South-African Alarm Bell

On November 1, the National Treasury of South Africa issued a statement warning about the potential challenges that the transition to new energy vehicles (NEVs) could present to the South African vehicle production industry. This transition necessitates a delicate balance between meeting domestic market demand, establishing renewable energy-powered charging infrastructure, and supporting production.

To navigate this transition, the government intends to implement a series of tax and expenditure measures aimed at bolstering the automotive sector. The specifics of these measures will be outlined in the 2024 Budget Review. The primary objective is to ensure that the automotive sector continues to play a pivotal role in the industrial development of the domestic economy.

As part of a more comprehensive strategy, South Africa is also exploring collaboration with other African nations to develop battery production capabilities within the continent. This initiative involves pooling the abundant critical-mineral resources that Africa possesses, with the aim of strengthening the regional battery industry.

In the meanwhile, the number of electrified vehicles remains low, although ramping up significantly since 2021.

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Data Credit: Marklines