South Africa’s R1 Billion Initiative to Boost Local Electric Vehicle Production
South Africa plans to invest R1 billion to promote local electric vehicle production and related manufacturing, aiming for a diversified automotive sector by 2035. The initiative expects to attract R30 billion in private investment and aligns with global energy transition needs.
South Africa will invest R1 billion to foster the local production of electric vehicles (EVs) and related technologies, as stated by the national treasury. The country is the largest manufacturing hub for automobiles in sub-Saharan Africa, featuring brands such as Toyota, Ford, and Volkswagen. Government incentives are expected to motivate original equipment manufacturers (OEMs) to enhance EV production domestically.
In 2023, South Africa released its Electric Vehicles White Paper, detailing a strategic shift toward a diversified automotive industry that includes EVs by 2035. The national treasury’s budget review highlighted a collaboration between the departments of trade, industry, and mineral resources aimed at implementing a regional critical minerals strategy, although specific timelines remain unspecified.
Critical minerals like copper, cobalt, and lithium are crucial for producing electric vehicle batteries and solar panels and play an essential role in the global energy transition. The national treasury allocated R1 billion over the medium term for an industrial development support program. This incentive scheme targets increased infrastructure investment and participation in selected manufacturing sectors, primarily automotive.
Additionally, the incentive is designed to boost local production and assembly of new-energy vehicles and batteries while enhancing operational efficiency in new manufacturing projects. The treasury anticipates that this initiative will attract approximately R30 billion in private sector investment.
South Africa’s strategic investment in electric vehicle production is a significant step towards transitioning its automotive sector. The R1 billion allocation aims to stimulate local manufacturing of EVs and batteries, aligning with global energy trends. Through the combined efforts of various governmental departments, the country seeks to elevate participation in critical mineral sourcing and attract substantial private investments, thus fostering growth in the new-energy vehicle market.
Original Source: techcentral.co.za
