focus feature
• Green incentives tied to EV/hydrogen stainless content and recyclability
Hydrogen vehicles require high-performance stainless in tanks, fuel cell assemblies, and refuelling stations. In both cases, South Africa’s industry is technically capable of growing its output, if it can address processing capacity, precision forming skills, and raw material access. SAAM2035 outlines clear goals: 60% local content by 2035 (up from 39% today), green mobility investment, and deeper component manufacturing localisation. This aligns perfectly with increased stainless steel integration, particularly for exhaust replacements in EVs, battery shells, hydrogen tanks, and lightweight crash structures. Barriers to Scaling Stainless Steel Locally However, unlocking this growth is not automatic. Several barriers persist: • Technical: South Africa lacks advanced forming and joining facilities for stainless steel. High-spec fabrication (e.g. for EV battery cases) is mostly done abroad. • Skills: Stainless steel requires specialised knowledge in welding, shaping, finishing. These are not widely taught or supported in local training pipelines. • Economic: Limited volumes mean high per-unit costs. With global OEMs price-sensitive and cost-focused, imported parts often win on price alone. • Policy: Raw stainless exports are incentivised while finished imports come in tariff-free. This imbalance discourages local beneficiation. SAAM2035 support for stainless steel has been limited and implementation slow. Another concerning barrier is South Africa’s potential failure to meet rules of origin for export markets. If local content falls too low, due to steel shortages or policy gaps, vehicle exports may lose access to preferential trade zones. The Upside: Policy Levers and Localisation Wins The solution doesn’t require reinventing the wheel. South Africa already has a strong policy framework (SAAM2035), a capable stainless industry, and active industry bodies like Sassda. What’s needed is alignment and execution. Possible interventions include: • Incentives for local stainless processing in auto components (tax breaks, grants) • Skills development focused on stainless fabrication and finishing (Sassda invested over R500 000 in training in 2024) • Smart tariffs that protect local value chains without hurting affordability
These moves could make stainless not just an input, but a competitive advantage for the local automotive industry. Conclusion: Stainless Steel Can Drive a Reboot Stainless steel has always been more than a shiny surface, given that its core benefits are resistance, recyclability and longevity. In South Africa’s auto sector, it’s time that advantage was recognised, supported, and scaled. The stakes are high. Between global tariff tremors and the fast- moving shift to EV and hydrogen mobility, the industry can’t afford to stand still. Stainless steel may be one of the best levers South Africa has to both adapt and lead, if the pieces come together fast enough.
Learn more https://www.thedtic.gov.za/wp-content/ uploads/Masterplan-Automotive_Industry.pdf
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Issue 3 – 2025
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