South Africa is courting Chinese investment in its R500-billion automotive industry after President Cyril Ramaphosa signed a tax break into law to promote electric and hydrogen-powered vehicles.
Why it matters
The amendment enables a 150% tax deduction for investment in “new-energy” vehicle production, aligning South Africa’s auto sector with global shifts.
This comes as Chinese automakers like Chery Automobile and Great Wall Motor expand their footprint in Africa’s biggest car market.
What They’re Saying
“With good government policies, we will attract new investment, we will increase and retain investment,” said Automotive Business Council CEO Mikel Mabasa.
The big picture
South Africa’s car manufacturing sector, a key driver of the economy, faces challenges as the European Union moves to phase out internal combustion engines — threatening its biggest export market.
- Despite the tax break, automakers like Volkswagen and Isuzu say they don’t foresee producing EVs locally yet.
- Stellantis plans to produce EVs in South Africa only when the operating environment is favorable.
State of play
The Chinese government is encouraging automakers to invest in South Africa, with three Chinese automakers already signing NDAs with the Automotive Business Council.
Between the lines
South Africa’s strengths include being the world’s largest manganese producer and a significant miner of nickel and platinum — critical materials for EV batteries and hydrogen fuel cells.
Source: Tech Central
