JOHANNESBURG, South Africa – South Africa is proposing to expand its automotive incentive programme to include critical minerals used in electric vehicle (EV) battery production, a move aimed at strengthening local manufacturing, supporting regional supply chains and positioning the country for the global transition to electric mobility.
The proposal, published by the International Trade Administration Commission (ITAC), forms part of a broader review of South Africa’s automotive policy as the industry adapts to growing demand for electric and hybrid vehicles, stricter emissions regulations and increasing competition from lower-cost vehicle imports.
Critical Minerals Added to Incentive Framework
Under the proposed amendments, minerals essential to EV battery manufacturing would be added to the list of “standard materials” eligible for production incentives.
The expanded list includes:
- Lithium
- Cobalt
- Graphite
- Copper
- Rare earth elements
- Iron
Currently, the automotive incentive programme covers materials such as aluminium, steel and platinum group metals, which are widely used in vehicle manufacturing but do not fully address the growing importance of battery supply chains.
The proposed changes aim to encourage greater participation in emerging EV value chains while creating opportunities for regional mineral producers.
Boosting Regional Value Chains
To qualify for the incentives, the minerals must be sourced from member countries of the Southern African Customs Union (SACU) or the Southern African Development Community (SADC).
Under the proposal, 50% of the value of these materials would be recognised as local value addition, allowing manufacturers to qualify for production-linked incentives.
The measure is expected to strengthen regional mineral beneficiation efforts by encouraging automotive manufacturers to source battery materials from Southern Africa, a region rich in lithium, cobalt, copper, graphite and rare earth deposits.
Supporting EV Manufacturing Growth
The policy revisions are aligned with South Africa’s automotive industrial strategy, which seeks to expand domestic vehicle production and increase localisation across the automotive sector.
The country’s automotive industry remains one of Africa’s largest manufacturing sectors and a major contributor to exports, employment and industrial development.
Through the South African Automotive Master Plan 2035, the government aims to increase annual vehicle production to approximately 1.4 million units while supporting the industry’s transition toward electric and hybrid vehicle manufacturing.
Industry stakeholders view the inclusion of battery minerals as a strategic step toward integrating South Africa more deeply into global EV supply chains.
Leveraging Africa’s Critical Mineral Resources
Southern Africa possesses significant reserves of minerals critical to the energy transition. Countries across the region are increasingly pursuing policies that encourage local processing and value addition rather than exporting raw materials.
Analysts say linking mineral resources to automotive incentives could help attract investment into battery materials processing, component manufacturing and related industries.
The move also supports broader efforts to position Africa as a key participant in the rapidly growing global market for electric vehicles and energy storage technologies.
Public Consultation Underway
ITAC has opened a four-week public consultation period on the proposed amendments, allowing industry stakeholders, manufacturers and investors to provide feedback before the changes are finalised.
If approved, the revised incentive framework could strengthen South Africa’s competitiveness in EV manufacturing while creating new opportunities across regional mining, processing and industrial value chains.