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In a strategic effort to strengthen its role in the global transition to cleaner transportation, South Africa has announced an investment of around USD 54.27 million aimed at enhancing the domestic production of electric vehicles (EVs), batteries, and associated industrial infrastructure, as stated by the National Treasury.
This funding is a crucial part of the country’s broader goals outlined in the 2023 Electric Vehicles White Paper, which sets a roadmap for a greener, more competitive automotive industry. The White Paper aims for a significant shift in production and consumption models, targeting at least 1% of global EV output by 2035 and increasing the share of locally sourced components in EV manufacturing from the current 40% to 60%.
Government officials and industry leaders consider this financial boost essential for fostering domestic investment, encouraging technological innovation, and establishing a sustainable local supply chain for new energy vehicles. This initiative is anticipated to enhance investor confidence and draw substantial private capital into the EV manufacturing sector, potentially mobilising up to $1.63 billion in private sector investment.
Additionally, the National Treasury plans to introduce a Regional Critical Minerals Strategy focused on the development and responsible use of key raw materials needed for electric vehicle batteries and solar panels. South Africa possesses abundant reserves of vital minerals such as lithium, cobalt, and manganese, and this strategy aims to optimize their value through local processing and manufacturing rather than exporting raw materials.
The funds will also support broader infrastructure investments throughout the automotive ecosystem, including the establishment of new assembly lines, upgrading existing manufacturing facilities, and improving supply chain logistics. These initiatives aim not only to enhance domestic production capabilities but also to position South Africa as a competitive player in the global clean energy transition.
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As the global automotive industry shifts towards electric mobility, South Africa’s government faces pressure to modernise its long-standing car manufacturing sector to meet climate goals and embrace technological advancements. While the country has been a key exporter of traditional internal combustion engine vehicles, stakeholders agree that future growth hinges on a sustainable transition to electrification. By investing in EV manufacturing and mineral development at this level, South Africa is signalling its intention to lead the clean mobility transformation in Africa, building a foundation for future industrial growth that is environmentally sound and globally competitive.