Stellantis is keen to build electric cars in South Africa — Stellantis will build the Peugeot Landtrek bakkie at its new plant in the Eastern Cape

Stellantis, which will start building its first car plant in South Africa this month, is considering expanding into the production of new-energy vehicles in the country.

The decision, which would involve expanding the planned R3-billion plant on the south-east coast, depends on whether a local market for the vehicles emerges, said Mike Whitfield, MD of the South African unit of the global car maker that produces car models such as Alfa Romeo and Jeep. Those could include electric vehicles, hydrogen-powered cars or hybrids, he said.

In five years “it’s a high probability, but there’s no final decision”, he said in an interview on Thursday at an investment conference in Gqeberha.

At the moment, neither EVs nor hydrogen vehicles are produced in South Africa.

South Africa’s car industry, which accounts for more than 5% of GDP and employs over 116 000 people, is in danger of being left behind by the global switch to EVs, especially in its biggest export market, the EU.

Government has only just put in place a framework for investment in local production of new-energy vehicles and there are still prohibitive duties on the import of EVs. In addition, the local network of charging stations has barely been developed.

“You need a local market,” Whitfield said, saying that in the absence of one such a facility would be built in a country where a significant proportion of output could be sold locally.

South Africa should also look to make components for new-energy vehicles for export rather than shipping abroad minerals needed for the cars, he said. Whitfield gave the example of rare earths, which are produced in South Africa. They are used in magnets in electric vehicles, which are made extensively in China.

Exports

The country, he said, should learn from its experience with exporting raw platinum for use in the manufacture of the pollution-curbing catalysts fitted to internal combustion engines. Few are made in South Africa.

The plant, which will be built in the special economic zone between the ports of Ngqura and Port Elizabeth in the Eastern Cape province, is expected to start production of Peugeot Landtrek bakkies by the end of 2025. The aim is to reach production of 50 000 vehicles per annum within 18 months and ramp up to 90 000 units after that, Whitfield said. It’s also exploring sourcing some of its power from renewable energy, he said.