The dtic director-general Simphiwe Hamilton said the initiative forms part of broader industrial cooperation with the European Union under the Clean Trade and Investment Partnership (CTIP), reflecting increasing alignment between trade, climate policy and industrial strategy.
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South Africa’s plans to develop electric vehicle (EV) battery manufacturing capacity are firmly aimed at global competitiveness rather than narrow import substitution, the Department of Trade, Industry and Competition (the dtic) director-general Simphiwe Hamilton told Parliament on Tuesday.
Appearing before the parliamentary portfolio committee on trade and industry, Hamilton addressed concerns raised by DA MP Toby Chance about whether the push for local battery production was primarily driven by localisation requirements or whether it would be globally competitive.
Chance cautioned that building battery manufacturing capacity without ensuring international competitiveness could leave South Africa supplying only domestic demand while struggling to compete in export markets.
“Is the intention to build local batteries driven by the need for localization or is there going to be a global competitive element to sit on?” Chance asked.
“Because what I'm worried about is that once we start making batteries in this country, we might find that trying to make sure that our local battery manufacturing capacity is globally competitive, not just to supply our local needs, but also to supply the international markets.”
In response, Hamilton emphasised that the strategy is anchored in global integration.
“The EV battery manufacturing capability that is sought is not premised on import substitution and localisation. Yes, localisation is key. It is premised on integrating into a global automotive supply chain and part of the greening of industrialisation in South Africa,” he said.
Hamilton said the initiative forms part of broader industrial cooperation with the European Union under the Clean Trade and Investment Partnership (CTIP), reflecting increasing alignment between trade, climate policy and industrial strategy.
He explained that the objective is to build battery production capability that can supply original equipment manufacturers (OEMs) operating in both local and international markets.
“The idea is to create a capability that will form part of the automotive field of some of the OEMs, or if not as many of them as possible,” he said.
South Africa’s automotive sector is a major contributor to exports and manufacturing output, but it has faced mounting pressures since the adoption of the Automotive Masterplan in 2021.
Global semiconductor shortages, supply chain disruptions and the rapid global shift toward EVs have exposed vulnerabilities in traditional internal combustion engine value chains.
To respond to these challenges, the dtic has published the White Paper on Electric Vehicles and rolled out shop-floor competitiveness interventions in partnership with the Japanese government. A comprehensive automotive policy review is also under way to revitalise the sector and position it for accelerated growth.
The overarching vision of the Masterplan is to create a globally competitive and transformed industry that contributes meaningfully to South Africa’s productive economy. Key objectives include raising the country’s share of global vehicle production to 1%, increasing local content to 60%, and achieving full employment growth across the value chain.
Central to achieving these goals is adapting to the EV transition.
Hamilton drew a comparison with South Africa’s earlier success in catalytic converter manufacturing, where the country leveraged its platinum group metal reserves to become a global leader in production.
“[The idea is to] ensure that we play in the same fashion that we played in the manufacturing of the catalytic converters, where we became the lead because we held the minerals that were input for that in the form of platinum,” he said.
“And so if we can replicate that success in the form of EV batteries, I think the country would move forward.”
South Africa holds significant reserves of battery-related minerals such as manganese and nickel, creating an opportunity to move up the value chain rather than exporting raw materials. By aligning mineral endowments with battery manufacturing, policymakers hope to replicate the catalytic converter model in the EV era.
The Localisation of EV Battery Manufacturing Policy Framework is currently being finalised, with the first draft was due in February. Government has indicated that localisation efforts will be structured to support export competitiveness rather than isolate the industry.
As global markets tighten emissions standards and accelerate the phase-out of internal combustion engines, ensuring that South Africa remains embedded in global automotive value chains will be critical to safeguarding jobs and investment.
Hamilton suggested that success in EV battery manufacturing would not only protect existing automotive capacity but also open new avenues for technological development, skills upgrading and green industrial expansion.
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