German carmaker BMW is investing R4.2bn in its SA subsidiary to make electric cars.
From the second half of 2024, BMW Group SA, which celebrates its 50th birthday in 2023, will add plug-in hybrid versions of the X3 sports utility vehicle to its existing petrol and diesel versions.
“From 2024, we will produce the BMW X3 in SA as a plug-in hybrid and export it to the world,” BMW SA chair Milan Nedeljkovic said on Wednesday.
The company’s Rosslyn assembly plant in Tshwane will be the only one in the BMW world to make a hybrid version of the next-generation X3. Rosslyn has built the current X3 since 2018.
So far it has made more than 300,000, mostly for export. In total, since 1973, it has produced nearly 1.6-million vehicles, most of them 3-Series cars. Most current X3s are exported to countries that will ban the sale of vehicles powered by traditional internal combustion engines (ICE) in the next few years.
BMW SA CEO Peter van Binsbergen is one of many industry leaders to have criticised the government for its failure to encourage the local manufacture and sale of electric cars. A White Paper policy document should have been published in 2021 but trade, industry & competition minister Ebrahim Patel said a few weeks ago it would now be ready only in 2024.
Though production incentives offered by current government policy, in the shape of the Automotive Production and Development Programme (APDP), do not distinguish between electric vehicle (EV) and ICE technologies, the industry says EVs need more support. Specifically, they say policy must offer customers price incentives to switch to EVs. The state says it cannot afford them. Of new SA cars sold in 2022, barely 1% were EVs. Internationally, the figure was more than 10%.
Multinational vehicle manufacturers with SA subsidiaries say they need clear policy direction to justify investing in EV manufacture here. So far, only two of the seven major companies have done so. Mercedes-Benz SA builds some plug-in hybrid-electric C-Class cars, exclusively for export. For the local market, Toyota SA assembles traditional hybrid versions of the Corolla Cross.
Both forms of hybrid vehicle carry dual motors, one ICE and the other electric. In a traditional hybrid, the ICE continuously recharges the electric motor, so no extra assistance is required. Plug-in hybrids allow drivers to switch between the two motors. The electric one requires plug-in charging, either at home or at public charging stations.
No-one in SA yet makes a battery-electric vehicle (BEV), which has no ICE motor and relies exclusively on plug-in electric power. This is considered the ultimate goal for EVs, with hybrid as a stepping stone.
BMW has decided it can wait no longer for the state to make up its mind on EVs. The new X3 will be built at Rosslyn beyond 2030, when the UK, among others, has said ICE vehicles can no longer be sold. Nedeljkovic, also the global group’s board member responsible for production, said the R4.2bn would be spent over five years.
Load-shedding
BMW Germany said the decision “secures the future of BMW Group Plant Rosslyn, as well as the livelihoods of more than 20,000 people directly and indirectly employed at BMW Group SA’s facilities and within its supply chain”.
Rosslyn has annual capacity to build 76,000 vehicles. Van Binsbergen said load-shedding remained an obstacle to smooth production but that the company was heartened by recent discussions with electricity minister Kgosientsho Ramokgopa. He added that BMW SA was used to challenges: “The last 50 years have not been plain sailing.”
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