South Africa must manufacture electric vehicles for market access
Written by: Yunus Kemp
The South African automotive industry needs to move towards the manufacturing of electric vehicles (EVs) to maintain export market access.
Such a transition would also assist in decarbonising the South African transport industry.
This key insight is part of GreenCape’s 2023 Electric Vehicles Market Intelligence Report (MIR).
The report focuses on five categories: EVs, water, sustainable agriculture, energy services and large-scale renewable energy services.
Have you read?
South Africa: Promising green economy investment opportunities
Electric vehicles to reduce South Africa’s Greenhouse Gas emissions
The Electric Vehicles MIR points out that South Africa’s largest automotive export market is the European Union, which has banned the sale of new Internal Combustion Engines (ICE) vehicles by 2035.
“In addition, the European Green New Deal aims to ensure that the Eurozone is carbon neutral by 2050, which is expected to place further restrictions on automotive exports due to the carbon footprint associated with manufacturing in South Africa and transportation to the European market.”
Therefore there is a need for the South African automotive industry to “transition towards the manufacturing of EVs to maintain export market access and to assist with the decarbonisation of the South African transport industry.”
“This manufacturing transition would need to be accompanied by the use of renewable energy for manufacturing and logistics to meet the carbon neutral requirements of the European Green New Deal by 2050.”
The report notes that South Africa is a signatory to the Paris Agreement and has announced its ambition to limit greenhouse gas (GHG) emissions to 398-510 metric tonnes of carbon dioxide equivalent (MtCO2eq) by 2025, and to 350- 420 MtCO2e by 2030 (DFFE, 2021).
“The South African Green Transport Strategy (2018) estimates that the transport sector contributes 10.8% of the country’s total GHG emissions. According to the Climate Transparency Report (2021) South Africa’s transport sector contributed to 12% of South Africa’s GHG emissions from fuel combustion.
“South Africa aims to reduce transportation related GHG emissions by 5% by 2050 (South African Green Transport Strategy, 2018).”
Have you read?
Global electric vehicle sales close to one in five sold
#FridayFact as October Transport Month ended this week, the National Green Transport Strategy of South Africa has Strategic Pillar 8 on the promotion of hybrid & electric vehicles@Dotransport @GovernmentZA #uYilo #OTM2022 #SouthAfrica #RoadtoCOP27 #ElectricVehicle #HEV #BEV pic.twitter.com/MfFeDB2gga— uYilo Electric Mobility Programme (@uYiloZA) November 4, 2022
Electric vehicle sales surge 55% in 2022, led by China with 60% of global #EV sales. Report by @IEA predicts further 35% growth in 2023, with ambitious policies and battery production driving the shift towards sustainable transport— World of Energy (@woenergy) May 5, 2023
Report: https://t.co/CBdKIyLLv7#sustainability pic.twitter.com/YkddfyMWK7
Investment opportunities in SA EV market
Since GreenCape’s 2022 Electric Vehicles MIR, there have been several important developments in the sector.
The EV policy includes:
- The South African Green Transport Strategy has now been ratified by all provinces with an ambition to reduce the GHG emissions of the transport sector by 5% by 2050.
- The European Union officially banned the sale of all new internal combustion engine vehicles by 2035, which will put pressure on the South African automotive market to transition to the production of EVs to protect the export market.
- The European Green New Deal with its target of ensuring that the Eurozone is carbon neutral by 2050 will increase the pressure to use renewable energy for industrial processes to protect existing export markets.
GreenCape’s Market Intelligence Reports are published in partnership with the UK’s Partnering for Accelerated Climate Transitions (PACT) programme, the Friedrich Naumann Foundation for Freedom and the Western Cape Government Department of Agriculture.
Non-profit GreenCape’s 2023 Market Intelligence Reports are available online. ESI
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