South Africa Allocates R1 Billion for Local Electric Vehicle Production
South Africa will invest R1 billion to support local EV and battery production, enhancing its automotive manufacturing capabilities. This initiative, outlined in the 2023 Electric Vehicles White Paper, aims to transition the industry by 2035, encouraging private investment and addressing the need for critical minerals essential for EV technology.
South Africa is committing R1 billion to enhance the domestic production of electric vehicles (EVs) and batteries, along with other related manufacturing initiatives, according to the national treasury. This investment aims to bolster South Africa’s status as the primary automotive manufacturing center in sub-Saharan Africa, hosting major brands such as Toyota, Ford, Isuzu, Volkswagen, and Mercedes.
The government anticipates that financial incentives and policy measures will motivate original equipment manufacturers to increase their investments in the EV sector. In 2023, South Africa introduced its Electric Vehicles White Paper, articulating a strategic vision to transition from predominantly producing internal combustion engine vehicles to incorporating electric vehicles into the automotive mix by the year 2035.
In its annual budget review, the treasury mentioned a collaborative effort between the Department of Trade & Industry and the Department of Mineral Resources to formulate a regional critical minerals strategy, although no specific timeline was provided. Essential minerals like copper, cobalt, and lithium are vital for producing electric vehicle batteries and solar panels, forming a critical part of the global shift toward clean energy.
The treasury confirmed that the R1 billion allocated would support an industrial development program aimed at boosting investment and participation in infrastructure by firms engaged in strategic manufacturing sectors, including automotive. “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 emphasized.
This initiative is projected to generate R30 billion in private sector investment, thereby substantially impacting the local economy and promoting sustainable industrial growth in the EV market.
In conclusion, South Africa’s R1 billion investment signifies a pivotal step towards advancing domestic electric vehicle production and fostering related industries. This initiative is expected to attract substantial private sector investment and aligns with the country’s broader strategy to transition to a mixed automotive approach by 2035, reflecting South Africa’s commitment to sustainable development and the global energy transition.
Original Source: techcentral.co.za
