The car assembly and manufacturing of car parts is a crucial pillar of the South African economy. Before the Covid19 pandemic, assembly plants in South Africa produced 610,854 vehicles in 2018, all of them powered by combustion engines. 58% of these vehicles were destined for the export market.
According to the National Association of Automobile Manufacturers of South Africa (NAAMSA), vehicles and parts manufactured in South Africa reach 155 markets. The auto industry contributed about 13.9% to South Africa’s export earnings, which at the time amounted to about R164.9 billion from auto exports. The automotive industry also contributes about 7% of GDP and employs more than 110,000 people, which is why the industry is of such strategic importance that it is critical that key decision-makers prioritize conservation. and ultimately its growth. The industry is still recovering from the slowdown of the Covid-19 pandemic, as well as global chip shortages and general supply chain problems. The knock-on effects of the disruptions caused by the severe flooding in KwaZulu-Natal on the automotive supply chain and damage to the Toyota plant have also slowed things down.
As developed countries make plans to increase the share of electric vehicles on their roads, how ready is South Africa to serve these markets as exports contribute to a better market for vehicles made in South Africa? Sales of EVs in many European markets continue to grow. In the UK, for example, plug-in electric vehicles accounted for 18.3% share of the car market in May, up from 14.7% year-on-year. Full battery electricity grew their share almost 1.5× YoY.
In order for South Africa to grow or at least maintain its market share in car exports to the UK and the European Union, it really needs to start accelerating plans to produce electric vehicles locally on a large scale. One of the key factors for this is building a critical mass of skilled labor for electric vehicle production. To help grow this talent pool, the UK has announced 3.7 million (£190,000) in funding to develop new skills in South Africa for jobs in the fast-growing electric vehicle sector. The new aid will fund research to ensure South African students develop the most sought-after skills in the electric vehicle sector, as well as new online training content and support for educators.
Partnerships between the UK and South Africa to unlock the skills of the future also include a collaboration with the Ministry of Science and Innovation on a report on how to improve the country’s skills for a green hydrogen future. Hydrogen energy is a clean and sustainable alternative to coal. The report identifies the kind of skills and training needed and how they can be delivered through South Africa’s technical and vocational education and training (TVET) college system.
The British High Commissioner for South Africa, Antony Phillipson, said:
“The UK has long been a partner in supporting South Africa’s climate ambitions, investing more than R4.8 billion (£250 million) in International Climate Finance in South Africa between 2011 and 2021. In recent years, UK companies have been responsible for 50% of investment in the fast-growing renewable energy sector. This week we were delighted to announce even more partnerships between the UK and South Africa with new support for electric vehicle training and green hydrogen skills research – to ensure South African workers and young people are the biggest beneficiaries of the transition of the country to a greener future.”
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