BYD, China’s leading electric car maker, is in talks to build a factory in South Africa. Both parties are still discussing the details.
No information on the location or timeline is available yet. A local factory would let BYD use South Africa’s key minerals and lower car prices.
The South African Cabinet confirmed they are negotiating with BYD. This comes after BYD’s June entry into Africa with their Atto 3 car.
The statement also mentioned BAIC, another Chinese car maker with a South African factory. However, BAIC hasn’t produced any cars since its 2016 launch.
Cars are big business in South Africa, making up 4.9% of its GDP in 2022. Yet, the government has been slow to back electric cars.
Import taxes are 7% higher for electric vehicles than for gas cars.
Industry leaders are pushing the government to change its electric car policy. They argue that incentives could attract more investment and jobs.
The talks between the government and BYD suggest a shift may be happening.
BYD just introduced two Atto 3 models in South Africa. Their competitive pricing could make electric cars more popular.
A new factory could also make these cars even more affordable.
Background
Electric cars are the future, with many countries phasing out gas cars. South Africa risks falling behind if it doesn’t adapt.
The country mainly exports cars to Europe, where electric demand is high. Not moving to electric production could hurt these trade ties.
BYD’s possible entry is a good sign for South Africa’s auto industry. It signals that international companies see potential in the market.
Previous efforts by BAIC show that execution is as important as planning. If successful, BYD could set a standard for future foreign investment in electric cars.