Investing in new energy vehicle batteries to drive growth in the green automotive economy took centre stage at the 2025 New Energy Vehicle Summit, held at the Gallagher Convention Centre in Midrand.

The two-day summit, themed “Driving Gauteng towards a Green Automotive Economy”, brought industry leaders together to shape the future of electric vehicles.

Addressing participants, Gauteng MEC for Finance and Economic Development Lebogang Maile spoke at length about the negative impact of the imposition of unilateral 30% trade tariffs by the United States (US) on South Africa.

“The South Africa automotive industry is facing a tough operating environment heightened by the imposition of unilateral 30% trade tariffs by the government of the United States, which has consistently been South Africa’s second largest trading partner and key export destination for South Africa’s manufactured vehicles,” he said.

He noted that the local automotive industry is a cornerstone of the economy, contributing 22.6% to the total manufacturing domestic output and supporting over 110,000 formal sector jobs.

“Given that Mercedes-Benz in East London exports at least 90% of its vehicles to the United States, the devastating consequences for the East London Special Economic Zone are evident,” he said.

The tariffs, Maile said, have had a devastating impact on South Africa’s automotive industry, resulting in a significant decline in US exports, job losses, company closures, and a reduced GDP contribution from the sector. 

He added that vehicle exports to the US have plummeted, with a reported 82% drop in the first half of 2025 compared to the same period the previous year.

Regarding the new energy vehicles, he said: “The transitioning to new energy vehicles can safeguard the industry’s global competitiveness.”

According to him, the new energy vehicles are crucial for a just energy transition, as they reduce dependence on fossil fuels and mitigate the impact of price volatility associated with imported fuels. 

Moreover, he said, they could establish South Africa as a regional hub for battery production and new energy vehicle technology.

Maile said: “Recognising this potential, the national government has released green and white papers outlining plans for new energy production infrastructure and skills development. As a result of this intervention, a 150% tax rebate for new energy vehicle production starts in March 2026.”

Renai Moothilal, CEO of the National Association of Automotive Component and Allied Manufacturers, stated that global demand for new energy vehicles is driven by government initiatives, climate goals, consumer preference for eco-friendly products, and technological advancements. 

He noted that growth is largely concentrated in China, which accounted for 65% of electric car sales in 2024, while Africa’s share of global electric vehicle sales was less than 1% in the same year.

Moothilal noted that Africa has largely been absent from the global electric vehicle narrative, presenting either a challenge or an opportunity. In South Africa specifically, electric vehicle sales reached 15,511 units last year, marking a 100.6% increase from 2023.

Mbangiseni Mabudafhasi, acting director for Hydrogen and Energy at the Department of Science and Technology, emphasised the need to boost local tech development and commercialisation through targeted interventions. 

He also talked about the importance of researching and developing new technologies locally, saying that importing these technologies does not benefit the country in terms of job creation.

Professor Mkhulu Mathe, an energy expert from Unisa, noted that South Africa has limited domestic expertise in battery material processing. 

He suggested that this gap could be addressed through industry-education partnerships, scholarship programmes, and an expatriate knowledge transfer programme.

South Africa, he said, is among the leading producers globally of critical minerals, accounting for 93% of iridium, 36% of palladium, 71% of platinum, 81% of rhodium, 94% of ruthenium, and 29% of manganese.

“It will be interesting how many of us are aware of the importance of iridium in our economy or even in our cars, starting from spark plugs to radiation in nuclear medicine and many other things,” Mathe said.

Dr Bheka Zulu, CEO of Tshwane Automotive Special Economic Zone, said with over 100 years of automotive manufacturing experience, South Africa has developed a strong foundation that has positioned it well for the transition to new energy vehicles.

“As a country that has focused on the automotive industry for a number of years we currently have more than 60% production capacity in Gauteng. South Africa is ranked among the top leading automotive manufacturers in the continent,” he said.

rapula.moatshe@inl.co.za

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