The adoption by South African motorists of new energy vehicles (NEVs) is set to be boosted by the completion of the adjudication process for a tender worth hundreds of millions of rand for the installation of more than 100 additional charging stations on major routes countrywide.
Mikel Mabasa, CEO of automotive business council Naamsa, confirmed it has finalised the adjudication of the tender and made a recommendation “to our principals in terms of the preferred candidate”.
The project is driven by Naamsa on behalf of locally based original equipment manufacturers (OEMs) and vehicle importers and distributors.
Mabasa said Naamsa cannot announce the successful candidate yet because its recommendation has not yet had the final stamp of approval from its principals.
“We have recommended one company and also recommended that this company should bring in at least three more local black-owned companies who can understudy their work for skills transfer, skills development and, of course, for black economic empowerment (BEE) purposes.
“So the award is to one company, with specific conditions that they need to bring in black-owned companies to support (the auto industry’s) transformation agenda,” he said.
Naamsa received nine bids for the tender, from local and international service providers. In most countries with a NEV market the charging infrastructure was installed by their government.
Mabasa said South Africa’s automotive industry decided to invest in this infrastructure because the government has not yet finalised its policy about the country’s transition towards NEVs.
He said it is difficult to confirm the value of the tender award “at this time” because it still has to be finalised through negotiation with the successful bidder — but that it would be “several hundred million rand”.
Mabasa said the tender is for the first phase of a charging infrastructure project, which will involve the establishment of an additional 100 to 120 charging stations.
He said 305 charging stations had already been established on major routes countrywide by the end of 2022 and several more to date this year.
GridCars is the biggest owner, operator and supplier of NEV charging infrastructure in South Africa’s major cities and along major national road routes.
Earlier this month, Stanlib Asset Management, a leading South African investor in sustainable infrastructure, announced the acquisition of a controlling equity interest in Solareff, a leading SA-focused engineering, procurement and construction (EPC) platform.
Solareff is the controlling shareholder of GridCars, but since its establishment 13 years ago has grown into a leading distributed commercial and industrial solar and battery platform in South Africa, with over 500 successful projects to date and a total of over 190MW of installed capacity.
The acquisition, through Stanlib Infrastructure Fund II, is still subject to regulatory approvals.
Mabasa said the existing charging stations represent private investments by OEMs that already have NEV products in the domestic market to ensure their customers who buy these vehicles have access to charging infrastructure.
Increase in NEV sales
The tender follows a significant increase in NEV sales in percentage terms over the past few years, although the actual volumes as a percentage of total new vehicle sales remain low.
NEV sales increased by 421,7 percent to 4 674 units in 2022 from 896 units in 2021.
However, the 4 674 sales last year only accounted for 0,88 percent of total South African new vehicle sales of 529 562 units in 2022.
But NEV sales are growing, with sales in the first half of 2023 increasing by a further 47,1 percent to 3 146 units from the 2 139 units sold in the first six months of 2022. Sales in the first half of 2023 represented the sales of these types of vehicles by 18 industry brands.
Mabasa said there are three phases to the auto industry’s charging infrastructure rollout project, but stressed it would be demand-driven and the industry will only establish additional charging infrastructure when “the take-up of new energy vehicles is moving at a fast pace”.
He said the automotive industry will probably follow the example and business case of the telecommunications companies when they were rolling out the cellphone network in the country. — Moneyweb