The International Trade Administration Commission (ITAC) has proposed a 15% import tariff on new energy vehicle (NEV) batteries.
The move is an attempt to encourage original equipment manufacturers (OEMS) to fabricate their technology locally, but is likely to raise prices for consumers in the short to medium term.
This is because OEMs like Toyota and BMW construct NEVs at their factories in South Africa, but import the batteries that they run on.
In a Government Gazette notice on 29 May 2025, the ITAC reviewed the list of items that qualify as standard materials under the Automotive Protection and Development Programme.
The ITAC stated it will include measures to support NEV battery manufacturing in South Africa.
“These materials and minerals, to the extent that they can be found in viable deposits and reserves in South and Southern Africa, present an opportunity to increase manufacturing capabilities,” it said.
“Several minerals associated with battery electric vehicle production, including all hybrid derivatives, are not currently contained in the list of standard materials.”
In pursuit of this goal, the ITAC has invited stakeholders to submit comments on its proposals.
One proposal is to expand the list of standard materials, sourced from the Southern African Development Community (SADC) region, to include the following:
- Iron
- Lithium
- Copper
- Polymers
- Graphite
- Cobalt Sulfate
- Nickel Sulfate
- Manganese Sulfate
- Sodium Carbonate
- Rare earth minerals
It is also considering increasing the customs duty applicable to NEV batteries to the World Trade Organization-bound rate of 15% ad valorem.
The commission argued that doing so will “provide tariff support for all future manufacturers of batteries, which can be accomplished by creating an eight-digit tariff subheading that will separate the batteries from cells.”
This is expected to secure the interests of OEMs for years to come, as hybrid and electric car adoption continues to pick up around the world.
Bad news for consumers
While the decision to impose a 15% import tariff on batteries arguably has good intentions behind it, it could make things more difficult for local manufacturers and consumers.
OEMs like Toyota, BMW, Ford, and Mercedes-Benz all produce electrified vehicles in South Africa, but the batteries are sourced from other countries.
Toyota, for example, makes the Corolla Cross Hybrid, which gets its batteries from the United States and Japan.
Another case is the plug-in hybrid BMW X3, which receives its power cells from Hungary, the US, Mexico, and China.
The 15% duty on these imported batteries could, therefore, substantially raise the cost of manufacturing for NEVs in South Africa.
This, in turn, is likely to raise prices for consumers until South Africa reaches the point where it can produce and supply lithium-ion batteries for local carmakers, which could take several years.
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