Global automaker Stellantis is setting up its first South African car plant this month, but they might be looking to expand further. They’re considering building new-energy vehicles (NEVs) like electric cars, hydrogen-powered cars, or hybrids at the planned R3 billion factory on the southeast coast. However, this decision hinges on whether there’s a local market for these vehicles, according to Mike Whitfield, managing director of Stellantis’ South African unit.
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South Africa’s car industry faces a potential pitfall. The global shift towards NEVs, particularly in the EU, South Africa’s biggest export market, could leave the domestic industry behind. While the government recently established a framework for local NEV production, challenges remain. High import duties on electric vehicles and a lack of charging stations are significant hurdles.
“A local market is crucial,” emphasizes Whitfield. Without a strong domestic market for NEVs, Stellantis might choose to build the plant in a country with higher NEV demand. He also proposes that South Africa focus on exporting NEV components instead of raw materials.
For instance, South Africa produces rare earths, a key component in electric vehicle magnets currently manufactured mostly in China. Whitfield suggests learning from the past, where South Africa exported raw platinum used in catalytic converters made elsewhere.
The new plant, located in the Eastern Cape’s special economic zone, is on track to begin production of Peugeot Landtrek bakkies by late 2025. With an ambitious target of 50,000 vehicles annually within 18 months, eventually scaling up to 90,000, Stellantis is looking to make a significant impact. The company is even exploring using renewable energy to power the plant, further reflecting their commitment to sustainability. Stellantis joins Mercedes-Benz, Volkswagen, and Ford in establishing car manufacturing facilities in the Eastern Cape.
