “They’ve been part of the conversations we are having here, primarily focusing on ensuring that industrialisation happens on the African continent.”
Read: Uber, BYD in deal to roll out EVs worldwide
On Thursday, Chinese leader Xi Jinping pledged US$50-billion in financial support for Africa over the next three years, including $10-billion in investment by Chinese companies. His number 2, Li Qiang, on Friday pushed for deeper integration into the continent’s economies.
“Chinese companies in Africa should continue to localise their operations, create more local jobs, train more local talent and further contribute to local people’s well-being,” Li said.
While the consumer market for electric and plug-in hybrid vehicles across Africa remains somewhat nascent, Chinese companies in the EV space are making early bets, particularly investments in the supply chain. Xiaomi chairman Lei Jun said at Focac that his company wants to increase investment in Africa and strengthen cooperation with local firms in areas such as EVs.
BYD has entered several African markets, including Tunisia, Rwanda, Morocco and South Africa, following a similar trend of other Chinese car brands, including SAIC Motors and smaller upstart Xpeng. — (c) 2024 Bloomberg LP
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