South Africa’s economy at a pivotal point as outlook improves but political, energy risks remain
LONDON – South Africa’s President Cyril Ramaphosa speaks during a press conference in central London on November 24, 2022
JUSTIN TALLIS/AFP via Getty Images
South Africa’s long-awaited economic reforms have begun to improve the country’s outlook, but the age-old problems of political uncertainty and a failing power system still pose significant risks.
The Economic Reconstruction and Recovery Plan has been a key tenet of President Cyril Ramaphosa’s agenda since he succeeded Jacob Zuma as the country’s leader in 2018. But deep divisions within the ruling African National Congress (ANC) and his own cabinet have made for sluggish progress.
The suite of reforms — focused on energy security, infrastructure development, food security, job creation and the green transition — is designed to create a “sustainable, resilient and inclusive economy,” the government says.
And — some at least — appear to be working. S&P Global Ratings earlier this month affirmed its positive outlook on the country, saying that government measures to stimulate private sector activity could boost growth, and the measures had the potential to ease economic pressures.
“There is some hope in the public finances in South Africa, mainly due to the increase in government revenues as a result of higher commodity exports, and also due to the progress made in reducing debt and debt distress, and to ushering a public deficit,” Aleix Montana, Africa analyst at risk consultancy Verisk Maplecroft, told CNBC last week.
However, political frailties and persistent issues at a state-owned utility continue to pose present economic risks.
Ramaphosa faces a “perfect storm of inflation, electricity cuts and corruption accusations that will continue to deteriorate South Africa’s profile and to pose risk for investments in the country,” Montana said.
A report into an alleged corruption scandal surrounding Ramaphosa is set to be examined by the National Assembly on Dec. 6, just 10 days before the party conference of his ruling ANC (African National Congress).
Energy woes
Though Ramaphosa is expected to secure a second five-year term, Montana said he will have to improve his credibility on economic and anti-corruption reforms in order to continue pushing through his agenda. The economy also remains at risk from persistent disruptions at state-owned companies, such as power utility Eskom.
South Africans have faced rolling blackouts as Eskom — which has long been a thorn in the side of the country’s economy — contends with shortfalls in generation capacity due to equipment failures and diesel shortages.
The company has warned that power outages, known as “load-shedding,” will continue for the next six to 12 months, and recently said it had run out of funds to acquire the diesel needed to run auxiliary power plants that are deployed during periods of peak consumption or emergencies.
Montana said that in order to secure sustained economic growth, the South African government will need to prioritize energy sustainability.
“Energy will require financial assistance from international players, but they will also need to ensure that it doesn’t have a negative impact on South African society,” he said.
“Apart from financial challenges, a lot of citizens of South Africa are employed in Eskom or in the fossil fuels sector, so the government will need to ensure that in their plan, they mitigate this potential impact of transitioning from a fossil fuels-based economy to the implementation of renewables in order to sustain electricity stability.”
Asked about this issue on a recent state visit to the U.K., Ramaphosa told CNBC’s Arabile Gumede that the problems at Eskom started long before 2014, when former President Jacob Zuma appointed him to address the country’s energy problems.
“As we are generating electricity, power stations keep breaking — many of them are old — but we are trying with a new boat, the management that’s in place to address this problem,” Ramaphosa said.
“So the problems of Eskom were seeds that were planted many years ago, rather than in 2014, and because we’re dealing with huge, complicated and complex machinery, it’s not a one-day fix, it can never be as these are very complex processes.”
He added that the government was working to reduce load-shedding requirements and to “ensure that the money’s there,” noting that Eskom “used to be the best utility in the world.”
“Do I have confidence that we will solve these problems? Yes, I do. I do have enormous confidence that we will solve them,” he said.
“But I think it’s important to have an appreciation of where we’ve come from, and obviously, it is very easy to put all the blame on the president, to put all the blame on the government, and yet these problems have come way back from the past.”
‘Taming the monster’ of inflation
Along with the domestic issues unique to South Africa, the country also faces the same inflationary pressures that have plagued economies around the world over the past year.
Annual headline inflation rose to 7.6% in October, defying the South African Reserve Bank’s expectations for price pressures to ease. This prompted the bank’s Monetary Policy Committee to hike interest rates by an aggressive 75 basis points last week, taking the benchmark repo rate to 7%.
This marked the seventh consecutive meeting at which monetary policy had been tightened, and central bank Governor Lesetja Kganyago said in a press conference that it must “tame the monster of inflation.”
With prices rising much faster than the central bank’s 3-6% target, Kganyago noted that the SARB needs to see clear evidence that inflation has not just peaked, but begun to sustainably decline toward the midpoint of the range.
But further monetary tightening will place additional pressure on the economy.
“We think that inflation is unlikely to return within the target range (let alone the midpoint) in the coming months, keeping policymakers in tightening mode well into 2023,” said Virág Fórizs, emerging markets economist at Capital Economics.
She flagged that food inflation continues to increase, offsetting some of the effects of softening fuel price pressures, while core inflation is likely to remain high. Capital Economics expects inflation to hover around 7.5% annually until early 2023, before dropping markedly around the middle of the year.
