Focus Feature

Globally, stainless steel is embedded in nearly every vehicle platform, traditional or electric. It appears in exhaust systems (grades 409, 439, 304), fasteners, trims, crash structures, and underbody shields. It’s also found in fuel lines, especially for ethanol-blended fuels, where corrosion is a major concern.

In electric vehicles (EVs), stainless steel is used for battery enclosures (301L, 304L), thermal management tubing, and lightweight structural parts. In hydrogen vehicles, it’s critical for high-pressure tanks, fuel cells, and distribution infrastructure.

This wide material versatility is matched by another unique trait: stainless steel is 100% recyclable, with a 96% recovery rate. It supports circularity, reduces raw material demand, and aligns with automakers’ long-term sustainability goals.

South Africa’s Stainless Steel Footprint in the Auto Sector

South Africa has a mature automotive industry, contributing about 5% of GDP. Stainless steel has long been a quiet contributor; feeding into local vehicle assembly, component exports, and a growing aftermarket supply network. From exhausts to trims, fasteners to fuel system parts, domestic
steel processors and component fabricators have historically met OEM needs with strong government support.

But recent years have seen that value chain fray. The closure of ArcelorMittal’s Newcastle works has disrupted local production of specialty long steel grades, pushing manufacturers to import key inputs at higher cost. Some OEMs report cost hikes of up to 25% for stainless components. Local economies of scale are limited, and many component manufacturers face downward price pressure from global supply chains.

Despite these headwinds, stainless steel remains a pillar of opportunity under the SAAM2035 framework especially as EV and hydrogen vehicle assembly gains traction.

The Tariff Disruption

South Africa’s automotive sector is now under fresh pressure from outside: escalating U.S. tariffs on vehicles and auto parts. In early 2025, the U.S. imposed a 25% tariff on all South African automotive imports. That jumped to 30% in August. The result has been immediate and brutal. Vehicle exports to the U.S., one of SA’s biggest markets has plunged by over 80% in April and May 2025.

Industry analysts warn that up to 100 000 jobs could be lost if the tariffs persist, many of them in auto component manufacturing, logistics, and related sectors. The rand has  weakened, and investor confidence has wobbled, as key negotiations remain unresolved. With U.S. access shrinking, the industry is scrambling to redirect output to Europe, the Middle East, and intra- African trade partners under AfCFTA but that takes time, investment, and compliance with multiple rules of origin standards.

What is SAAM2035

The South African Automotive Masterplan 2021–2035 (SAAM2035) is the government’s long-term strategy to grow and transform the automotive industry. It targets a major shift toward higher local value-add—aiming for 60% local content in vehicles, expanded production volumes, doubled sector employment, and stronger global exports. A key focus is building a more inclusive supply chain by supporting Black-owned businesses and deepening local manufacturing capabilities.

Stainless in EVs and Hydrogen Vehicles: The Next Wave

The rise of electric and hydrogen vehicles is reshaping material demand in real time. Stainless steel’s role is expanding and is now playing into battery fire safety, hydrogen containment, crash durability, and fast-charging infrastructure.

EVs increasingly rely on stainless battery enclosures, cooling system piping, and lightweight structures.

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
• Green incentives tied to EV/hydrogen stainless content and recyclability

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 fastmoving 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