The National Treasury announced on Wednesday that South Africa will invest 1 billion rand ($54.27 million) to promote domestic manufacturing of new energy vehicles and batteries, along with associated industrial initiatives.
With companies including Toyota, Ford, Isuzu, Volkswagen, and Mercedes among others, the nation is the biggest centre for automobile manufacturing in sub-Saharan Africa.
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According to the industry, original equipment manufacturers will be encouraged to increase their investments in the nation’s electric vehicle production through government incentives and regulatory initiatives.
1 billion rand EV’s production incentive to attract 30 billion rand private sector investment
It further stated that the incentive is anticipated to draw in 30 billion rand in private sector investment.
In 2023, South Africa published the Electric Vehicles White Paper, which outlined the nation’s plan to shift the automotive sector from mostly manufacturing cars with internal combustion engines to a mix that includes electric vehicles by 2035.
Without providing a date, the Treasury stated in its annual budget review that the Department of Trade and Industry, in collaboration with the Department of Mineral Resources, intended to develop and execute a regional critical minerals strategy.
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Crucial minerals like copper, cobalt, and lithium are essential to the global energy revolution and are required for the manufacturing of goods like solar panels and batteries for electric vehicles.
According to the Treasury, 1 billion rand would be allocated over the medium term for the Industrial Development Support Program, an incentive scheme designed to encourage businesses in specific manufacturing sectors, such the automotive industry, to invest in infrastructure.
“The purpose of the incentive is to enhance the local production and assembly of new-energy vehicles, batteries and projects focused on operational efficiency and competitiveness in new manufacturing projects,” the Treasury added.