At the Trade and Industries Policies Strategies’ (TIPS) virtual webinar on the Transition to Electric Vehicles, NAACAM Executive Director, Renai Moothilal, outlined the manufacturing opportunities for the local component industry.
He said that NEV sub-componentry with high localisation potential include electric motors and transmissions (e-axle); power electronic sub-components such as PCB assemblies and housing; and high-voltage electrical distribution components such as wire harnessing.
Other opportunities cover hydrogen fuel cells, thermal management systems and high-voltage batteries, which are estimated to account for approximately 30%-40% of the value of BEVs. By 2035, he said, global demand is expected to grow to 6700GWh from the current installed capacity of 670 GWh.
“To support local battery manufacturing, policy and programme alignment between SADC countries are needed to facilitate the beneficiation of raw materials locally. Also needed are good rail logistic corridors for minerals transport as well as demand certainty led by OEMs.”
The World Bank estimates that SA’s battery storage market can grow from 270 MWh in 2020 to 9 700 MWh in 2030, with a base scenario and 15 000 MWH as a best-case scenario, and the value chain could create 58 000 jobs.
He noted that the business case for South Africa includes its strong automotive policy, as well as SA being strategically located with numerous ports, access to key raw materials, existing manufacturing capability providing key technologies and skilled labour.
He said that NAACAM members have already commenced exporting production for electric vehicles such as forged components, beneficiated materials and fuel cells.
“While these are examples of what local suppliers are already producing for NEVs, a large cohort of NAACAM members are multinational companies that have sister plants across the globe already producing components for NEVs and have NEV-specific R&D, which could be on-shored by their local subsidiaries,” Moothilal said.
“To facilitate NEV component exports, many components produced locally are not power-train-specific, meaning they already have the technologies and capabilities to support domestic NEV production. SA-based component companies have been responding to technology changes for years, as facelift and new models emerge.
“Some tier 1 components differ between powertrain platforms but the change to NEVs does not materially affect vehicle assembly up to chassis such as the body, paintwork and trim.”
In conducting a questionnaire, NAACAM members spread across different sub-sectors were asked to indicate the importance of various enabling factors for an NEV component manufacturing transition. Critical enabling factors include technology and production incentives and OEM demand certainty.
In its review of the EV White Paper, NAACAM welcomed the production-led approach of the White Paper that it said would prioritise the continued growth and development of local manufacturing capability and capacity.
“The Paper balances general competitiveness-enhancing measures such as energy and network industry reforms while also providing support to technology and R&D investments in NEV products and componentry.
“The Paper is also measured in its approach to possible future dominant vehicle technologies through the inclusion of support for developing both an electric battery value chain and commercialising green hydrogen production,” Moothilal noted.