ITAC proposes 15% duty on imported batteries for new energy vehicles to spur local production

The International Trade Administration Commission of South Africa (ITAC) is proposing an import tariff of 15% on batteries for new energy vehicles (NEVs).

The rationale is to build local capacity in the manufacture and also assembling of electric vehicles (EVs).

The proposal is an amendment to the existing auto-industrial programme, that has a combination of cash incentives and tax offsets, explains ITAC chief commissioner Ayabonga Cawe.

What they're saying effectively, Cawe goes on, is that with the advance in automation propulsion technologies from combustion engines towards hybrids, battery-electric vehicles and so on, the scope of the materials that would go into these vehicles needs to be widened.

"In a typical combustion engine vehicle under our programme we would have had steel, brass, platinum group metals (PGMs) and all manner of other materials, that when outsourced from the customs union, make these firms liable for benefit for local content..."

"...and, as we shift towards battery electric vehicle, 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)."

"So this is in keeping with some of those developments and propulsion technologies... and we are trying by this effort to really harmonise and align our auto-industrial package to move in concert with that."

Ayabonga Cawe, Chief Commissioner - ITAC

For more detail, listen to the interview audio at the top of the article