South Africa’s Electric Vehicle (EV) White Paper has focused public discussion on how quickly local motorists will adopt electric cars, missing the policy’s central purpose.
Instead of focusing on local adoption, the strategy aims to preserve the automotive manufacturing base, protect export competitiveness, and secure investment as the global industry transitions towards new energy vehicles (NEVs).
This is according to WesBank Senior Economist Thanda Sithole, who said South Africa’s automotive industry remains a cornerstone of the country’s manufacturing output, export earnings, and GDP.
“The scale is worth stating plainly: South African manufacturers exported 404,191 vehicles in 2025, the highest export volume recorded since 2007,” he explained.
“Maintaining access to international markets is therefore essential to sustaining manufacturing output, export earnings and valuable foreign exchange inflows.”
The European Union (EU) and the United Kingdom (UK) are the primary destinations for local vehicle exports, and both are transitioning towards battery electric, plug-in hybrid, and hybrid models.
“As demand for internal combustion engine vehicles structurally declines in these markets, South Africa’s automotive industry faces an important strategic challenge,” added Sithole.
“Without adaptation, the country risks a gradual erosion of export competitiveness and global market share.”
He went on to explain that the risks extend beyond exports, adding that future production and assembly mandates will be allocated to countries that demonstrate clear electrification strategies and supportive policy environments.
“As global manufacturers shift investment towards unified NEV platforms, South Africa must remain an attractive destination for future production programmes,” said Sithole.
That being said, local manufacturers are starting to invest in the NEV transition, including factory upgrades, production line modifications, and supplier development programmes.
Sithole said these investments strengthen industrial capability, but added that policy certainty remains equally important.
“Automotive investment decisions are made years in advance, and predictable policy frameworks are essential for securing future production allocations,” he said.
An opportunity for South Africa
There exists an opportunity for South Africa that goes beyond trade, thanks to substantial reserves of raw materials used in battery production and electric mobility supply chains.
Sithole believes expanding local processing, battery manufacturing and component production would increase local value addition, strengthen mining and manufacturing, and shift the economy towards high-value industrial production.
He added that global trends reinforce why the transition matters, with EV sales reaching 21.2 million units in 2025, and China accounting for nearly two-thirds of these.
Europe is the world’s second-largest EV market, contributing 20.3% of global sales, while the United States, by contrast, saw more subdued growth in 2025.
At the same time, emerging markets like India and Brazil are showing how well-designed industrial strategies can accelerate EV manufacturing and adoption even at lower income levels.
Sithole warned that domestic consumer adoption is likely to remain gradual, thanks to affordability pressures, limited public charging infrastructure, and high electricity costs.
He noted that over time, declining battery costs, greater model availability and increased competition should further support adoption.
“Therefore, judging the EV White Paper purely by domestic EV sales tells only part of the story,” said Sithole.
“Its primary purpose is to safeguard South Africa’s industrial competitiveness during one of the most significant transformations in the global automotive industry in more than a century.”
According to the economist, the greater risk facing South Africa is not the slow consumer adoption of EVs, but rather that global manufacturers allocate future investment to countries better positioned for the transition.
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