South Africa is set to invest 1 billion rand ($54.27 million) to support the local production of electric vehicles (EVs), batteries, and related manufacturing, the National Treasury announced on Wednesday.
As sub-Saharan Africa’s leading automotive manufacturing hub, South Africa is home to major global brands like Toyota, Ford, Isuzu, Volkswagen, and Mercedes. Industry leaders have emphasized that government incentives and policy interventions will be crucial in attracting more investment from original equipment manufacturers (OEMs) for EV production.
The country’s Electric Vehicles White Paper, released in 2023, outlines a transition strategy aiming to shift the automotive sector from primarily producing internal combustion engine vehicles to a more diverse mix, including EVs, by 2035.
In its annual budget review, the treasury stated that the Department of Trade and Industry, in collaboration with the Department of Mineral Resources, is working on a regional critical minerals strategy. While no timeline was provided, the strategy will focus on securing essential resources like copper, cobalt, and lithium—key components in EV batteries and renewable energy technologies.
The 1 billion rand allocation falls under the industrial development support program, an initiative designed to boost investment and infrastructure development in select manufacturing sectors, particularly automotive.
“This incentive aims to strengthen local production and assembly of new-energy vehicles, batteries, and efficiency-driven manufacturing projects,” the treasury stated.
The program is expected to generate 30 billion rand in private sector investment, further cementing South Africa’s position in the global EV supply chain.
