South Africa Bets on Its Minerals to Keep Carmaking Competitive

South Africa is trying to turn a natural advantage into an industrial one.

Facing the global shift to electric vehicles, the government has proposed expanding its automotive incentive programme to include minerals used in EV batteries. The move is a sign that Pretoria sees the next battle in carmaking not only on the assembly line, but deep in the supply chain.

The proposal from the International Trade Administration Commission would add lithium, graphite, copper, cobalt, iron and rare earths to the list of materials that can count towards production incentives. At present, the programme mainly supports traditional inputs such as aluminium, steel and platinum group metals. Under the new approach, qualifying battery minerals sourced from the Southern African Customs Union and the Southern African Development Community would have half their value counted as local content.

That matters because South Africa's auto industry is under pressure from several directions at once. Global emissions rules are tightening and consumers are slowly moving towards electric and hybrid models. Low-cost imports, especially from China and India, are adding fresh competition. In that environment, a country that exports vehicles cannot rely on yesterday's policy toolkit.

The strategy also fits the goals of the South African Automotive Master Plan 2035, which aims to lift annual output to about 1.4 million vehicles, deepen localisation and support the transition to electric mobility. Supporters of the change argue that the real opportunity lies beyond assembling finished cars. If South Africa can link mining, processing and manufacturing more effectively, it may capture a larger share of the EV value chain.

Still, incentives alone will not guarantee success. Building a credible EV ecosystem will require reliable electricity, better logistics and investor confidence in long-term policy direction. Yet the logic of the proposal is clear. In the age of electrification, the countries that control critical inputs may be the ones that keep their factories busy. South Africa wants to be one of them.