South Africa Expands Automotive Incentives to Include EV Battery Minerals to Boost Local Production
South Africa is planning to expand its automotive incentive programme to include critical minerals used in the production of electric vehicle (EV) batteries, in a bid to strengthen local manufacturing and support the development of regional supply chains.
The proposed policy shift forms part of a broader review of the country’s automotive strategy, aimed at responding to the global transition toward electric and hybrid vehicles, stricter emissions regulations, and increasing competition from low-cost imports, particularly from China and India.
At present, the incentive framework covers so-called “standard materials” such as aluminium, steel, and platinum group metals. However, it does not yet include key minerals essential for EV battery production.
According to a government notice issued by the International Trade Administration Commission (ITAC), the list of eligible inputs is set to be expanded to include materials such as lithium, graphite, cobalt, copper, iron, and rare earth elements.
To qualify under the revised programme, these materials must be sourced from within the Southern African Customs Union (SACU) or the broader Southern African Development Community (SADC).
Under the proposed rules, 50% of their value would be recognised as locally added value, enabling manufacturers to access production incentives.
The changes are intended to align the automotive incentive framework with South Africa’s Automotive Master Plan 2035, which targets annual vehicle production of approximately 1.4 million units, increased local content, and stronger integration into global electric mobility supply chains.
South Africa’s automotive support programme currently includes customs duty rebates, production-linked incentives, investment support mechanisms, and a volume-based allowance designed to reward manufacturers that produce vehicles at scale within the country.
The proposed amendments have been published for public consultation, with stakeholders given a four-week period to submit comments before final policy decisions are made.
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