Government has reprioritised almost R1 billion to facilitate SA’s transition to electric vehicles. Image: Pixabay
Budget Speech 2024: Electric car production to be ramped up
Finance minister Enoch Godongwana used his 2024 Budget Speech on Wednesday to address some of South Africa’s energy challenges.
Government has reprioritised almost R1 billion to facilitate SA’s transition to electric vehicles. Image: Pixabay
During his 2024 Budget Speech, Godongwana admitted that load shedding is disrupting production, operations and livelihoods in South Africa.
As such, he assured the nation that reforming the energy sector will result in long-term energy security. “We took the necessary decisions in the past five years and these are bearing fruit,” he said.
To promote investments in renewable energy, Treasury’s budget proposes a limit increase for renewable energy projects.
To further ease the strain on embattled power utility Eskom, Treasury is planning to support the production of new energy vehicles.
ALSO READ: Budget Speech 2024: Huge rollout of smart prepaid meters
A boost to production of electric cars
The Electric Vehicles White Paper outlines government’s strategy to move towards broader new energy vehicle production and consumption in South Africa
Starting with electric vehicles, this will also include hydrogen-powered vehicles.
Godongwana said the objective is to shift the automotive industry’s focus from predominantly manufacturing internal combustion engine vehicles to a dual platform that includes electric vehicles, by the year 2035.
“To encourage the production of electric vehicles in South Africa, government will introduce an investment allowance for new investments, beginning 1 March 2026, “he said.
Under this allowance, manufacturers can claim 150% of qualifying investment spending on electric and hydrogen-powered vehicles in the first year.
“The incentive will be implemented in addition to the existing support under the Automotive Production Development Programme,” he added.
Government has also reprioritised R964 million over the medium term to facilitate this transition to electric cars.
SMART PREPAID METERS
To increase efforts to reduce electricity demand, Godongwana said Treasury are introducing a new R2 billion conditional medium-term grant to fund the rollout of smart prepaid meters.
“This will begin with municipalities that have been approved for debt relief,” he added. Read more on this story here.
