South Africa Wants to Shift Gear from Battery Assembly to Gigafactory
On 18 March 2026, Irshaad Kathrada, CEO of Localization Support Fund, released its feasibility study report on lithium battery cell manufacturing in South Africa. The study evaluated five Special Economic Zones (SEZ) in South Africa for the implementation of a lithium iron phosphate (LFP) cell manufacturing plant.
The study identified the Atlantis SEZ in Western Cape as the first choice and the Coega Industry Development Zone in Eastern Cape as the second choice. Their proximity to a deep-water port and access to clean and cheap renewable energy were key factors in the ranking.
According to the report, the regional battery demand in Southern Africa is forecasted to reach 55 GWh by 2034, with an average compounded annual growth rate of 30%. The surge in demand is driven by both the need for utility-scale energy storage systems (ESS), and the rapid proliferation of Electric Vehicles (EV).
To take advantage of this opportunity, South Africa has to ramp up its cell production capacity to 10 GWh in the short-term. South Africa can easily support two to three large-scale battery gigafactories.
Globally, South Africa has the advantage of possessing all the raw ingredients that go into the making of the battery, including iron ore, copper, phosphate, and can tap neighboring Zimbabwe and Mozambique for lithium and graphite, respectively. As such, South Africa battery plants are competitive with respect to the plants in Latin America and Asia. If local refining of LFP materials is implemented, South Africa could become even more competitive.
Polarium started assembling lithium batteries at its Cape Town plant in 2022; now, it plans an upgrade in response to the market. Balancell is also in Cape Town and has found a niche by producing ‘smart batteries’ for refrigerated trucks, forklifts, and yachts.
BYD is in talks with Eskom to supply ESS in the short-term and deploy a nationwide charging network, with the intention to localize manufacturing at a later stage. OneSun also announced plans to build a battery plant in South Africa.
The Department of Trade, Industry and Competition is mulling an update of its Automotive Production and Development Program (APDP) to lure investors with more attractive incentives, including tax deductions and production credits.