Fórizs said the weakness of the economy is unlikely to prevent further rate hikes, with growth concerns playing second fiddle to inflation worries. South African GDP contracted by 0.7% in the second quarter.
“While the end of the tightening cycle is not yet in sight, we expect the pace of tightening to slow over the next MPC meetings,” she noted.
Three MPC members voted to hike rates by 75 basis points last week, while two voted for 50 basis points. It marked an apparent softening of approach by some who voted for a 100-basis-point rise at the previous meeting.
“All in all, we’ve penciled in 100bp of further increases in the repo rate, to 8.00%, by Q2 2023,” Fórizs said.
Global EV charging is about to see a massive buildout. According to Wood Mackenzie’s recent Electric Vehicle Charging Infrastructure Forecast, the number of global EV charging ports is expected to climb at a 12.3% compound annual growth rate between 2026 and 2040, hitting 206.6 million by the end of that period.
Home charging leads the way
Residential charging will continue to be the backbone of the market, with 133 million ports installed globally by 2040. To support that growth, annual spending on EV charging infrastructure will rise steadily at 8% a year, reaching $300 billion by 2040.
“Residential Level 2 charging dominates the global market and will make up about 2 out of every 3 charging ports worldwide through 2050,” said Emil Koenig, senior research analyst at Wood Mackenzie. “Its appeal comes from the balance of convenience, performance, and value that resonates most strongly with EV owners.”
Public charging will also expand, but at a more measured pace compared to home setups. “As utilization in public charging increases and infrastructure efficiency improves, we expect the ratio of EVs to public chargers to rise from 7.5 battery electric vehicles per charger in 2025 to 14.2 in 2040,” said Oliver McHugh, Wood Mackenzie’s senior EV charging research analyst.
Asia-Pacific dominates, with India rising fast
China continues to lead the global pack in public charging infrastructure, and Asia-Pacific overall is forecast to see around 10% annual growth in DC fast charging from 2025 through 2040. By then, public Level 3 and residential Level 2 charging will represent the largest annual capital spending in the region, at $54 billion and $33 billion, respectively.
India is emerging as a fast-growing market. The country’s DC fast charger network is projected to skyrocket from just 14,000 today to 1.1 million by 2040, thanks to strong government policies and rapid EV adoption.
The Americas keep pace
Despite challenges, the US public fast-charging market is expected to grow at a healthy 14% annual clip, reaching 475,000 ports by 2040 and generating $3.3 billion in annual market value. South America will also ramp up quickly – residential charging in the region is projected to grow at 22% annually as EV adoption accelerates. Residential Level 2 charging will dominate, with $11.2 billion in spending by 2040.
Europe and the Middle East surge
Europe’s public charging infrastructure is on track for 11.3% annual growth through 2040, with DC fast chargers expanding even faster at 13.7%. Residential charging will hit 57 million AC chargers, while commercial charging grows at 12% annually.
Meanwhile, Saudi Arabia is positioning itself as a standout player in the Middle East. The kingdom’s public DC charging segment is forecast to soar at 29% annual growth, supported by aggressive government targets. By 2040, the entire EMEA region will be spending $14 billion each year on public charging and $30 billion on residential charging.
Read more: The US added 4,200 new DC fast charging ports, and that’s just Q2
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Tesla insiders have been unloading their shares at an impressive rate. Excluding CEO Elon Musk, Tesla executives and board members have sold more than 50% of their TSLA shares over the last year.
And that might only be part of the story.
Public companies are required to report insider trading by key executives and board members.
In recent years, Tesla’s number of key executives has dwindled to now only three:
- Elon Musk
- Tom Zhu
- Vaibhav Taneja
Here’s Tesla’s corporate governance page on its investor relations website:
That’s partly due to several of them leaving in the last year, including Drew Baglino, who was the de facto head of engineering and was listed as a key executive before leaving last year.
It’s also because Musk is known to micro-manage, resulting in him having many direct reports who would generally go through other department heads.
The result is that only two Tesla executives, in addition to Musk, who would have to report his transactions even if he weren’t CEO, since he owns more than 10% of the company, are required to report their stock transactions.
