South Africa has committed R1 billion to support local electric vehicle and battery manufacturing. This investment aims to attract R30 billion from private sectors and align with the country’s goal to transition to electric vehicle production by 2035. The initiative also involves a regional critical minerals strategy to meet manufacturing needs for sustainable technologies.
The South African government has allocated R1 billion to bolster the local manufacturing of electric vehicles (EVs), batteries, and associated projects, as announced by the national treasury. This initiative aims to support the nation’s status as the largest automotive manufacturing hub in sub-Saharan Africa, home to major automotive brands like Toyota, Ford, and Volkswagen.
In a bid to stimulate investment from original equipment manufacturers, the government plans to implement industry incentives and policies. The recently released Electric Vehicles White Paper delineates South Africa’s strategy to progressively shift its automotive production from traditional internal combustion engine vehicles to a diversified mix that includes EVs by the year 2035.
Furthermore, the national treasury disclosed intentions to collaborate with the department of mineral resources to establish a regional critical minerals strategy. While no specific timeline has been provided, the strategy will address the production of essential minerals such as copper, cobalt, and lithium crucial for manufacturing EV batteries and solar panels, supporting the global energy transition.
Over the medium term, the R1 billion will be dedicated to an industrial development support program. This incentive scheme is designed to enhance participation and investment in manufacturing sectors, particularly the automotive industry. The treasury remarked, “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.”
The initiative is anticipated to attract an impressive R30 billion in private sector investments, significantly boosting local production capabilities and market competitiveness within the electric vehicle sector.
In summary, South Africa’s commitment of R1 billion toward local electric vehicle production marks a significant milestone in shifting its automotive industry towards sustainability. The initiative aims to stimulate private investment while addressing the urgent need for critical minerals essential for manufacturing. As South Africa strives to transform its automotive landscape by 2035, these efforts will enhance local manufacturing, promote economic growth, and support the global transition to renewable energy sources.
Original Source: techcentral.co.za
