Precious minerals shipped away: Why SA wants to incentivise local production of EV batteries
Government wants to see EV batteries produced in South Africa.
Image: Newspress
South Africa is considering expanding its vehicle production incentive programme to encourage the production of electric vehicle (EV) batteries in the country.
This would see the ITAC trade commission adding certain locally mined minerals to the list of items that qualify as local content under the Automotive Production Development Programme (APDP), Xagta.com reported.
This list could be expanded to include materials such as lithium, copper, graphite, cobalt sulfate, manganese sulfate and other rare earth minerals.
South Africa is a significant producer of minerals such as manganese, nickel, cobalt, lithium and platinum. Building batteries in the country would help to maximise the value extracted from these precious minerals.
The government is also said to be considering increasing the customs duties on EV batteries, in order to further encourage local production, Xagta added.
However, this move could backfire if a manufacturer is interested in producing EVs in South Africa, but does not wish to use locally produced batteries. It could mean losing the entire vehicle production contract rather than just foregoing production of the battery components.
The APDP operates through a system of rebates and refunds on specific customs duties, and is aimed at incentivising local production of vehicles.
Following the publication of the Electric Vehicle White Paper in late 2023, South Africa has already taken concrete steps to incentivise the local production of electric vehicles.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
From March 2026, car companies will be able to claim a 150% tax deduction on investments related to EV production in South Africa. This includes new production equipment and factory upgrades made with the intention of producing EVs.
The new incentive programme will run until March 2036.
The South African automotive sector produces over 500,000 vehicles per year. While plug-in hybrid vehicles are produced for export by both BMW and Ford, no fully electric vehicles are currently produced locally.
A move to full EV production could be critical to the survival of the local industry, given that the European Union, which is South Africa's main export destination, plans to ban the sale of new internal combustion engined vehicles from 2025.
Some manufacturers, such as Volkswagen, are reluctant to invest in the local production of EVs unless there is a significant local demand for such vehicles.
Although President Cyril Ramaphosa announced in late 2024 that EV purchase incentives will be introduced, no timelines or details have been released as yet.
Currently, EVs attract a higher import duty than internal combustion vehicles, with rates of 25% compared to 18%.
IOL
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
a day ago
- IOL News
Strengthening trade ties: South Africa must evolve beyond a market for Chinese products
South Africa and China have taken a firm step toward strengthening trade ties, with both nations agreeing to speed up efforts to make trade smoother and more efficient. Image: Sars South Africa and China have taken a firm step towards strengthening trade relations, with both countries agreeing to accelerate efforts to make trade smoother and more efficient. This follows a meeting between Chinese Ambassador to South Africa Wu Peng, SARS Commissioner Edward Kieswetter, and International Trade Administration Commission (ITAC) Commissioner Ayabonga Cawe in Pretoria on Wednesday. China is currently South Africa's largest trading partner, having overtaken the European Union in 2023. Bilateral trade between the two countries reached US$34.18 billion last year, significantly outpacing the EU's US$1.34 billion in trade with South Africa. However, despite the growth in trade, experts and economists have raised concerns about an imbalance in the structure of the relationship. In his weekly letter last year, President Cyril Ramaphosa also noted the need to boost South Africa's manufacturing capacity and increase exports of value-added goods. "There is an imbalance in the structure of our trade. South Africa exports mainly minerals and agricultural products to China and imports largely manufactured products from China." Kieswetter also expressed a vision for a partnership that goes beyond South Africa serving merely as a market for Chinese goods, advocating for increased Chinese investment in manufacturing and assembly operations within the country. 'China, as the largest trading partner to South Africa, is ideally suited to strengthen this long-standing relationship. I would like to see the relationship grow not only with South Africa as a marketplace for Chinese products, but as a destination for assembly and manufacturing by Chinese investors. South Africa is also ideally suited as a strategic partner into the rest of Africa.' Meanwhile, Peng described the relationship as an 'All-Round strategic cooperative partnership for a new era. 'China attaches great importance to developing economic and trade relations between China and South Africa, which in recent years have made great progress. Trade, investment, and personnel exchanges between the two countries have been increasingly strengthened.' ITAC Commissioner Cawe highlighted concerns about the unstable global trade environment and its impact on supply chains and key markets. He pointed to the risks of rising inventories leading to trade diversion, particularly for a small, open economy like South Africa. 'We remain open to engagement with our Chinese counterparts in securing the participation and co-operation of their exporters and other interested parties in such investigations, as a key trade-related element in our bilateral relationship.'he said. [email protected] IOL Business Get your news on the go, click here to join the IOL News WhatsApp channel
