The Africa head of Ford Motor Co (F.N) said the South African government must deliver policy certainty on electric vehicles (EVs) within six months to save its automotive industry.
Three quarters of cars produced by South Africa’s auto industry, which accounts for 5% of gross domestic product and more than 100,000 jobs, are exported, mostly to Europe.
But with Britain planning to ban sales of new petrol and diesel cars from 2030 and the European Union in 2035, the local industry risks losing thousands of jobs and billions in revenue in the absence of a government plan for EVs.
“We need policy certainty, literally, within the next six month period,” Neale Hill, President of Ford Motor Company in Africa, told Reuters in an interview on Friday.
South Africa’s trade and industry ministry said it had previously indicated a policy paper would be out by November 2021 but the deadline could not be met due to “variety of issues”.
“There is a commitment to conclude this matter soon,” it said.
The government issued an Automotive Masterplan in 2018 to help local makers achieve 1% of global production, increase the use of local materials to 60% from 39% and raise employment, among other objectives. It did not include any policy on EVs.
Hill, who is also the President of South African carmakers’ lobby NAAMSA, said auto companies wanted the government to clarify what parts of the master plan are still up for support.
Ford in March boosted its spending on EVs to $50 billion through 2026 as the Dearborn, Michigan-based company tries to catch up with Germany’s Volkswagen (VOWG_p.DE) and industry leader Tesla (TSLA.O).
A carmaker takes around four years for an investment decision to convert into an actual funding in a factory, Hill said, adding globally auto companies were making such decisions and South Africa was not featuring in them.
“I’m concerned that (the South African) government’s delays and lethargy on this is going to end up costing us having a seat at the table,” he said.