South African President, Cyril Ramaphosa, announced that he is considering the introduction of tax rebates or subsidies to encourage local manufacture of electric and hybrid vehicles on Thursday, 17 October 2024.
“Consideration must be given to incentives for manufacturers, as well as tax rebates or subsidies for consumers, to accelerate the uptake of electric vehicles,” he said.
Last year, the Minister of Trade, Industry, and Competition released a white paper detailing measures to facilitate the transition, including government incentives and a temporary reduction in import duties on batteries for vehicles manufactured and sold in the domestic market.
South Africa’s automotive sector, which generated over ZAR 271 billion in exports last year, currently relies heavily on shipments to the European Union. However, upcoming legislation in the EU is anticipated to gradually decrease demand for diesel and gasoline vehicles.
Although the government announced in February that automakers could claim a 150% tax deduction on investments in facilities for manufacturing electric vehicles, it has not been implemented as of yet.