IOL News
2 days ago
- IOL News
Precious minerals shipped away: Why SA wants to incentivise local production of EV batteries
Government wants to see EV batteries produced in South Africa. Image: Newspress South Africa is considering expanding its vehicle production incentive programme to encourage the production of electric vehicle (EV) batteries in the country. This would see the ITAC trade commission adding certain locally mined minerals to the list of items that qualify as local content under the Automotive Production Development Programme (APDP), reported. This list could be expanded to include materials such as lithium, copper, graphite, cobalt sulfate, manganese sulfate and other rare earth minerals. South Africa is a significant producer of minerals such as manganese, nickel, cobalt, lithium and platinum. Building batteries in the country would help to maximise the value extracted from these precious minerals. The government is also said to be considering increasing the customs duties on EV batteries, in order to further encourage local production, Xagta added. However, this move could backfire if a manufacturer is interested in producing EVs in South Africa, but does not wish to use locally produced batteries. It could mean losing the entire vehicle production contract rather than just foregoing production of the battery components. The APDP operates through a system of rebates and refunds on specific customs duties, and is aimed at incentivising local production of vehicles. Following the publication of the Electric Vehicle White Paper in late 2023, South Africa has already taken concrete steps to incentivise the local production of electric vehicles. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ From March 2026, car companies will be able to claim a 150% tax deduction on investments related to EV production in South Africa. This includes new production equipment and factory upgrades made with the intention of producing EVs. The new incentive programme will run until March 2036. The South African automotive sector produces over 500,000 vehicles per year. While plug-in hybrid vehicles are produced for export by both BMW and Ford, no fully electric vehicles are currently produced locally. A move to full EV production could be critical to the survival of the local industry, given that the European Union, which is South Africa's main export destination, plans to ban the sale of new internal combustion engined vehicles from 2025. Some manufacturers, such as Volkswagen, are reluctant to invest in the local production of EVs unless there is a significant local demand for such vehicles. Although President Cyril Ramaphosa announced in late 2024 that EV purchase incentives will be introduced, no timelines or details have been released as yet. Currently, EVs attract a higher import duty than internal combustion vehicles, with rates of 25% compared to 18%. IOL
TimesLIVE
2 days ago
- TimesLIVE
Burning cargo ship carrying 3,000 vehicles abandoned off Alaska
The crew of a cargo ship carrying about 3,000 vehicles, including 800 electric vehicles, abandoned it off the coast of Alaska after a fire broke out on-board, its operator Zodiac Maritime said on Wednesday. The 22 crew members were safely evacuated from the ship after they failed to put out the fire, Zodiac said as it focuses on salvaging the vessel. They were evacuated via lifeboat and were being transferred to a nearby merchant vessel in tandem with the US Coast Guard. The vessel, Morning Midas, was located 482.8km southwest of Adak in Alaska, the Coast Guard said on its X account. The Liberia-flagged ship left China's Yantai port on May 26 and was on the way to Lazaro Cardenas, Mexico, according to LSEG data. Smoke was initially seen rising from a deck loaded with EVs, the company said. It is not clear what brand of vehicles the ship was carrying. EV-related fires on ships are challenging to extinguish due to the heat generated and risk of reignition, which could persist for days. The Coast Guard said aircrew and a cutter ship have been sent to assist with the situation and three vessels were already on the scene. In 2022, a ship carrying 4,000 luxury cars, including Porsches and Bentleys, sank off the Portuguese Azores archipelago nearly two weeks after it caught fire. Fires on-board vessels, particularly on container ships, car carriers and roll-on/roll-off ships are a big concern for insurers. Steamship Mutual, one of the insurers of Morning Midas, did not respond to a Reuters request for comment. Such incidents across all vessel segments hit the highest level in a decade in 2024, according to insurer Allianz Commercial. 'The reality is the risk remains significant due to the size of these ships and the complexities involved in firefighting and salvage,' Allianz said in its 2025 safety and shipping review report.
