South Africa Boosts EV Market with Incentives and Local Manufacturing by 2026

South Africa is making great progress in its electric vehicle (EV) market, with plans to boost both local production and adoption.

President Cyril Ramaphosa recently announced that the government is exploring tax rebates, subsidies, and other incentives to encourage EV manufacturing in the country.

This initiative aims not only to create a greener future but also to ensure that South Africa remains competitive as the global automotive industry shifts towards electric mobility.

The government’s focus on EVs comes at an important time. In February, Finance Minister Enoch Godongwana introduced a scheme that will allow producers of electric and hydrogen vehicles to claim up to 150% of qualifying investment spending in their first year.

However, this incentive won’t take effect until 2026, leaving some industry players hoping for more immediate support.

According to the Electric Vehicle Market Intelligence Report by GreenCape, there are several promising areas for investment in South Africa’s EV sector.

The report highlights four key areas where growth is expected. First, demand for electric micro-mobility solutions, like electric bicycles and scooters, is rising.

These vehicles are becoming popular for last-mile deliveries, offering businesses and consumers a cost-effective option.

Second, electrifying public transportation is a promising opportunity. Electric buses and minibus taxis can help transport operators cut fuel and maintenance costs, boosting profitability. This shift could also lead to cleaner air in cities, making urban environments healthier.

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South Africa Gears Up for EV Boom with Local Production Set for 2026

The third opportunity lies in electrifying freight and logistics. Replacing traditional combustion engine trucks with electric vehicles can significantly lower costs for logistics companies.

The market for electric trucks is expected to grow as businesses look for more sustainable ways to operate.

Finally, local manufacturing of electric passenger vehicles offers huge potential. South Africa already has facilities capable of building commercial vehicles, which can be adapted for EV production using imported chassis.

Currently, though, there are no fully manufactured EVs in the country—only locally assembled models.

To support these efforts, the South African government has released an Electric Vehicle White Paper outlining its strategy for the EV market.

The document highlights the importance of local production and sets a timeline for when the first domestically manufactured battery electric vehicles could be produced—as early as 2026.

Despite the positive momentum, challenges remain. High import duties on electric vehicles—around 25%—and additional luxury taxes make EVs costly for consumers.

The government is working with stakeholders to find ways to lower these import costs and make EVs more affordable.

Additionally, South Africa’s ongoing energy supply issues have slowed the growth of the EV market.

Eskom, the country’s power utility, has faced criticism for inconsistent electricity provision, which makes potential EV owners hesitant.

However, Eskom has announced plans to switch its entire fleet to electric vehicles by 2040 and is working on developing a charging infrastructure to support the broader adoption of EVs.

By focusing on local manufacturing and tackling the challenges that exist, South Africa has the chance to become a leader in sustainable transportation solutions across Africa.

With collaboration between the public and private sectors, the future of electric mobility in South Africa looks bright.