Let’s Produce Electric Vehicles Locally for an Even Greener Future

The government of South Africa is offering a tax incentive for carmakers to produce electric vehicles (EVs) locally, with hybrid cars soon to be included. Thus, the government is further encouraging the population’s transition to greener vehicles.

“This will allow producers to claim 150% of qualifying investment spending on electric and hydrogen-powered vehicles within the first year,” explains Finance Minister Enoch Godongwana. “The incentive will be implemented in addition to the existing support under the Automotive Production Development Programme.”

Multinational carmakers are committed to continuing to produce in South Africa. Still, it could take a year or so for EV production to start since the production line needs to be recalibrated, and personnel require additional training. To that effect, $50,8 million will be reallocated over the next three years to support the transition to EVs. EVs are increasingly popular in the country, with 931 new fully-electric Toyota vehicles sold in 2023 – 85% more than 502 units in 2022 and surpassing 119 units in all the fully electric models sold in South Africa between 2020 and 2023. For carmakers like Volkswagen, Toyota, Lexus, BMW, and Mercedes-Benz, it is crucial to prioritize countries with EV policies.