SOUTH AFRICA
South Africa is positioning itself as a future leader in the electric vehicle (EV) market with a R964 million ($50.8 million) investment aimed at accelerating the adoption of clean transportation.
The initiative is part of a broader strategy to make the country a hub for New Energy Vehicles (NEVs), including both electric and hydrogen-powered cars.
The plan supports the New Energy Vehicles White Paper, which aims to shift the local car industry from primarily producing petrol and diesel vehicles to manufacturing electric ones by 2035.
Finance Minister Enoch Godongwana highlighted the economic and environmental significance of the investment in his recent budget speech.
Starting in March 2026, car manufacturers will be able to claim 150% of their qualifying investments in electric and hydrogen-powered vehicles, an incentive expected to attract local and international manufacturers.
This policy is anticipated to create jobs, stimulate the economy, and boost South Africa’s global competitiveness in the automotive industry.
The government’s commitment to clean energy is evident in prior actions, such as introducing a carbon tax for large polluters and securing a $8.5 billion Just Energy Transition Partnership with global partners.
These measures aim to reduce dependence on fossil fuels while fostering the growth of the EV industry in the country.
Despite these advancements, South Africa’s EV ambitions face challenges, particularly due to ongoing power shortages caused by outdated infrastructure at Eskom, the state-owned utility.
Blackouts have already impacted major players like Volkswagen, which scaled back operations citing unreliable power supply.
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For potential EV buyers, these power issues raise concerns about the practicality of owning an electric vehicle, as consistent access to charging infrastructure is critical.
The government is addressing these challenges by seeking international partnerships. Trade Minister Ebrahim Patel has engaged with Chinese automakers and battery manufacturers, including BYD, to attract investments in local EV production facilities.
These collaborations could not only enhance South Africa’s manufacturing sector but also provide the necessary infrastructure to support the country’s growing EV market.
Demand for electric vehicles is surging. Sales of electric and hybrid cars increased by nearly 83% in early 2024 compared to the previous year, signaling strong consumer interest in cleaner transportation options.
However, experts emphasize that building confidence among buyers will require a reliable power supply and the expansion of charging infrastructure.
While South Africa currently has over 450 publicly accessible EV charging stations, this number must grow significantly to keep pace with rising demand.
The government’s R964 million investment is aimed at tackling these issues head-on by supporting both manufacturing and the development of charging infrastructure.
Balancing these two priorities will be key to enabling the successful adoption of EVs while creating economic opportunities across the supply chain.
As South Africa accelerates its transition to clean transportation, this investment positions the country to become a leader in Africa’s EV market.
By addressing critical challenges like power shortages and scaling infrastructure, South Africa could serve as a model for other nations looking to embrace sustainable mobility.
The initiative is expected to benefit not only manufacturers and consumers but also the environment, marking a significant step toward a cleaner, more sustainable future for transportation.
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FAQ
1. What is the New Energy Vehicles White Paper?  
The New Energy Vehicles White Paper is South Africa’s policy framework aimed at transitioning the car industry from producing petrol and diesel vehicles to manufacturing electric and hydrogen-powered vehicles by 2035.
2. What incentives is South Africa offering to EV manufacturers?  
Starting in March 2026, car manufacturers can claim 150% of their qualifying investments in electric and hydrogen-powered vehicles. This policy is designed to attract local and international manufacturers.
3. How many EV charging stations are currently in South Africa?  
South Africa currently has over 450 publicly accessible EV charging stations. However, this number is expected to grow significantly to support the increasing demand for electric vehicles.
4. What are the major challenges facing South Africa’s EV industry?  
Primary challenges include power shortages caused by outdated infrastructure at Eskom and the need for a larger, more reliable network of EV charging stations to build consumer confidence.
5. How is South Africa partnering with global players to boost its EV market?  
South Africa is engaging with international automakers and battery producers, such as Chinese company BYD, to attract investments in local EV manufacturing and infrastructure development.