South Africa’s motoring industry will be disappointed to learn it’ll have to wait even longer for a long-overdue policy framework on electric vehicles.

The industry had expected finance minister Enoch Godongwana to announce the country’s new energy vehicle (NEV) policy during his budget speech in parliament on Wednesday, Instead, the minister in effect kicked for touch, saying details of the planned policy will only be announced at next year’s budget speech, expected in the first quarter of 2024.

“The transition to NEVs poses an existential threat to South African vehicle production,” Godongwana said. “This transition will require balancing domestic market demand, establishing renewable energy-based charging infrastructure and supporting production.

“The government plans to implement tax and expenditure measures to support the automotive sector during this transition. Details will be provided in the 2024 budget review.”

The lack of clarity has left companies across the automotive value chain unable to plan for next-generation production cycles, dropping South Africa further behind other African countries such as Egypt and Ethiopia in the transition to EVs.

South Africa’s natural deposits of nickel, cobalt and manganese create the potential for a mineral beneficiation and battery manufacturing industry. Neighbouring Zimbabwe has lithium, which is also used in EV batteries.

“Part of the broader strategy includes collaborating with other African countries to develop battery production capacity on the continent, by pooling the critical-mineral resource base that Africa is endowed with,” said Godongwana.

EV road map

Over and above the taxes government plans to introduce, additional support for the automotive industry will come from the department of trade, industry & competition.

“Over the medium term, government will merge the Small Enterprise Finance Agency, Small Enterprise Development Agency and Co‐operative Banks Development Agency to improve cohesion and support small businesses. The DTIC will reprioritise funds to support the implementation of the EV road map,” said national treasury in its expenditure priorities document, published with the mini budget on Wednesday.

A spokeswoman for the Automotive Business Council, also known as Naamsa, which represents many players the industry, said the organisation is working on a media statement in response to the delay in publication of the policy document. Naamsa has applied significant pressure on government to get the long-delayed document published. – © 2023 NewsCentral Media