New Policy Aims to Build an EV Battery Production Hub
South Africa proposes EV battery incentives through draft amendments to its Automotive Production and Development Program (APDP), signaling a major step toward becoming a leading manufacturing hub for new energy vehicle (NEV) technologies. The proposed changes were released for public comment on 22 May 2026 by Trade, Industry, and Competition Minister Parks Tau.
Higher Production Credits and Customs Rebates
Under the draft amendments, EV battery manufacturers would receive increased production credits and customs duty rebates. The incentives are specifically designed to encourage local battery assembly and component manufacturing, helping attract investment into South Africa’s growing EV sector.
The proposal also expands the list of eligible materials to include critical battery minerals. To qualify for support, these minerals must be processed within South Africa or neighboring regional countries, promoting regional industrial development and value-added production.
Greater Support for Local Supply Chains
A key feature of the policy is the doubling of the eligibility threshold for government support. The proportion of raw materials that can qualify for incentives will increase to 50%, allowing manufacturers to access significantly larger financial credits.
South Africa proposes EV battery incentives as part of a broader strategy to move beyond its traditional role as an exporter of internal combustion engine vehicles. The country aims to become a supplier of processed battery minerals and complete EV power units for global markets.
Backed by Existing EV Initiatives
The proposed framework aligns with several existing clean mobility policies. These include a 150% investment tax allowance for EV-related facilities and machinery, a dedicated R1 billion support package for EV supply-chain projects, and investments in mineral-processing facilities through state-backed programs.
As global demand for electric vehicles continues to rise, South Africa proposes EV battery incentives to attract manufacturers and strengthen local production capabilities. Industry experts believe that South Africa’s proposed EV battery incentives could position the country as a key player in the global EV battery value chain.
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