Original equipment manufacturers' perspectives of barriers to the adoption of electric vehicles in South Africa

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2023

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University of the Witwatersrand, Johannesburg

Abstract

The introduction of EV’s to the automotive industry is not new, there is evidence that the first electric vehicle was developed more than three decades ago (Chege, 2021), however the pursuits of its development at the current moment have become increasingly aggressive due to some of the technological breakthroughs and environmental advantages it brings forth. The environmental degradation due to global warming caused by greenhouse gas emissions has become a global concern and mission to address. Automotive vehicles are amongst the highest contributors to these emissions. EV’s offer solutions to environmental degradation. Electric vehicles offer less noise pollution, smaller carbon footprint through the life cycle of the vehicle compared to their combustion engine counterparts. Furthermore, EV’s have challenged countries to rethink their energy distributions entirely. Due to the benefits EV’s bring forth, adoption has thus increased across the world over the years. Much of this increase in adoption numbers is owed to assistance offered by government and OEMs in the form of incentive schemes during the purchase phase and in ownership costs. There are however challenges which continue to hinder other countries from adopting electric vehicles, especially developing countries such as South Africa. This paper unpacks issues around the poor adoption of EV’s from an OEM’s perspective in South Africa. The seven local OEM’s stakeholders are some of the greatest enablers for the adoption. South Africa is known as the gateway to Africa through its diversified supply chain, it further houses the highest number of OEMs in Africa. Studies from the 2022 Delloitte’s consulting report shows that combustion engine vehicles are still leading in sales locally, and government’s focus is more on the export market (Deloitte , 2019). The EV market might be growing globally post Covid-19 throughout the world but local sales contribution is small. The study uses semi structured qualitative interviews conducted with 15 industry experts from different OEM’s, government, and academia. It then uses the TOE framework and literature from published papers and journals to unpack these findings. Issues which emerged from the analysis include lack of charging infrastructure, energy complexities with regards to an overloaded energy grid which cannot further support EV adoption or home charging. Other issues included government support with regards to regulations, enforcement and enabling policy development. Lack of public acceptance of EV’s due to high ownership costs such as import tax. Other issues noted include lack of incentives as compared to countries with leading EV sales. Product development issues such as batteries and driving range were noted. This study is aimed at enabling decision makers in the academic institutions, automotive OEMs, and government bodies on key topics that could promote EV sales locally if addressed. It further identifies the linkages and relationships of the issues. These recommendations made stand to benefit OEMs through improved sales which can drive production volumes and thus employment in the automotive industry. Future studies can be conducted to rank the identified issues for a more focused approach. They can also examine issues from a customer’s perspective, drawing on Insights from the business vs customer, or simply demand vs Supply

Description

A Research Report, Submitted in fulfillment of the requirements for the degree of Master of business administration (MBA) to Wits Business School, Faculty of Commerce, Law, and Management University of the Witwatersrand, Johannesburg, South Africa 2025

Keywords

Automotive industry, Original equipment Manufacturer, Barrier of Electric Vehicles penetration in South Africa, Electric vehicles, UCTD

Citation

Kupa, Ramaabele Yolanda. (2024). Original equipment manufacturers' perspectives of barriers to the adoption of electric vehicles in South Africa [Master’s dissertation PhD thesis, University of the Witwatersrand, Johannesburg].WireDSpace.https://hdl.handle.net/10539/43725

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