ELECTRIC VEHICLES: MIR 2021

The report examines South Africa's nascent electric vehicle (EV) market, highlighting a strong existing internal combustion engine (ICE) automotive sector that must transition to avoid losing key export markets. It identifies four primary investment opportunities: the electrification of public transport, local lithium-ion battery production, passenger vehicle manufacturing for export, and EV application in mining and construction. While global EV sales are rising, South Africa lacks specific subsidies and policies to accelerate uptake, and faces barriers such as high import duties (25% for EVs) and a lack of charging infrastructure. The document also details the potential macroeconomic impact of EV adoption, including reduced oil imports and a projected loss in government revenue from fuel levies.

• South Africa's automotive sector is a critical economic driver, contributing 6.4% of GDP and 27.6% of manufacturing output in 2019, with over R500 billion in total revenue.
• The COVID-19 pandemic caused significant disruptions to the South African automotive industry, with domestic production decreasing by 32% and vehicle exports decreasing by 33% by November 2020.
• South Africa faces a strategic risk of losing its primary vehicle export markets, such as Germany and the UK, as these regions implement bans on internal combustion engine (ICE) vehicle sales between 2030 and 2040.
• Public transport is identified as the most viable business case for electrification in South Africa, particularly buses, which are subject to approximately 80% local content requirements for public procurement.
• South Africa is well-positioned for lithium-ion battery (LIB) production due to its mining sector's ability to provide raw materials, specifically holding about 78% of the world's manganese.
• EVs offer significant operational cost and health benefits in underground mining by eliminating tailpipe emissions (PM2.5) and reducing heat, which lowers ventilation and temperature regulation costs.
• High import duties act as a major barrier to EV adoption; EVs are subject to 25% import duties, compared to 18% for ICE vehicles, and can incur an additional ad valorem tax of up to 30%.
• The transition to EVs could improve South Africa's balance of trade by reducing oil imports; introducing one million EVs driving 20,000 km per year would reduce oil imports by 58 PJ/a, saving approximately R8.1 billion annually.
• Widespread EV adoption poses a risk to government revenue because the fuel levy is the fourth largest and most efficiently collected revenue stream for the state.
• South Africa's current charging infrastructure consists of approximately 250 publicly accessible stations, primarily located in Gauteng, with most being AC chargers that take up to six hours for a full charge.

APA

Chege, W. W. (2021). ELECTRIC VEHICLES: MIR 2021. GreenCape. https://greencape.co.za/wp-content/uploads/2022/10/EV_MIR_9_4_21-3.pdf

Chicago

Chege, Wilberforce W. ELECTRIC VEHICLES: MIR 2021. GreenCape, 2021. https://greencape.co.za/wp-content/uploads/2022/10/EV_MIR_9_4_21-3.pdf.

Wikipedia

{{cite report |last1=Chege |first1=Wilberforce W. |title=ELECTRIC VEHICLES: MIR 2021 |publisher=GreenCape |date=2021 |url=https://greencape.co.za/wp-content/uploads/2022/10/EV_MIR_9_4_21-3.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{chege2021electric, author = {Chege, Wilberforce W.}, title = {{ELECTRIC VEHICLES: MIR 2021}}, institution = {GreenCape}, year = {2021}, url = {https://greencape.co.za/wp-content/uploads/2022/10/EV_MIR_9_4_21-3.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }