SA Must Accelerate New Energy Vehicle Transition to Secure Competitiveness – Minister Tau
The Minister of Trade, Industry and Competition, Mr Parks Tau, has emphasised that South Africa’s future competitiveness in the automotive sector hinges on rapidly embracing New Energy Vehicles (NEVs). He also highlighted the opportunities presented by Africa’s integration under the African Continental Free Trade Area (AfCFTA).
Delivering his keynote address at the 2025 South African Auto Week, hosted by the National Association of Automobile Manufacturers of South Africa (NAAMSA) in Gqeberha today, Minister Tau said the global auto industry was undergoing its most significant transformation in a century, and South Africa had to adapt with urgency.
“Global markets are rapidly transitioning away from internal combustion engines. The United Kingdom and the European Union, which together account for almost half of South Africa’s vehicle exports, have committed to ending the sale of new fossil-fuel vehicles by 2035. If we do not adapt, we risk losing these key export markets,” he said.
Strength of the Automotive Sector
Tau reaffirmed the importance of the auto industry to South Africa’s economy. In 2024, the sector contributed 5.2% to GDP, accounted for 22.6% of total manufacturing output, and exported vehicles and components worth R268.8 billion to 155 markets worldwide. The sector sustains nearly 500,000 direct jobs and supports around 1 million across the value chain.
“Beyond the numbers, this is a sector that anchors our manufacturing capacity, attracts consistent investment, and integrates South Africa into global supply chains. It is one of our most competitive industries and gives us a unique advantage in Africa,” he said.
“In 2024, 15,611 New Energy Vehicles were sold in South Africa, representing 3% of the market. Sales of hybrids and electric vehicles are growing steadily. Importantly, our domestic industry has already attracted over R12 billion in new investment into NEV models,” said Tau.
He explained that government has amended the Automotive Production and Development Programme (APDP2) to include electric vehicles and their components. A 150% tax deduction for qualifying investments in EV and hydrogen vehicle production will take effect from 2026. He also highlighted ongoing partnerships with universities and research institutions to develop the next generation of auto engineers and technicians.
Harnessing South Africa’s Critical Mineral Advantage
“Our country and region hosts some of the world’s largest deposits of platinum, manganese, nickel, cobalt, and rare earth minerals. This is a once-in-a-generation opportunity to move beyond exporting raw materials and instead beneficiate locally, producing battery-grade inputs and building a competitive battery manufacturing value chain here in Africa,” he stressed.
Tau confirmed that government, in partnership with industry and global institutions such as the World Bank, has finalised a National Critical Minerals Strategy to secure supply chains for the domestic NEV industry, attract investment into gigafactories, and support the development of hubs for battery assembly, recycling, and research.
“This is not just an industrial project. It is about positioning South Africa as a maker of value, not a taker, creating skilled jobs, spurring innovation, and deepening Africa’s role in the global clean energy transition,” he added.
Africa’s Opportunity Through AfCFTA
Tau also highlighted the growing importance of Africa as an export destination. In 2024, South Africa’s vehicle exports to the continent were worth R48.1 billion, an increase of 12.4% year-on-year.
“The AfCFTA is a game-changer. It enables duty-free access beyond the Southern African Development Community (SADC), it supports regional value chains, and encourages infrastructure investment. It also opens doors for collaboration in battery manufacturing and mineral beneficiation across Africa,” he said.
South Africa is advancing the creation of an African Auto Pact, which will harmonises policies and rules of origin to attract investment and build regional industrial capacity.
“Through AfCFTA, we can build a continental battery industry, leveraging resources from across Africa and combining them with South Africa’s manufacturing and research strengths. Our vision is an auto sector that creates value from Cape to Cairo,” said Tau.
Media enquiries:
Kaamil Alli – Ministerial Spokesperson
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WhatsApp: +27 82 520 6813
E-mail: KAlli@thedtic.gov.za
OR
Bongani Lukhele – Director: Media Relations
Tel: (012) 394 1643
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E-mail: BLukhele@thedtic.gov.za
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