Toyota’s announced entry into South Africa’s EV market with three fully electric models slated for early 2026 is the clearest sign yet that Africa’s auto landscape is shifting. At the same time, the South African government has allocated R1 billion (~$54 million) to stimulate local EV and battery production, while Chinese brands such as BYD, Chery, and Great Wall are expanding showrooms and introducing hybrids and new-energy vehicles across the continent.
These moves have helped new-energy vehicle (NEV) sales in South Africa roughly double in a year, a sign that demand is waking up even as serious barriers remain.
South Africa’s push is twofold: manufacturers are finally starting to offer credible EV and hybrid models locally, and policymakers are beginning to back industrialisation with real money and tax incentives. Toyota’s plan to import and later localise EV models acknowledges both market opportunity and the realities on the ground: consumers face low incomes, high import duties, patchy charging and unreliable grid constraints Toyota itself has publicly highlighted.
Meanwhile, the National Treasury’s R1 billion industrial incentive is explicitly targeted at new-energy vehicles, batteries, and manufacturing projects, with expectations that it will attract substantially larger private investment if paired with the right complementary policies.
Who’s Moving and Where
China’s BYD has become the poster child for rapid market entry. Having launched in South Africa in 2023, BYD plans to nearly triple its dealer network by 2026 and has already broadened its model range beyond the ATTO 3. Other Chinese players are following quickly: Chery has launched hybrid SUVs and is studying local assembly, while Great Wall Motor (GWM) continues to roll out plug-in hybrids and hybrid models across the region.
At the same time, African manufacturers are beginning to stake a claim. Nigeria’s Innoson Vehicle Manufacturing (IVM) is developing electric models, a sign that the local industry is preparing to participate rather than simply import.
The Numbers That Matter
Concrete figures show the scale of the shift. NEV sales in South Africa rose from roughly 7,782 units in 2023 to about 15,611 in 2024, driven largely by a handful of new models and growing awareness.
The R1 billion incentive announced by the Treasury may look modest compared to the scale of global EV investment, but it is projected to leverage as much as R30 billion in private investment. Importantly, this signals a policy pivot: away from consumer subsidies and towards industrial policy aimed at local production and building battery supply chains.
There are three big opportunities for Africa to “leapfrog” into cleaner mobility:
- Rapid adoption of two- and three-wheeler electrification is cheaper, more accessible, and already suited to urban and peri-urban areas.
- Integration of EVs into renewables-based microgrids for fleet and public transport, reducing reliance on unreliable grids.
- Regional assembly hubs that capture more value from battery and vehicle manufacturing rather than simply importing finished cars.
Also read: South Africa’s Budget Pushes for Renewable-Powered EV Charging Network
Examples already exist. Electric tricycles in Zimbabwe, offered through lease-to-own models, are improving women’s incomes and access to services. Such small, pragmatic deployments can scale social impact quickly.
But three obstacles could blunt that promise:
- Charging infrastructure is still sparse outside major cities.
- Grid reliability and the cost of electricity remain real constraints for vehicle owners and fleet operators.
- Fiscal and tariff structures including high import duties and uneven tax incentives keep prices high and adoption slow.
Policy Turning Points
South Africa’s package including the R1 billion allocation, a 150% tax deduction for qualifying EV production investments, and the Electric Vehicles White Paper is designed to attract automaker investment and build a battery and critical-minerals strategy. These measures aim to raise local content, protect jobs, and shift the country from importer to manufacturer.
The success of these policies, however, depends on how quickly and effectively they are implemented. Clear timelines, localisation targets, and complementary infrastructure investments from charging rollout to grid upgrades will determine whether South Africa truly becomes a hub for EVs or simply another stop for imports.
Industrial and Economic Stakes
If industrial policy works as intended, the payoff is large. Treasury estimates suggest that a relatively small public incentive could mobilise tens of billions in private investment, while boosting local value addition in the auto sector.
But South Africa’s auto industry is fragile. Recent plant closures and job losses underscore how sensitive automotive manufacturing is to global trade shifts, tariff changes, and local competitiveness. For African economies, the real choice is whether to capture a slice of the global EV supply chain assembly, battery components, and recycling or remain primarily an import market for finished vehicles.
Also read: How Africa’s Mega Dams and Hydropower Projects Are Reshaping the Continent
What It Means for Stakeholders
- For consumers and fleet managers: More model choice is coming, especially in hybrids and smaller EVs, but prices won’t fall significantly until tariffs, incentives, and local assembly change the economics.
- For policymakers: Industrial incentives must be paired with infrastructure plans. Without reliable charging networks and grid resilience, production targets will outpace the ability to use EVs sustainably.
- For investors and entrepreneurs: The immediate opportunities may lie in charging networks, battery servicing, and two- or three-wheeler leasing models that reduce upfront costs for customers.
