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# South Africa to Invest R1 Billion in Local EV Production
- URL: https://www.startup.africa/south-africa-to-invest-r1-billion-in-local-ev-production-2/
- Published: 2025-03-13T12:14:00.000Z
- Updated: 2025-03-25T12:11:15.000Z
- Author: Lungile Msomi
- Tags: South Africa

South Africa will spend [R1 billion in support of the local production](https://www.treasury.gov.za/documents/National%20Budget/2025/review/FullBR.pdf?ref=startup.africa) of new-energy vehicles and batteries, as well as manufacturing projects. This announcement was made by the National Treasury on Wednesday.

South Africa is the biggest automotive manufacturing hub in Sub-Saharan Africa and plays host to brands like Toyota, Ford, Volkswagen, Mercedes and Isuzu.

“The purpose of the incentive is to enhance the local production and assembly of new-energy vehicles, batteries and projects focused on operational efficiency and competitiveness in new manufacturing projects,” said the National Treasury.

When it comes to[ electric vehicles](https://www.statista.com/outlook/mmo/electric-vehicles/south-africa?ref=startup.africa#:~:text=Underlying%20macroeconomic%20factors:%20The%20South,the%20industry%20in%20South%20Africa.), the country sold 929 EVs in 2023, 6,495 traditional hybrids, and 267 plug-in hybrids. Additionally, in the first quarter of 2024, over 300 battery EVs, 2,574 traditional hybrids, and 138 plug-in hybrids in South Africa.

In 2023, South Africa released its[ Electric Vehicles White Paper](https://www.thedtic.gov.za/wp-content/uploads/EV-White-Paper.pdf?ref=startup.africa) which outlined a strategy to shift the automotive sector from mainly producing internal combustion engine vehicles to a mix that includes electric vehicles by 2035.

The Treasury said the R1 billion has been set aside over the medium term for the[ industrial development support programme](https://www.thedtic.gov.za/financial-and-non-financial-support/incentives/support-programme-for-industrial-innovation/?ref=startup.africa#:~:text=The%20Support%20Programme%20for%20Industrial,SPII%20Matching%20Scheme.). The programme is administered by the Department of Trade, Industry and Competition, and provides financial assistance to South African companies for the development of commercially viable innovative products and processes.

The programme targets a range of industries including manufacturing, energy, agriculture, mining, automotive, textiles, chemicals, infrastructure and technology.

The National Treasury said it expects the incentive to attract R30 billion in investment from the private sector.

For small businesses, the announcement by the government could boost the growth of businesses such as Evelectric. The company recently secured funding from Edge Growth’s Vumela Fund.