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This section provides an overview of the global electric vehicles (EV) industry to provide context for the South African industry and discusses the unfolding of the EV market in the South African context.
The year 2022/2023 was a significant year for EVs, which saw 14.2 million new Battery Electric Vehicles (BEVs) and Plug-in Hybrids (PHEV) delivered in 2023 (EV Volumes, 2024). There were 10 million pure electric BEVs and 4.2 million PHEVs and traditional hybrid electric vehicles sold in 2023, globally. This growth can be largely attributed to increased availability of EV models on the global market as well growing cost competitiveness due to rising fuel prices. Many national governments have implemented policies to phase out the sale of internal combustion engine (ICE) vehicles according to the International Council on Clean Transportation. Figure 1 shows a map of the countries which have committed to a 100% phase in of zero emission cars and light delivery vehicles.
* Includes countries, states, and provinces that have set targets to only allow the sale or registration of new battery electric vehicles (BEVs), fuel cell electric vehicles (FCEVs), and plug-in hybrid electric vehicles (PHEVs). Countries such as Japan with pledges that include hybrid electric vehicles (HEVs) and mild hybrid electric vehicles (MHEVs) are excluded as these vehicles are non plug-in hybrids.
** The Canadian province of the British Columbia has a regulation to enforce its 2040 target, as do California, Massachusetts, New York, Oregon, Vermont, and Washington for their 2035 targets. The European Union (EU) also has a regulation renforcing its 2023 target; it is applicable to the member states of the European Economic Area (EEA), that is the 27 EU member states and, pending adoption by the EEA Joint Committee, to some or all EEA European Free Trade Association (EFTA) states, which include Iceland, Liechtenstein, and Norway. Norway has set a 2025 phase-in target and Austria, Denmark, Greece, Iceland, the Netherlands, and Slovenia have set 2030 phase-in targets’ but those are not binding.
*** Zero-Emission Vehicle (ZEV) Declaration signatories to 2.A committed to phase-in targets by 2035 for leading markets and by 2040 globally. Countries with existing official targets (binding and non-binding) are not separately highlighted, including Austria, Belgium, Canada, Cape Verde, Chile, Croatia, Cyprus, Denmark, Finland, France, Greece, Iceland, Ireland, Liechtenstein, Lithuania, Luxembourg, Maita, Netherlands, Norway, Slovenia, Spain, Sweden, and the United Kingdom.
**** Zero-Emission Vehicle (ZEV) Declaration signatories to 2.B committed to work intensely toward accelerated proliferation of zero-emission vehicles.
Figure 1: Countries committed to a 100% phase in of sales of zero emission cars and light delivery vehiclesSource: International Council on Clean Transportation, 2024
There has also been significant growth in countries which have adopted policies to 100% phase in the sale of zero emission buses as shown in Figure 2. Public transport is seen as a strong business case for electrification due to high mileage and diesel consumption with low operating margins in the bus industry. There are additional benefits to using electric buses for public transport due to the reduction in noise and air pollution, which improves the user experience for the commuter.
* New medium- and heavy-duty vehicles at least 30% zero-emission in 2030 and 100% no later than 2050. Not necessarily reflected yet in an official state policy document such as a climate or transport strategy/plan, in a law, or in a similar framework.
** New medium- and heavy-duty vehicles 30% zero-emission in 2030 and 100% by 2040. Not necessarily reflected yet in an official national policy document such as a climate or transport strategy/plan, in a law, or in a similar framework. Other national and state level global MoU signatories are: Aruba, California, Curacao, Liechtenstein, Luxembourg, Quebec, Scotland, Sint Maarten, and Wales.
*** Targets apply to new energy vehicles (NEVs), which include battery electric, hydrogen fuel cell electric, and plug-in hybrid electric power trains.
Figure 2: Countries committed to a 100% phase in of sales of zero emission medium and heavy duty busesSource: International Council on Clean Transportation, 2024
The freight and logistics industry also has characteristics of high mileage and fuel consumption and is a largely profit driven sector which would benefit from the operational cost savings of transitioning to an electric fleet. Improvements in battery technology, range, and recharging time over the past year have increased the operational and economic feasibility of electric medium and heavy duty trucks in the freight and logistics industry globally. There have been a number of successful pilot projects which have collected field data for the first time to prove this business case.
Note: Governments with an at least 40% sales target for zero-emission new trucks.* New medium- and heavy-duty vehicles at least 30% zero-emission in 2030 and 100% no later than 2050. Not necessarily reflected yet in an official state policy document such as a climate or transport strategy/plan, in a law, or in a similar framework.
*** New energy vehicles (NEVs), REFER TO battery electric, hydrogen fuel cell electric, and plug-in hybrid electric power trains.
Figure 3: Countries committed to a 100% phase in of the sales of zero emission medium and heavy duty trucksSource: International Council on Clean Transportation, 2024
Global battery electric and plugin-hybrid EV sales have grown steadily, year on year, since 2015, with projections suggesting this trend will continue well into 2030 (Figure 4).
Figure 4: Projections for global battery electric and plugin-hybrid EV salesSource: EV Volumes
There are currently no lithium-ion (Li-ion) cell manufacturers in Africa with global production largely centred around China, South Korea, and Japan as shown in Figure 5. CATL retains the highest market share in 2023 at 34% of the production market. BYD is in close second at 16% and LG comes in at third with 15% of global production.
Figure 5: Global market share of Li-ion cell manufacturing production by original equipment manufacturer (OEM) and country of originSource: Visual Capitalist, 2022
The African continent is home to many of the mineral reserves which are required in the EV and Li-ion cell manufacturing value chain. Figure 6 shows that there is great potential for the development of an integrated regional manufacturing supply chain in Southern Africa. This wealth of mineral resources is an important industrialisation lever which can be used to unlock economic growth and job creation in the region.
Figure 6: Reserves of electric vehicle minerals in the African continent
South Africa is still largely an EV import market with limited local manufacturing of EVs and components locally with the exception of electric two- and three-wheelers. Li-ion cell importers in the South African market are largely assembling battery packs for stationary battery energy storage systems, EV retrofits and electric two- and three-wheeler manufacturing. Figure 7 below shows the EV value chain in South Africa and the current market bottlenecks.
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