FILE PHOTO: Staff member hooks up a charging cable to EV at a charging station in Liuzhou (Reuters)

JOHANNESBURG - The Automotive industry has urged the government to create a market for electric vehicles in South Africa or face the prospect of the sector being left behind international developments.

Nissan South Africa managing director Mike Whitfield questioned what vehicles and components the industry would export and supply to the world if a market was not created in South Africa for electric vehicles.

Nissan and BMW have been pushing the South African government to reduce the import duty on electric vehicles to make them more affordable.

Whitfield said the government had acknowledged the trend towards electric and hybrid vehicles but not yet done anything to assist the industry to create a market for them, with production focused totally on internal combustion engine vehicles.

“You cannot look at this (electric vehicles) as short term technology,” Whitfield said. “The world’s going there. You can either make a decision that you are part of the journey or you are left behind. If you are left behind, what components are we going to make and what are we going to export?”

Last month, reports emerged that the Department of Trade and Industry was opposed to reducing protection on the import of electric vehicles as a way of increasing domestic demand.

The department's director of the automotive unit, Tinyiko Mafuwane, was quoted as stating that the government viewed electric vehicles as a future industrialisation opportunity and a level of protection would be necessary to ensure the viability of any local manufacturing of electric vehicles.

Whitfield did not have an issue with this policy stance but stressed the need to first create an electric vehicle market in South Africa if the industry was to eventually move to the local production of electric vehicles.

Electric vehicle-related investments would not be made until there was a market in South Africa, he said.

Premium car maker Volvo reported last month that its aim was for electric cars to make up 50percent of its sales by 2025 while BMW confirmed in March that its future was electric vehicles.

Whitfield said India had just announced that by 2030 all vehicles in that country would be electric and have 70percent local content.

Tim Abbott, the managing director of BMW South Africa, previously lamented the fact that import duties on electric vehicles were higher than on internal combustion engine vehicles and were classified in the same high-duty bracket as milk and golf carts.

Reduction

However, Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa (Naamsa), confirmed on Monday that the government had decided to reduce the import duty on electric vehicles from 25% to 18% but the date from which this reduction would be effective still had to be finalised.

Vermeulen said this would mean the duty on electric vehicles would be the same as automotive products originating from the EU in terms of the EU-South Africa free trade agreement, including motor cars.

He stressed that nowhere in the world had electric vehicles gained market acceptance or sales been successfully generated without government support in the form of tax grants or direct incentives to make them more affordable.

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- BUSINESS REPORT ONLINE