Toyota South Africa Motors (TSAM) anticipates that the government will provide a support package to lower the price of New Energy Vehicles (NEVs) to make them more accessible and generate volumes.
TSAM Chairman and CEO Andrew Kirby confirmed Tuesday that he is confident that the Automotive Green Book released by the government “will translate into formal regulations and government support.”
“It is for this reason that we have set our prices accordingly so that hybrid technology can be more accessible,” he said.
Read: Increase in demand for electric vehicles in SA
Speaking at a function at TSAM’s Prospecton plant in Durban to celebrate the opening of the Corolla Cross production line in South Africa, Kirby He said the cost of NEVs is simply not feasible for many clients without the kind of government support packages that are available in other countries to establish strong demand.
Kirby said the Green Paper details concepts that will allow the automotive value chain to pivot toward NEVs.
The Minister of Commerce and Industry and Competition, Ebrahim Patel, said that based on the imperatives of climate change, his department is studying the development of electric vehicles and the launch of the Corolla Cross production line “is a very important step in that direction. ”.
“We published the Green Paper for public comment and we will bring it to the Cabinet as soon as the different contributions have been compiled and the financing modalities have been drawn up,” he said.
Green Paper Process
When the Green Paper was published, the stated goal was for the strategy to be finalized within 90 days of its publication to allow policy proposals to be presented to Cabinet for consideration in October 2021.
It seems unlikely that this goal will be met.
However, Mikel Mabasa, CEO of the Naamsa Automotive Business Council, believes that the Green Paper process “is still ongoing”.
Mabasa said that the Department of Commerce and Industry and Competition (dtic) has indicated that it has received a large number of comments from different stakeholders and they are reviewing each and every comment.
“We obviously want to give you a chance to finish those comments because the last thing we want is for you not to consider everything.
“We hope that you can come back to us with some very definite timelines on what the next steps will be after you have gone through the comments. They have not announced the new deadlines yet, ”he said.
Kirby told Moneyweb after the formal event that a lot of work has been done on cost modeling in the show and is aware that the dtic is still receiving more information.
“But I suspect it will be finalized in the next six months,” he said.
President Cyril Ramaphosa said it is appropriate that the Corolla Cross hybrid vehicle be launched a week before the COP26 Climate Change Conference.
He said the government has called on leaders of developed economies to support South Africa’s efforts to green the national economy and address the country’s ambitious climate change goals through equally ambitious grants and concessional financial support.
Ramaphosa said the South African government has identified three key priorities for climate action:
- For Eskom to reduce its carbon emissions,
- For electric vehicles to be produced in South Africa, and
- For the green hydrogen economy to accelerate locally.
“The government published a draft document for public comment on a roadmap for the production of fully electric vehicles, which will be taken further based on discussions with international partners and local industry.
“The launch of the Corolla Cross Hybrid is an important step on our journey to transform the automotive manufacturing business into a success story in the green industry. It will take a lot of work. But we must, ”Ramaphosa said.
Kirby said Toyota has invested a total of R6.5 billion in its Prospecton plant over the past five years, and the Corolla Cross represents R2.6 billion of this investment.
He said the introduction of the Corolla Cross model has created a total of 575 new jobs at the plant, while more than 1,200 direct jobs were created at the component supply base.
The significant focus during the project was to maximize local content for this model, resulting in the localization of 621 parts with 56 local suppliers, 16 of which are black-owned, and has brought in five new Tier-1 black-owned suppliers. . on board, he said.
“The economic contribution with local TSAM suppliers for this project is more than R1.4 billion per year.”
Journey to Carbon Neutrality
Kirby said that, more than any new model TSAM has brought to market, the introduction of the low-emission Corolla Cross in hybrid form is important because it is an integral part of Toyota South Africa’s roadmap towards carbon neutrality.
This is not just limited to reducing vehicle emissions, but encompasses activities across the entire value chain, including your suppliers, manufacturing facilities, offices, and parts warehouses.
Kirby said TSAM plans to significantly accelerate these activities and aims to increase its solar photovoltaic capacity at the site from the current five megawatts (MW) to 31MW, and plans to buy back the rest of its electricity needs from renewable resources alone by 2028. .
“So our goal is to be 100% reliant on renewable energy by 2028,” Kirby said.
“As a pilot step towards carbon neutrality, we are investigating ways to eliminate or offset the balance of our carbon emissions, especially those that originate from the use of natural gas in our production processes.
“Our goal is to invest more than R2 billion to achieve these goals in the next seven years,” he said.
Kirby added that TSAM is committed to adopting NEV in the South African market and must also keep up with green regulations in its export markets, such as the UK and the European Union.
Therefore, the launch of South Africa’s first locally produced hybrid electric vehicle not only gives local customers the opportunity to pursue their own shift towards green mobility, but also “lays the foundation for our long-term sustainability as an exporter. relevant and competitive globally. ”
Kirby added that to drive this change as quickly as possible, TSAM itself has a very ambitious goal of selling more Corolla Cross hybrid models than traditional internal combustion engine models by 2035.
He said only 224 NEVs were sold in South Africa in 2020 and only 322 to date this year. “We plan to fundamentally change the NEV landscape in South Africa from a few hundred NEVs a year to over 10,000 …
“As policy and government support becomes clear… Toyota South Africa will increase the availability of NEV in South Africa with carbon-reduced, zero-emission vehicles.
“We will provide hybrid electric vehicles, plug-in hybrid electric vehicles, battery electric vehicles and even fuel cell electric vehicles as soon as possible, but always in tune with the true practical needs of our customers and always considering the most important way to combat our common enemy, carbon, “he said.
Kirby said that TSAM truly believes that the best way to reduce carbon emissions as soon as possible is to offer a variety of solutions to its customers so that they can choose the best options for their various circumstances.
“Our roadmap to carbon neutrality promises to be an exciting journey and Toyota plans to play a critical role in the transition to green mobility in South Africa and on the continent.”