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South Africa's electric vehicle plan

3 May 2013

The Department of Trade and Industry (DTI) has announced plans, including incentives for manufacturers and possible tax incentives for consumers, aimed at establishing an electric vehicle industry in South Africa.

Speaking at the launch of the Electric Vehicle Industry Roadmap in Johannesburg on Thursday, Trade and Industry Minister Rob Davies said that South Africa should not be "left behind" in greening technologies and inititiatives, adding that there was an overwhelming case for the transport industry to reduce its carbon footprint.

"We are well aware that as development takes place, transportation demand will grow. What is absolutely evident is that vehicle manufacturing must adopt new technology [for lesser emissions]," Davies said.

South Africa is the 13th largest global emitter of carbon dioxide. The automotive sector is one of SA's most carbon-intensive, accounting for approximately 20% of emissions; it is also the third-largest contributor to air pollution in the country.

The DTI believes a local electric vehicle industry would help mitigate the impact of harmful gases on the environment while promoting investment and job creation in the automotive industry.

'A very generous quota for manufacturing'

The roadmap proposes an incentive package, to be incorporated within the Automotive Production Development Programme (APDP), for manufacturers that produce electric vehicles.

The APDP aims to raise the volume of cars manufactured in South Africa to 1.2-million annually by 2020 as well as to diversify the automotive components chain.

"The proposal is that we will incentivise the automotive sector to manufacture electric vehicles in South Africa by introducing a very generous quota for manufacturing under the APDP to benefit from the overall incentive scheme," Davies said.

Manufacturers who produced 5 000 electric vehicles annually would qualify for the incentive, with the government reimbursing them for 35% of their production costs over three years, according to the roadmap.

The DTI said it was also looking at various possible tax incentives to encourage South Africans to buy electric vehicles.

Manufacturers welcome the plan

The roadmap was developed with input from the Council for Scientific and Industrial Research (CSIR), the Industrial Development Corporation (IDC) and the Department of Science and Technology.

In June, the DTI will engage industry stakeholders, including the National Association of Automobile Manufacturers of SA and National Union of Metalworkers of SA, on the road map, as well as invite public comment on the plan, before taking it to the Cabinet in September.

Davies said the roadmap would be constantly monitored and reviewed as the industry was experiencing rapid technological advancement that would need to be taken into consideration.

Nissan South Africa CEO Mike Whitfield, Toyota SA CEO Johan van Zyl and BMW CEO Bodo Donauer, who were all present at Thursday's launch, were unanimous in welcoming the initiative.

"It"s a tremendous initiative and a good start to working with all stakeholders. We will fully support it," Whitfield said, adding that cooperation between the government and industry was important, not only for the legislative framework but also for public awareness.

Van Zyl said the roadmap was "a long term plan. It is a process whereby we have to work together to first of all establish the infrastructure.

"From the motor industry side, the technology has already been developed and is available, whether it's electric or hybrids. In the future, [most] vehicles will use alternative technology," Van Zyl said.

"This is the right time to start. If we don't start sometime, we will be left behind."

SAinfo reporter and SAnews.gov.za