RECOMMENDATIONS TO ADVANCE SOUTH - AFRICA’S NEW ENERGY VEHICLE MARKET - AND DOMESTIC SUPPLY CHAIN

The South African NEV Project Team’s recommendations to support the transition of the South African automotive industry to a NEV dominated market, while continuing to develop the local industry in alignment with the objectives of the SAAM, are summarised in Table 1. [...] The value of the subsidy will be determined by the type of NEV being subsidised, the effectiveness of support for the planned NEV transition, and the cost of the incentive to the government fiscus. [...] Modelling the impact of the NEV transition on the competitiveness of locally assembled vehicles for the domestic market, holding all local and imported values equal, but adding the imported electric component costs that would result in the 12% HEV, 43% PHEV and 52% BEV price differential in the selling price of the vehicle, indicates a major deterioration in the attractiveness of local assembly fo. [...] Key is determining appropriate policy levers to support the transition of the domestic market to 20% NEV consumption in 2025, 40% in 2030 and 60% in 2035, while simultaneously not increasing the cost of vehicles in the beleaguered domestic market and supporting the continued development of the local automotive value chain, in alignment with the objectives of the SAAM. [...] Critically, the project team believes that, in combination, the recommendations will support the realisation of the national government’s objective of transforming the South African automotive market from an ICE-based market to a NEV-dominated market within the period of the SAAM.