The Chinese hybrid and electric-vehicle (EV) manufacturer Build Your Dreams (BYD) is in talks with the South African government to open a new factory on local soil.
In a statement from Cabinet released at the end of August, it said “South Africa is negotiating with BYD, the Chinese automaker and the world’s largest electric-vehicle manufacturer, for possible opening of a manufacturing plant in South Africa.”
“This is in addition to the opening of the BAIC manufacturing plant (another Chinese automaker) in South Africa.”
No further announcements were made about the potential construction timeline, location, or model that will be produced at the pending BYD facility. The South African subsidiary told Engineering News that it would only comment on the matter “at a later stage.”
The BAIC plant referred to by Cabinet was built in the Coega Special Economic Zone in the Eastern Cape in partnership with the state-owned Industrial Development Corporation and boasts a production capacity of 100,000 units a year, but despite opening its doors in 2016, it has yet to produce any vehicles, the reason for this being unknown.
EV production in South Africa
While the details are still limited to say the least, the announcement that BYD is potentially entering South Africa in a production capacity is welcome news for the local automotive industry.
The world is rapidly moving away from fossil fuels and towards an electric future, with South Africa standing to lose access to its biggest markets and consequently its foothold in the global car manufacturing sphere if it does not start producing EVs or their related parts.
Automotive production forms the backbone of the country’s manufacturing industry, accounting for a substantial 21.7% of the sector and contributing 4.9% to its GDP in 2022.
The government, however, is dragging its feet on implementing EV-friendly policies, with this category of vehicles and their components currently being taxed 7% higher than petrol and diesel cars when being imported into South Africa.
Several industry stakeholders including Naamsa, the Automotive Business Council which represents the voice of the largest companies in the business, have called on government to revise its strategy on EVs to incentivise investment and employment, as well as mitigate the risks associated with slowing demand for petrol and diesel autos in regions such as Europe, which is South Africa’s biggest export destination.
The news that government is engaging with BYD to establish a hybrid or EV plant on local soil is therefore one of the first signs that it is heeding the calls of its citizens and taking steps towards retaining South Africa’s competitiveness in the global automotive manufacturing enterprise.
BYD only recently entered the domestic market with its Atto 3 EV, offering two models at a relatively competitive starting price of R768,000.
A local factory could also go a long way in bringing down the barrier to entry for these new-energy vehicles and further stimulate sales and EV adoption.
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