South Africa is investing R1 billion to promote local production of electric vehicles and batteries. The initiative aims to attract investments and transition the automotive industry towards a mix of electric and internal combustion engine vehicles by 2035. This plan includes implementing a strategy for critical minerals necessary for battery production and is expected to generate R30 billion in private sector investment.
The South African government will allocate R1 billion to promote local production of new energy vehicles (NEVs) and batteries, as articulated by the national treasury. This initiative seeks to bolster the nation’s status as the largest automotive manufacturing hub in sub-Saharan Africa, home to prominent brands including Toyota, Ford, and Volkswagen.
The automotive industry has expressed optimism that government incentives and policy adjustments will drive original equipment manufacturers to invest more in electric vehicle production domestically. In tandem with this, South Africa unveiled its Electric Vehicles White Paper in 2023, which delineates a strategy to shift from primarily producing internal combustion vehicles to a diversified mix that incorporates electric vehicles by 2035.
The treasury’s annual budget review indicates that the Department of Trade and Industry, alongside the Department of Mineral Resources, will formulate and execute a regional critical minerals strategy, although no specific timeline has been provided. These critical minerals, such as copper, cobalt, and lithium, are essential for the manufacturing of electric vehicle batteries and solar panels, thereby facilitating a global energy transition.
The expected R1 billion will be allocated over the medium term for an industrial development support program aimed at enhancing investment and participation in infrastructure projects within selected manufacturing sectors like automotive. According to treasury, the purpose of this incentive scheme is to boost local production and assembly of NEVs and related projects to improve operational efficiency and global competitiveness.
Furthermore, the initiative is anticipated to attract R30 billion in private sector investments, contributing significantly to the growth of new energy vehicle manufacturing in South Africa. Such developments are expected to play a critical role in the transition towards cleaner energy alternatives in the nation’s automotive industry.
In conclusion, South Africa’s commitment of R1 billion to support local production of new energy vehicles and batteries signifies a substantial step towards enhancing the automotive sector. The government’s strategic policies and incentives are designed to attract investments and facilitate the production of electric vehicles, ultimately aiming for a energy-efficient future by 2035. This initiative not only aims to boost the local economy but also aligns with global energy transition goals.
Original Source: techcentral.co.za
