17 July 2026

South Africa’s ambition to establish a lithium iron phosphate (LFP) gigafactory has gathered real momentum following the release of the Localisation Support Fund (LSF) feasibility study undertaken by Ernst & Young Advisory Services (EY-Parthenon). According to the study, a gigafactory with an annual production capacity of between 5 GWh and 10 GWh is commercially viable, supported by growing regional demand for battery energy storage systems (BESS), a strong industrial base and access to many of the minerals required for battery production.

The prospect of a local gigafactory has understandably attracted significant interest. It promises investment, job creation and an opportunity for South Africa to strengthen its position in the global energy transition. Much of the conversation has centred on manufacturing capacity, localisation and supply chains. Those issues are important, but they are only part of the picture. Large industrial projects rarely create value in isolation. They give rise to networks of suppliers, technology developers, research institutions and service providers, each with the potential to develop valuable intellectual property (IP).

For many South African businesses, the greatest opportunity may therefore lie not in manufacturing battery cells, but in developing the products, services and technologies that support the industry around them.

Feasibility

The feasibility study makes a compelling commercial case for establishing a South African gigafactory. Regional demand for battery energy storage systems is projected to exceed 55 GWh by 2034, driven by the continued rollout of renewable energy projects, increasing demand for grid resilience, mining operations and the growing adoption of electric vehicles.

South Africa is well positioned to meet this demand. The study identifies the Atlantis Special Economic Zone and the Coega Industrial Development Zone as preferred locations because of their established industrial infrastructure and logistics capabilities. South Africa’s reserves of manganese, phosphate, iron ore and copper further strengthen its position within the battery value chain, while regional partnerships will be important to secure lithium and graphite. The recent World Bank recommendation that South Africa extend the 15% corporate income tax rate to all qualifying Special Economic Zones further highlights the country’s potential to attract advanced manufacturing investment. If implemented, such measures could strengthen the commercial case for locating not only battery manufacturers, but also the broader ecosystem of technology developers, suppliers and innovators within these industrial hubs.

The study also highlights the importance of collaboration between government, industry, international manufacturers and research institutions. While these partnerships will support the development of local manufacturing capacity, they also create opportunities for innovation. Every improvement to a manufacturing process, every new solution and every efficiency gained has the potential to become valuable intellectual property.

Opportunities and the Role of Intellectual Property

The opportunities created by a gigafactory extend well beyond battery production itself. Businesses involved in automation, specialised machinery, software development, testing, recycling, logistics, engineering and certification all stand to benefit from a growing battery industry.

For these businesses, intellectual property can provide a genuine commercial advantage. New products, improved manufacturing processes, software solutions, industrial designs and proprietary know-how can all be protected and commercialised, creating assets that differentiate a business and continue generating value long after a project has been completed.

Perhaps most importantly, businesses do not need to manufacture batteries to participate in this growth. A company developing battery testing equipment, production software or specialised engineering solutions may create intellectual property that can be licensed, exported or adapted for use across multiple industries. In many instances, the intellectual property developed around the battery value chain may prove more valuable than the physical products themselves.

The same applies to universities, start-ups and research institutions. Collaborative research has the potential to generate commercially valuable IP, but only if ownership and commercialisation are considered from the outset. Clear agreements dealing with intellectual property ownership, confidentiality and licensing will help ensure that innovation developed through these partnerships delivers long-term value for both the businesses involved and the South African economy.

Intellectual Property as a Commercial Strategy

Too often, intellectual property is viewed purely as a legal mechanism for protecting innovation. In reality, it is also a commercial asset.

A well-managed IP portfolio can attract investment, strengthen a company’s competitive position and create additional revenue through licensing and strategic partnerships. It can also make a business more attractive to investors and potential collaborators by demonstrating that it possesses assets that competitors cannot easily replicate.

Importantly, not every valuable innovation is a breakthrough invention. Incremental improvements to manufacturing processes, software, quality control systems or operational efficiencies can all become protectable intellectual property if they are identified and managed early. Businesses that recognise these opportunities are likely to build stronger, more resilient competitive positions as South Africa’s battery industry develops.

For that reason, an IP strategy should not be treated as an afterthought. Identifying protectable innovation, securing ownership through appropriate agreements and protecting commercially valuable know-how from the outset will place businesses in a far stronger position to capitalise on the opportunities emerging around the battery sector.

Final Thoughts

The proposed gigafactory represents far more than an investment in battery manufacturing. It has the potential to stimulate an entire ecosystem of innovation across South Africa’s industrial economy.

For businesses, the opportunity lies in identifying where they can contribute to that ecosystem and ensuring that the intellectual property they create is recognised, protected and commercialised. Whether through engineering solutions, software, specialised equipment, research or technical services, IP has the potential to become one of the most valuable assets generated by South Africa’s emerging battery industry.

Ultimately, the success of the gigafactory should not be measured solely by the number of batteries produced, but by the innovation that develops around it. The businesses that recognise and protect those innovations early will be best placed to capitalise on the opportunities that extend well beyond the factory gates.