naamsa responds to the national budget speech

“DISAPPOINTMENT ON NEW ENERGY VEHICLE SUPPORT”

The Automotive Business Council has welcomed Minister Enoch Godongwana's highly anticipated budget speech which addressed several important national topics affecting the country today. Without going into details, the auto sector as a responsible corporate citizen, understands and welcomes the focus given to the energy crisis, tax cuts for households and businesses, increases in various social services, including health, education, and social grants, and the R903billion earmarked for infrastructure spending.

While the auto industry welcomes the balanced pronouncements made by the Minister of Finance, we recognise that the budget was a real balancing act at the back of a host of challenging shortcomings caused by the worst electricity rationing ever, depressed households’ affordability, and the disintegrated local government coalitions affecting service delivery, as well as other issues facing small and distressed businesses and ordinary households.

As it relates to the automotive industry, naamsa welcomed the announcement of a 25% tax rebate, up to R15,000.00 for residential solar installations and the rebate guarantee scheme for businesses that have been hit hard by ongoing power outages and rising energy costs. This relief bodes well for the energy needs of many local auto specific businesses who are impacted negatively by the systemic energy supply challenges.

However, while the Minister was progressive in his announcements generally, the automotive industry was particularly disappointed that no solid commitment was made on the support programme for the manufacturing of NEVs and NEV components in the country. The Minister did not provide any policy guarantees for the South African automotive industry’s inevitable transition to New Energy

Vehicles notwithstanding SA's commitments to just transition and decarbonisation strategies covered by the $8,5 billion allocation. The industry further reiterated that the delays with the promulgation of the NEV White Paper continues to pose as one of its biggest risk towards investment and retention of jobs in many of our local production lines.

As outlined in the recently released naamsa Thought Leadership Paper, the country's policy makers must demonstrate tangible and deliberate intent to create and stimulate a competitive environment for the NEV market through various government support schemes for NEV production in order for the South African automotive industry to remain globally relevant, competitive and strong.