New energy vehicle (NEV) sales in South Africa recorded a considerable year-on-year increase of 421.7% between 2021 and 2022, increasing from 896 units to 4 764 units.

NEV sales, however, remain negligible as a percentage of overall new-vehicle sales and it is, therefore, imperative that the country finalises its policy around this to bolster this segment, speakers noted during a press conference hosted by naamsa | The Automotive Business Council at its SA Auto Week event, which is being held this week in Johannesburg.

The speakers noted that an NEV policy would encompass both the environmental factors (early adoption) and production support (investment mobilisation) needed to drive growth of this segment.

Sales of battery electric vehicles breached the 500-units-a-year mark in the country for the first time ever in 2022.

For the year-to-date to August, compared to the same period last year, plug-in hybrid sales increased by 37%, traditional hybrid by 54.9% and electric vehicles increased by 128.5%.

naamsa president Billy Tom emphasised that the organisation had been engaging with government for a long time around finalising the country’s policy for NEVs.

He said the recent announcement that this should materialise by the end of this year was feasible, with this supported by a recent series of intense financial conversations with government bodies and Finance Minister Enoch Godongwana.

Looking at the industry at large, for the year-to-date to September, new-vehicle sales were 401 315 units, compared with 529 560 in 2022.

Local production also fell, with 399 543 units produced in the year to date to September, compared with 550 367 in 2022.

For the year-to-date to August 31, vehicle imports improved by 6.6% compared with the same period last year. For the import market, however, new passenger, and light commercial and heavy commercial vehicles declined by 7.1%, 5.5% and 30%, respectively.

Medium commercial, extra heavy and bus sales increased by 31.6%, 14.5% and 28.4%, respectively.

For 2022, passenger import sales were recorded at 292 905, accounting for 88% of overall import sales. 

naamsa expects that domestic vehicle sales will increase by 6.3% to 563 000 units for this year, while exports are expected to increase by 8.3% to 380 900 units, production by 10.6% to 614 900 units and imports by 1.3% to 327 000 units.

Looking ahead, speakers highlighted the need to optimise the local market, through a two-fold approach of driving mobility inclusion and ensuring the maintenance of of product diversity.

The future of production also brings a skills gap challenge. To this end, naamsa informed that it had initiated a comprehensive skills gap analysis to investigate this issue and explore how to rectify it, with this slated for release before the end of the year.

Another element that was emphasised was the need to bolster transformation in the industry.