On October 18, 2024, President Cyril Ramaphosa announced that South Africa is contemplating the implementation of tax incentives or subsidies for consumers to stimulate the purchase of electric vehicles, amidst the country’s transition towards a more industrialized automotive economy in Africa.
Prominent global automakers such as Ford, Volkswagen, BMW, and Toyota produce models in South Africa for both domestic and European markets. Collectively, Britain and the European Union account for 46% of the vehicles manufactured in the country.
Ramaphosa, speaking at an automotive industry conference, noted that the shift towards cleaner and more sustainable fuels, coupled with stringent regulations in key markets, is exerting pressure on global automakers to pivot towards electric and hybrid models.
Consequently, South Africa’s automotive industry is positioning itself to capitalize on the burgeoning demand for new energy vehicles.
To foster the production of electric cars within the country, Finance Minister Enoch Godongwana revealed in his February budget that the government will introduce an allowance for new investments from March 1, 2026.
This allowance will permit producers to deduct 150% of eligible investment expenses related to electric and hydrogen-powered vehicles in the initial year.
