South Africa and Europe should collaborate on building an alternative “value chain” for electric vehicle components such as batteries to reduce dependence on China, the CEO of BMW South Africa said, calling for a national-level strategy.
South Africa, which accounts for 51% of Africa’s vehicle output, is seeking to position itself as a player in the global EV supply chain. But industry leaders say more policy clarity and investment are needed to unlock its potential.
“South Africa, together with Europe, could put a strategy together to create an alternative value chain for EV batteries, for example,” Peter van Binsbergen said in an interview on Wednesday on the sidelines of SA Auto Week in Gqeberha. “That gives the world an alternative to China.”
China currently dominates global battery cell production, making it difficult for some car makers to meet rules of origin requirements for exports, particularly in Europe. “If you want a battery, it comes from China,” Van Binsbergen said. “We need to get that right.”
South Africa is Africa’s biggest car manufacturing hub. Global car makers like Ford, Volkswagen, BMW and Toyota manufacture models in South Africa for both the local and European markets. Britain and the European Union together consume nearly half of the vehicles South Africa produces.
South African car industry executives want a coordinated national approach to EV development, saying that efforts by individual brands will not be sufficient.
Not moving
Neale Hill, President of Ford Motor Company Africa, said car makers are concerned that the country’s new energy vehicle road map is not moving, despite President Cyril Ramaphosa having announced potential consumer subsidies and stating that hybrids and plug-in hybrids should be included in planned production incentives last year.
“In stark contrast to our lack of progress, consider a country like Ethiopia, which has already over 100 000 EV vehicles on the road versus just over 4 000 in South Africa,” Hill said.
Read: Why Ford is cutting jobs in South Africa
There is a need for urgency as the UK and the EU have committed to ending the sale of new fossil-fuel vehicles by 2035.
The South African government has already announced a 150% tax deduction from next year for qualifying investments in EV and hydrogen vehicle production, trade minister Parks Tau told delegates on Thursday.
South Africa, in partnership with international partners including the World Bank, has also developed a national critical minerals strategy aimed at securing supply chains for the local electric vehicle industry, attracting investment into battery manufacturing facilities as well as EV components.
“If we do not adapt, we risk losing these key export markets,” Tau said. — (c) 2025 Reuters
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