South Africa wants 15% import duty on EV batteries

From the newsletter

South Africa’s International Trade Administration Commission (ITAC) has proposed a 15% customs duty on new energy vehicle battery imports to protect its local manufacturing industry. South Africa relies on battery imports, mainly from China. In 2024, it imported electric batteries worth $651 million, making it the country’s 20th largest import.  

• The new tax will increase the cost of EVs in South Africa. Batteries account for a significant portion of the price of an EV.  

• A recent study by South Africa’s Council for Mineral Technology shows the country has the resources and know-how to make lithium-ion batteries for EVs, which could create additional revenues of $890 million a year. 

More details

• ITAC’s proposal seeks to amend South Africa’s existing auto-industrial programme, which has a combination of cash incentives and tax offsets for local manufacturers of motor vehicles, explained its chief commissioner Ayabonga Cawe.

• “As we shift towards battery electric vehicles, many of those batteries are made from a combination of minerals and materials that are found in some relative abundance in the Southern African Customs Union (SACU) and in the Southern African Development Community (SADC),” said Cawe.

• This is not the first time that South Africa is restricting importation of EVs and associated components. The country charges a 25% duty on EVs compared to the lower 18% duty that ICE vehicles pay. This echoes import restrictions on EVs that have also been put in place by a number of African countries in a bid to protect their emerging local industries.

• Egypt has, for example, put in place both tariff and non-tariff barriers on motor vehicle imports to protect its local automotive industry. The country has restricted citizens to importing just one vehicle every five years. Egypt is gradually growing its motor vehicle industry, and is currently in the process of manufacturing its first ever EV – the Nasr E70.

• But not all African countries are taking the protectionist approach being taken by the likes of South Africa. Tanzania for instance seeks to grant duty remission at a rate of 0% instead of 25% for one year on lithium-ion electric batteries used in the assembly or manufacture of EVs, starting in July. This will make imported electric batteries cheaper.

• Questions also abound as to whether it is wise for African countries to put barriers on EVs and components to protect their local industries, which are still tiny. These import restrictions are unnecessarily making EVs costlier in Africa, slowing down adoption. As a result, countries miss out on the benefits of using EVs, especially the reduced cost of transportation which EVs offer. 

Our take

• Instead of abrupt tariffs, South Africa could implement a gradually increasing duty over a period of time, such as between 3–5 years. This provides breathing room to develop local battery manufacturing while avoiding sudden cost spikes that hinder EV adoption. 

• South Africa should leverage its mineral wealth by supporting upstream processing, cell assembly, and skills training. This creates jobs, builds a sustainable industry, and ensures that protective tariffs don’t just become deadweight losses.

• Any incentives or tariffs must be performance-based, linked to measurable progress—like local production milestones, research and development spend, or partnerships with global battery firms. Otherwise, protection without innovation risks entrenching inefficiency.