naamsa | The Automotive Business Council says it is disappointed that Finance Minister Enoch Godongwana has postponed the long-awaited announcement on government’s new-energy vehicle (NEV) policy to February next year.

Godongwana made this announcement as he delivered his Medium-Term Budget Policy Statement earlier this week.

Government originally promised to present an NEV policy to Cabinet in 2021.

naamsa CEO Mikel Mabasa notes, however, that the auto sector body is pleased that National Treasury plans to implement tax and expenditure measures to support the industry’s transition to NEVs.

“We expected more from the Minister after the numerous engagements we had with government on this topic leading up to the budget announcement,” he adds.

“Government understands our challenges as a vehicle-producing country with bigger ambitions to grow our global influence as we move to NEVs. 

“Effectively, the Minister has bought himself more time to announce details for an NEV policy, which will now be during the 2024 Budget Review, with considerations to domestic market demand stimulus measures, establishment of renewable energy-based charging infrastructure and production support.

“South Africa has procrastinated far too long, and we believe that the NEV policy pronouncement should be made by President Cyril Ramaphosa during his State of the Nation Address, and supported by fiscal measures the Minister of Finance has promised to now announce in the 2024 National Budget Review,” says Mabasa.

He says that it is “crunch-time for the South African automotive industry, and we can no longer afford to be silent on policy choices the country should make about the future of this important sector in the economic life of South Africa and her people”.

From 1995 to 2022, vehicles exported from South Africa to 152 different global markets totalled 5.64-million units, with an export value of R1.55-trillion

Automotive component exports reached R892.6-billion over the same period.

Last year alone, automotive export values reached R227.3-billion, which consisted of a record R157-billion in vehicle exports and a record R70.3-billion in component exports.

In 2022, total domestic NEV sales – hybrids, plug-in hybrids and battery electric vehicles –  showed a year-on-year increase of 421.7%, at 4 764 units, up from 896 units in 2021. 

“It is our considered view that a clearly articulated government support intervention would undoubtedly go a long way in stimulating more demand, and that it will also accelerate investment and much greater interest in NEV technologies and solutions,” says Mabasa.