South Africa Allocates R1 Billion to Boost Local Electric Vehicle Production

South Africa will invest R1 billion to support local EV and battery production, aiming to transition its automotive industry by 2035. This initiative will encourage manufacturers to invest more in electric vehicles, aided by a critical minerals strategy essential for battery production.

South Africa has announced a significant initiative to bolster local production of electric vehicles (EVs) and batteries by allocating R1 billion for related manufacturing projects. This decision, revealed by the national treasury, aims to enhance the country’s position as the leading automotive manufacturing hub in sub-Saharan Africa, home to major brands like Toyota, Ford, and Volkswagen.

The South African government believes that incentives and policy measures will stimulate original equipment manufacturers to increase their investments in electric vehicle production domestically. The recently released Electric Vehicles White Paper outlines a strategic shift to transition from traditional internal combustion engine vehicles to a diverse mix that prioritizes electric vehicles by the year 2035.

Furthermore, the treasury detailed plans in its annual budget review for collaboration between the departments of trade and industry, and mineral resources to implement a critical minerals strategy vital for this transition. Critical minerals such as copper, cobalt, and lithium are essential for manufacturing EV batteries and are crucial for advancing the global energy transition.

The industrial development support programme will utilize the R1 billion earmarked over the medium term to incentivize investment in infrastructure among select manufacturing sectors, including automotive. This initiative aims to boost local assembly and production of new-energy vehicles and increase operational efficiency in manufacturing projects. It is projected that this incentive will attract approximately R30 billion in private sector investments.

In conclusion, South Africa’s commitment to investing R1 billion in the local production of electric vehicles and batteries signifies a strategic move toward transitioning its automotive industry to a more sustainable future. By providing incentives and developing a critical minerals strategy, the government anticipates attracting substantial investments to support this transformative initiative.

Original Source: techcentral.co.za