South Africa will allocate R1 billion to bolster local production of new energy vehicles, batteries, and related manufacturing initiatives, National Treasury announced Wednesday.
Read: Microsoft gears up for Xbox handheld, reportedly built by PC partner
As the leading automotive manufacturing hub in sub-Saharan Africa, hosting major brands like Toyota, Ford, and Mercedes, the country aims to accelerate its transition to electric vehicle (EV) production.
Industry stakeholders have emphasized the need for government incentives and policy interventions to encourage original equipment manufacturers (OEMs) to invest in EV production within South Africa.
Building upon the 2023 Electric Vehicles White Paper, which outlined a strategy to transition the automotive industry to a mix of internal combustion engine and electric vehicles by 2035, the government is taking concrete steps.
Treasury revealed plans for the Department of Trade & Industry, in collaboration with the Department of Mineral Resources, to approve and implement a regional critical minerals strategy, vital for EV battery and solar panel production.
The R1 billion allocation, earmarked for the Industrial Development Support Programme, will incentivize increased participation and investment in infrastructure by firms within selected 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,” Treasury stated.
This incentive is projected to attract R30 billion in private sector investment.
