Despite repeated government commitments to accelerate South Africa’s transition to new energy vehicles (NEVs), there has been very little tangible progress in terms of incentives and regulations, according to industry leaders.
Last year, at South African Auto Week, President Cyril Ramaphosa announced that government was working to finalise comprehensive NEV policy guidelines and that it would consider incentives for manufacturers as well as tax rebates or subsidies for consumers to accelerate the uptake of EVs.
One year later, there has not been much movement – a 150% tax rebate for EV and hydrogen vehicle production, signed into law in December 2024, comes into effect in March next year and a national critical minerals strategy, which is meant to help stimulate EV manufacturing in South Africa, was approved by cabinet in May this year. And in March, national treasury announced that South Africa will spend R1-billion to support the local production of NEVs and batteries.
Greg Cress, principal director for automotive and e-mobility at Accenture, told TechCentral that there have not yet been any formal updates or announcements from the department of trade, industry & competition, or other relevant government departments, regarding potential tax rebates or consumer incentives.
“As of October 2025, a year after the president’s initial announcement, details around the implementation of consumer incentives or subsidies for EVs in South Africa have not yet been made public,” he said.
Subsidies and consumer incentives are vital for South Africa’s EV sector because without them, costs stay high, adoption remains constrained and it is difficult for the industry to scale and compete with a rapidly globalised automotive market.
Both EV charging infrastructure company Rubicon and Zero Carbon Charge, currently the only off-grid developer of EV charging stations in South Africa, say there is plenty of government rhetoric instead of action on encouraging the migration to NEVs.
‘Mixed bag’
Rubicon CEO Greg Blandford told TechCentral that it’s a “mixed bag” when assessing government’s progress (or lack thereof) because most tax incentives are focused on the automotive manufacturing sector as opposed to the end consumer.
“That’s likely why there’s a perception that little has happened in the eye of the consumer. It would, however, be good to see aggressive incentives for consumers to adopt NEVs. The drivers for NEV adoption needs to be multifaceted, both to manufacturers and consumers,” he said.
Zero Carbon Charge co-founder Joubert Roux said he agrees that the government is moving too slowly.
Read: South Africa’s EV and subsidy rebate plan, and what it really means
“There are a lot of announcements made during relevant occasions, but no implementation or willingness to engage industry players other than national automotive bodies… There is also no leading body enabling and enforcing this urgency, and incumbents and protectionism are causing a failure to act by government.”
He warned that South Africa is ceding its leadership in Africa to Morocco, Kenya and Ethiopia.
Last week, at South African Auto Week 2025, EVs were again central to a speech by a senior politician, this time trade, industry & competition minister Parks Tau.
But Tau did not make any new announcements, and instead emphasised that South Africa’s future competitiveness in the automotive sector hinges on rapidly embracing NEVs. But for this to happen, industry players say government needs to adopt a multi-pronged approach.
Blandford said the lack of consumer incentives has meant that even with the potential for locally produced EVs in the future, they may still be unaffordable for many.
He said that in the short term, high import duties on EVs must be reduced, adding that there should be consumer incentives such as direct subsidies, tax rebates or exemptions from VAT for businesses for fleet vehicles.
The introduction of low-cost EVs, such as the new cheapest electric car in South Africa, BYD’s Dolphin Surf, will help drive demand, he said.
Roux said that if the country reduces taxes on EV imports to encourage uptake and supports charging infrastructure development, it can create opportunities for localisation.
“If we announce a tax holiday (for a period of five to six years), electric vehicles will immediately be cost competitive. EVs are already a very compelling proposition, and that will drive uptake. That is all that is required to encourage the private sector to create the necessary charging infrastructure and to localise manufacturing,” Roux said.
Cress, who attended this year’s Auto Week event, noted that it offered no concrete details about the future of South Africa’s EV sector.
Ad valorem duties
“The closest lever to being reviewed that may have an impact on reducing prices for EVs in the medium term is a review of the ad valorem tax sliding-scale brackets and a review of the 25% import duties on EVs, irrespective of their rules of origin,” he said.
“Should the ad valorem tax bracket for vehicles be adjusted, this could go a long way to reducing the prices for the sub-R750 000 EV segment.”
Cress said that on the opposite end, trade unions are becoming more vocal about the threat of de-industrialisation because of a sharp rise in the number of vehicles imported from India and China.
Read: EV shift critical to South Africa’s car manufacturing industry
“In my opinion, South Africa’s automotive industry finds itself in the precarious position of having to navigate a tightrope between the OEMs (original equipment manufacturers) planning their next NEV model productions for South African factories, the trade unions, and South Africa being a relevant destination for importers to consider bringing the latest high-tech vehicle products, of which the majority are NEVs.”
He said the private sector, driven largely by the Chinese, is the biggest contributor towards EV growth in the country, regardless of the level of government support.
Even with punitive duties attached to EV imports, Chinese manufacturers are still able to bring them into South Africa at competitive price points.
Additionally, charging station infrastructure providers such as GridCars, Rubicon and Zero Carbon Charge, continue their roll-out of new charging locations both in urban and rural areas.
“We are well on our way on the S-curve of growth, which will become exponential when EV sales are 5% of total new car sales per month; meaning we need to see an average of 2 000 or more EVs of the 40 000 new vehicles sold per month,” Cress said.
When asked about the private sector’s role amid government delays, Cress said OEMs like BYD, Chery and others are heavily invested in seeing an EV future succeed in South Africa.
“As such, they are positioning quality products at very competitive price points, often equivalent to their equivalent ICE (internal combustion engine) counterparts.
And additionally, they are bundling a lot of added value: free insurance for a year, home Wallbox chargers, cables, charge-card subscriptions, internet connectivity and other components,” he said.
“It remains to be seen how the public will respond over the medium term. However, all signs are pointing to an optimistic future: when South Africa gets affordable, quality, reliable EVs with guaranteed future values and resale values, coupled to a reliable electrical grid, the total cost of ownership numbers start making sense.” —© 2024 NewsCentral Media
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