South Africa will invest R1 billion to support local electric vehicle (EV) production and related manufacturing, as part of a strategy to transition to electric vehicles by 2035. This initiative is expected to encourage private investments and enhance the country’s automotive industry, which is already the largest in sub-Saharan Africa.
South Africa is set to allocate R1 billion to bolster the local production of electric vehicles (EVs), batteries, and related manufacturing projects, as announced by the national treasury. This initiative aims to enhance the automotive sector, which is the largest manufacturing hub in sub-Saharan Africa, home to major brands such as Toyota, Ford, and Mercedes.
The automotive industry has advocated for governmental incentives and policy measures to motivate original equipment manufacturers to invest in EV production within the country. A strategic Electric Vehicles White Paper released in 2023 outlines South Africa’s intention to diversify from predominantly internal combustion engine vehicles to a more electric vehicle-inclusive model by 2035.
As part of its annual budget review, the treasury indicated that the departments of trade and industry, alongside mineral resources, plan to implement a regional critical minerals strategy vital for the production of EV batteries and solar panels. The timeline for this strategy has not yet been disclosed.
The R1 billion earmarked for the industrial development support program is designed to amplify participation and investment in infrastructure within selected manufacturing sectors, particularly automotive. The treasury emphasized that this incentive will boost the local assembly of new-energy vehicles and improve operational efficiency.
The initiative is anticipated to attract up to R30 billion in private sector investment, which demonstrates a strong commitment to enhancing the manufacturing landscape for EVs and innovative projects in South Africa.
In summary, South Africa’s R1 billion investment to support local EV production marks a significant step towards fostering a robust electric vehicle industry. By incentivizing the assembly of new-energy vehicles and leveraging critical minerals, the country aims to align its automotive sector with global energy transition trends. This initiative is projected to attract substantial private investment, reinforcing South Africa’s position as a leading automotive hub in Africa.
Original Source: techcentral.co.za
