Summary
- South Africa’s automotive industry is a key pillar of its economy, contributing to GDP and employing a significant number of people
- The industry mostly exports traditional ICE vehicles, but there is increasing interest in PHEVs, with a notable rise in local production
- PHEVs made up a small percentage of total vehicle sales in South Africa in 2024, with BMW and Volvo dominating the market
- PHEVs are seen as a transitional option to full electric vehicles, especially in developing markets with limited charging infrastructure
- There is a potential for South Africa to capitalize on the growing demand for PHEVs and consider increasing production of both PHEVs and BEVs to adapt to changing market trends.
Article
South Africa is home to several vehicle manufacturing and assembly plants, with automakers like Mercedes-Benz, Ford, BMW, Toyota, Isuzu, and Volkswagen producing vehicles in the country. The automotive industry plays a significant role in South Africa’s economy, contributing to GDP and employment. However, the industry is heavily focused on producing internal combustion engine (ICE) vehicles at a time when the global trend is shifting towards electric vehicles (EVs). This presents a potential missed opportunity for South Africa to capitalize on the EV transition.
The export of vehicles and automotive components reached a record amount in 2023, but there was a decline in vehicle exports in 2024 due to various factors such as a slowdown in demand in the EU, stricter emission rules, and competition from cheaper electric vehicle imports from China. This decline emphasizes the need for South Africa to act fast and adapt to the changing automotive landscape. In response to this, some OEMs in South Africa are starting to produce plug-in hybrid electric vehicles (PHEVs), which could help increase the share of electric vehicles manufactured in the country.
The production of PHEVs in South Africa saw a significant increase in 2024, with models like the Mercedes-Benz C-Class PHEV and the BMW X3 PHEV being manufactured locally. While PHEVs currently make up a small percentage of total vehicle sales in South Africa, there is potential for growth as the market evolves. PHEVs have been a topic of debate in the EV industry, with some questioning their role as a transition option to full electric vehicles. However, PHEVs still have a critical role to play in certain niches where battery electric vehicles (BEVs) may not fully meet users’ needs.
In South Africa, the PHEV market is dominated by BMW and Volvo, with models like the BMW X1, X3, and X5, as well as the Volvo XC60 and XC90, featuring among the top-selling PHEVs in the country. The increasing sales of PHEVs highlight the potential for growth and adoption of electric vehicles in South Africa. As the automotive industry evolves, there is a push for South Africa-based automakers to ramp up production of PHEVs and consider adding BEV model production lines to capitalize on the global shift towards electric mobility.
The transition to electric vehicles is becoming more prevalent worldwide, with many markets embracing EV technology as the future of transportation. South Africa needs to adapt to this shift by increasing the production of plug-in hybrids and potentially expanding into battery electric vehicle production. By aligning with global trends and consumer preferences, South Africa can strengthen its position in the automotive industry and secure its place in the evolving market for electric vehicles. As the world moves towards sustainability and reduced emissions, the adoption of electric vehicles is crucial for the future of the automotive sector.
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