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President Cyril Ramaphosa announced Thursday that South Africa is considering offering tax rebates or incentives to encourage the purchase of electric vehicles. International automakers such as Ford, Volkswagen, BMW, and Toyota produce models for the local and European markets in South Africa. The UK and the EU use 46% of the nation's automobile production.As Africa’s most industrialised country transforms its automotive industry, President Cyril Ramaphosa announced Thursday that South Africa is considering offering tax rebates or incentives to customers to encourage the purchase of electric vehicles. International automakers such as Ford, Volkswagen, BMW, and Toyota produce models for the local and European markets in South Africa. Together, the UK and the EU use 46% of the nation’s automobile production.
Ramaphosa stated at a conference for the automobile sector that certain international automakers are under pressure to switch to electric and hybrid vehicles due to the push for cleaner and more sustainable fuels as well as stricter regulations in important regions. As a result, the automotive sector in South Africa is setting up shop to capitalise on the market for new energy cars. “Consideration must be given to incentives for manufacturers, as well as tax rebates or subsidies for consumers, to accelerate the uptake of electric vehicles,” Ramaphosa stated.
In February, Finance Minister Enoch Godongwana announced in his budget that the government would create a new investment allowance starting on March 1, 2026, to promote the production of electric vehicles in South Africa. As a result, manufacturers will be able to claim 150% of their first-year qualifying investment spending on electric and hydrogen-powered vehicles. “That do not exclude alternative technologies such as hybrids and plug-in hybrids,” Ramaphosa mentioned, adding that the government is trying to establish full policy guidelines on so-called new energy vehicles.
A white paper detailing measures to facilitate the transition, including government incentives and a temporary reduction in import levies for batteries in domestically built and sold vehicles, was released by the ministry of commerce, industry, and competition last year.
The study also promoted the growth of value chains in the market for green hydrogen fuel cells and the manufacture of batteries for battery electric vehicles in South Africa.
