Tesla has expressed an interest in investing in South Africa and the government wants native son and founder Elon Musk to set up manufacturing there, Trade and Industry Minister Rob Davies told potential investors Sunday at a Washington, D.C. breakfast, My Broadband reported.
Davies is in town for today’s Africa Growth and Opportunity Act (AGOA) Forum.
AGOA is a unilateral U.S. trade preference program that provides duty-free, quota-free status for more than 6,400 products into the U.S. market. President Barrack Obama in 2015 extended the program for 10 years.
Elon Musk was born and grew up in South Africa before moving to Canada, and then the U.S. Tesla Motors designs, manufactures and sells electric car components and batteries.
South Africa’s successful automotive program has an added incentive for electric vehicles. South Africa understands that electric vehicles are the future, including hybrids and fuel cells, Davies said.
At the beginning of the year, South African media reported that Tesla might set up one of its battery producing gigafactories in the Western Cape province. Tesla subsequently denied that it had plans to do so, Fortune.com reported.
Tesla did announce earlier this year that it would be releasing one of its electric cars—the Model 3—in South Africa. But Tesla’s grid battery, the PowerWall, is more likely to make a serious impact in South Africa than electric cars, according to Fortune. That’s because the country’s underfunded electricity grid means there’s a market for many businesses and home owners keen to protect themselves from blackouts.
The PowerWall is a home battery that is charged using electricity generated from solar panels, according to Tesla. It offers independence from the utility grid and security as an emergency backup.
The first PowerWall was installed in South Africa in April. Italian utility giant Enel is using South Africa as a test ground for its PowerWall-based home-power kit.
Davies said South Africa is on track with the Independent Power Producers Programme (IPP) on renewable energy. It’s one of the best such programs out there according to feedback from stakeholders, Davies said. South Africa’s IPP is a vehicle for securing electricity capacity from the private sector for renewable and non-renewable energy sources.
Davies “encouraged Tesla Company to work with his department and the South African government to explore the possibility of setting up the manufacturing of Tesla products in South Africa,” according to a statement, Fortune reported.
South Africa’s continued benefits under AGOA were jeopardized in late 2015 over U.S. chicken exports. South Africa is the largest AGOA beneficiary, according to the South African Institute of International Affairs.
