China is urging EV firms to invest in South Africa, official says

BEIJING – China is encouraging its electrical vehicle (EV) manufacturers to invest in South Africa as it seeks to broaden ties between the two nations. 

“We encourage the Chinese companies to consider, very seriously consider, to move some of their assembly lines or value added in South Africa,” the country’s ambassador to South Africa Wu Peng said in a Bloomberg interview in Johannesburg on Dec 11. 

Mr Peng tempered his comment by noting that market conditions would play an important role in such decisions.

China is South Africa’s biggest trading partner and the world’s leader in EVs, an industry the African nation is seeking to grow into. 

South Africa’s automotive industry, which accounted for more than 271 billion rand (S$20.4 billion) in exports in 2023, currently depends on shipments to the European Union, where legislation is expected to gradually reduce demand for vehicles that run on diesel and gasoline. 

While the South African government announced in February that automakers will be allowed to claim a 150 per cent tax deduction on investment in facilities to manufacture EVs, details of the plan have yet to be released. 

Chinese companies operating in South Africa are also expected to expand cooperation in critical areas such as infrastructure, new energy and mineral processing, Mr Peng said in an address ahead of the interview attended by dignitaries.

Chinese companies invested in South Africa include Huawei Technologies, Hisense South Africa, Zijin Mining Group and ZTE Corp. 

“I’m convinced that in the future, more and more Chinese enterprises will come to South Africa, invest in South Africa, and build for South Africa,” Mr Peng said. “Together, China and South Africa can further unlock market potential.” BLOOMBERG