South Africa has identified three key priorities for climate action, including increased production of electric vehicles, President Cyril Ramaphosa has said.
The state will also focus on reducing carbon emissions at Eskom and fast-tracking plans for a green-hydrogen economy, Ramaphosa said on Tuesday in a speech at a ceremony to mark the start of production of hybrid cars at a Toyota factory. The government has published a draft paper on a roadmap for increased production of fully electric vehicles, which will be presented to potential investors, he said.
“We have called on international leaders to support South Africa’s efforts to green our economy and address our ambitious climate change goals through equally ambitious grants and funding support,” Ramaphosa said.
Toyota has begun producing a vehicle known as the Cross, which has a combined internal-combustion engine and electric motor, at a factory in Prospecton in South Africa’s KwaZulu-Natal province. The company could make 4 000 of the cars by 2025 if the availability of batteries increases, Ramaphosa said.
Toyota is investing R2.6 billion in the production of Cross – the first time a hybrid vehicle is manufactured commercially in SA.
The vehicle will be exported to around 40 countries, in a bid to cement Toyota South Africa Motors’ position as a global player.
About 111 hybrids can be manufactured per day at the plant, depending on demand. It is expected that it will add about R1.4 billion per year to SA’s economy.
Speaking at the opening, Ramaphosa said the event represented “more than just a vehicle coming off an assembly line”.
“I applaud Toyota for its courage and vote of confidence by pledging this investment already at the investment conference in 2019. Japan remains a long-term investor in SA,” said Ramaphosa.
“It is also important for the green economy and skills development in the country as well as driving our industrialisation process,” he said.
He also praised Toyota for continuing to invest in SA, and KwaZulu-Natal, in the wake of the July unrest.
The president jokingly said he might apply to be employee number 8 000 at the facility. It currently provides 7 999 jobs.
Nearly a quarter of the jobs at the plant – some 1 700 – are new.
The president referred to the master plan for the automotive industry and said the aim is to create investor confidence when they make long-term decisions.
“Localisation is a key pillar of SA’s economic recovery plan,” said Ramaphosa.
Referring to the late Johan van Zyl, former executive chair of Toyota South Africa Motors (TSAM), who died earlier this year due to Covid-19 complications, he said: “Johan van Zyl was a visionary who would have been proud of the launch today and of improving the business climate in the country.”
Toyota has created 575 new jobs in the plant and a further 1 200 new jobs have been created in the supplier companies.
Ramaphosa said the auto industry is one of the drivers of our localisation programme and a significant contributor to gross domestic product, accounting for more than 100 000 jobs.
“It is a big magnet for foreign direct investment.”
He also revealed that the seven local light vehicle producers invested a record R9.2 billion in 2020, while the component sector invested R2.4 billion during the same period.
Ramaphosa believes that these investments are made possible by an enabling policy regime in the form of the new version of the masterplan, the Automotive Production Development Programme, which came into effect in July 2021.
Through the masterplan, government aims to grow the industry over a 15-year period to reach 1% of global production.
In addition, the State is looking at increasing the local content of South African assembled vehicles to 60% from 40% and double employment to at least 224 000 jobs.
“The plan seeks to transform the industry across the value chain to bring in Black South Africans and young people and to deepen value addition,” said the President.
He added that Toyota was also looking at increasing the number of new local suppliers from the global supply chain, which is key in the Economic Reconstruction and Recovery Plan.
“I am advised that there are 56 local suppliers for this new model, of which 16 are Black-owned companies.”
Ramaphosa believes that these efforts will contribute to the common goal agreed to at the National Economic Development and Labour Council to reduce the country’s overall import bill by R200 billion over the next five years.
The President said South Africa has identified three key priorities for climate action. These include Eskom reducing its carbon emissions, electric vehicles to be locally produced, and the green hydrogen economy to be fast-tracked.
Toyota South Africa CEO Andrew Kirby said the company has invested over R6.1 billion in the plant over the past five years.
“So, we’re therefore committed to further developing and strengthening our business in South Africa.”
According to Kirby, Toyota South Africa also plans to change the New-Energy Vehicle (NEV) landscape in South Africa, from selling a few hundred to well over 10 000 units per year.
