Elon Musk has given the first insight into why Tesla hasn’t launched its range of electric vehicles in South Africa.
The South African-born Musk, who went to school in Johannesburg and Pretoria, posted on his social media platform X at the weekend: “Import duties are super high in South Africa to protect the domestic industry. Doesn’t make sense for Tesla, given that electric cars are not locally made.”
Musk posted the comment in reply to South African X user Ziyaad Mohomed, who asked him a question about when Tesla cars will be available in the country.
The world’s richest man doesn’t often offer comment on South Africa, but when he does – such as the time when he urged President Cyril Ramaphosa to act against Economic Freedom Fighers leader Julius Malema over the singing of the controversial Kill the Boer song at an EFF rally – it is always keenly followed.
“They are openly pushing for genocide of white people in SA. Cyril Ramaphosa, why do you say nothing?” he asked in a post that may have been aimed more at cementing Musk’s credentials with US conservatives.
Musk’s remarks about Tesla in South Africa come not long after trade, industry & competition minister Ebrahim Patel said in December that South Africa could start exporting electric vehicles manufactured locally by 2026.
Government’s white paper of November 2023 stated that the motoring industry aimed to “introduce a dual platform that includes EVs in the production and consumption mix, alongside ICE (internal combustion engine) vehicles in South Africa by 2035”.
Domestic production
Patel wrote: “Central to our approach is the primacy of domestic production of EVs. We view this as the cornerstone of the transition, fortified by tailored market development interventions”; but he said reducing customs duties – for years a major bugbear of the industry – at this stage was unlikely to affect the local production of EVs for export.
Import duties are super high in South Africa to protect the domestic industry.
Doesn’t make sense for Tesla, given that electric cars are not locally made.
— Elon Musk (@elonmusk) January 20, 2024
The local motoring industry has been lobbying government for years to cut the import duties on EVs, which are significantly higher than for vehicles with internal combustion engines. Governments in many other markets have moved to incentivise the sale of EVs, but in South Africa the opposite is true. A 25% import tax is still levied on electric vehicles compared to the 18% duty levied on imported cars using internal combustion engines.
Patel said government was looking at supporting the construction of “phase-1 production facilities in South Africa” rather than providing tax incentives to consumers to buy EVs. For the policy to be successful, Patel said funding would be critical, with private capital and industry supporting government to finance it.
Further details of measures to support EV production will be provided by the minister of finance in the 2024 budget speech in February. So, once again, it seems there are many plans afoot, but not much concrete action.
And now Musk’s post on X suggests South Africans hankering for a Tesla may have to wait a lot longer. – © 2024 NewsCentral Media