Based on Tesla’s 2024 proxy statement, here were the insider ownership last year:
| TSLA Insider Ownership | Total | Shares | Options |
|---|---|---|---|
| Elon Musk | 715,022,706 | 303,960,630 | 411,062,076 |
| Vaibhav Taneja | 1,063,544 | 105,032 | 958,512 |
| Andrew Baglino | 1,218,669 | 31,230 | 1,187,439 |
| Tom Zhu | 1,996,983 | 63,171 | 1,933,812 |
| Robyn Denholm | 1,490,069 | 15,000 | 1,475,069 |
| Ira Ehrenpreis | 1,681,005 | 1,571,005 | 110,000 |
| Joe Gebbia | 111 | 111 | 0 |
| James Murdoch | 1,427,295 | 157,275 | 1,270,020 |
| Kimbal Musk | 1,950,470 | 1,608,720 | 341,750 |
| Kathleen Wilson‑Thompson | 771,255 | 5,400 | 765,855 |
| TOTAL | 726,622,107 | 307,517,574 | 419,104,533 |
| TOTAL Excl. Elon Musk | 11,599,401 | 3,556,944 | 8,042,457 |
Now here’s the ownership of Tesla shares and options from insiders based on the 2025 proxy statement:
| Name | Total | Shares | Options | As‑of (filing) |
|---|---|---|---|---|
| Elon Musk | 714,754,706 | 410,794,076 | 303,960,630 | 12/31/2024 (10‑K/A filed 4/30/2025) |
| Vaibhav Taneja | 830,844 | 116,924 | 713,920 | 7/8/2025 |
| Andrew Baglino | 520,005 | 31,230 | 488,775 | 4/1/2024 (latest) |
| Tom Zhu | 348,250 | 67,600 | 280,650 | 6/12/2025 |
| Robyn Denholm | 85,000 | 85,000 | 0 | 5/6/2025 |
| Ira Ehrenpreis | 855,394 | 855,394 | 0 | 5/27/2025 |
| Joe Gebbia | 4,111 | 4,111 | 0 | 4/24/2025 |
| James Murdoch | 1,282,519 | 884,306 | 398,213 | 3/10/2025 |
| Kimbal Musk | 1,463,220 | 1,463,220 | 0 | 5/27/2025 |
| Kathleen Wilson‑Thompson | 5,400 | 5,400 | 0 | 5/1/2025 (options canceled) |
| TOTAL (sum of listed rows) | 720,149,449 | 414,307,261 | 305,842,188 | |
| TOTAL excl. Elon Musk | 5,394,743 | 3,513,185 | 1,881,558 |
As you can see, excluding Musk, Tesla insiders sold more than half their shares in the company over the last year.
To be fair, some of those changes also include cancellations of stock options for board members, who settled a shareholders’ lawsuit for having overcompensated themselves.
However, it doesn’t account for the reduction in ownership of more than 6 million shares and stock options, worth approximately $2 billion at today’s share price.
There are also some specific examples of non-board members liquidating their stakes.
Tom Zhu, who has led Tesla’s manufacturing efforts and was at times seen as Musk’s number 2 at Tesla, reduced his stake by 82% in a single year.
This happened while Musk claimed that Tesla will become the most valuable company in the world and roughly 10x its current stock price due to autonomous driving and robots, a claim most unbiased analysts have been highly skeptical about.
Electrek’s Take
More than 50% reduction in ownership in a single year is wild.
But as I hinted at the beginning of the article, this is only what we can see. Other Tesla execs, managers, and employees also have shares and stock options, and they could potentially be selling at an even higher rate. We simply don’t know.
The single reporting person to have bought shares is Joe Gebbia, who only bought about $1 million worth, and he is a multi-billionaire. It would be the equivalent of me buying a few hundred dollars’ worth of Electrek shares – not a great show of confidence in my company.
I’m not in the business of predicting Tesla’s share price. I think it trades mainly on gullible Tesla retail shareholders believing Musk’s lies.
But I believe that Tesla will likely face several challenging quarters in the next few years and may even start incurring losses. I think many executives also see this coming and don’t believe that autonomy and humanoid robots will have a positive financial contribution for a few years, as Musk claims.
Meanwhile, Tesla’s EV business is struggling, and there’s little hope of reversing the trend without fresh new models and innovation – the pace of which appears to have greatly slowed at Tesla, unfortunately.
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BMW is tired of missing out, as the Mercedes G-Wagon gets all the attention. That’s why it’s building its own luxury off-roader. BMW’s upcoming flagship SUV may even arrive as an EV.
Will BMW’s off-road luxury SUV launch as an EV?
The new full-size SUV, codenamed G74, will go head-to-head with the Mercedes G-Class and other luxury off-roaders like the Land Rover Defender.
Multiple reports claim it will be built in the US at BMW’s Spartanburg, SC plant, alongside the X5, X6, and X7. A senior BMW official confirmed the rumors, telling Autocar that work on the upcoming flagship SUV is well underway.
“We’re aware of the market potential,” the company official said, adding, “It’s more than just discussions. We have been planning this for a while.”
Although BMW is keeping most details secret for now, we do know it will be gas-powered. The company official explained that the new SUV “will definitely need an internal combustion engine.”
It’s expected to ride on a modified version of its CLAR platform, which underpins the X5. The chassis will pull elements from its larger SUVs, like the X7, including air suspension, advanced four-wheel drive, and much more, to enhance on and off-road road performance.
It’s set for production in the US from 2029. Will BMW also offer an electric version? Don’t rule one out just yet. BMW officials are considering an electric version that would compete with the growing list of luxury off-road EVs coming from China, including BYD’s Yangwang U8 and the GWM Tank 700.
With several other luxury electric SUVs hitting the market, including the Rivian R1S and upcoming Volkswagen Scout Traveler, BMW may look to defend sales in the US, its second-largest market behind China.
Inside, the new flagship model will feature better quality materials and equipment than the current range-topping vehicles, the BMW official told Autocar.
BMW’s new off-road SUV will likely pull most other elements from its upcoming Neue Klasse models, so why not launch an EV variant?
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