South Africa

Is South Africa ready for electric vehicles?


South Africa’s road map to an electric future has been made slightly clearer by government’s plans to incentivise Electric Vehicles (EV) manufacturers.

Finance Minister Enoch Godongwana laid down the blueprint during his 2024 Budget Speech on Wednesday.

“To encourage the production of electric vehicles in South Africa, government will introduce an investment allowance for new investments, beginning 1 March 2026,” Godongwana said.

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Electric transition

The incentive will enable producers to claim 150% of qualifying investment spending on electric and hydrogen-powered vehicles in the first year.

“It aims to transition the automotive industry from primarily producing internal combustion engine vehicles to a dual platform that includes electric vehicles,” Godongwana explained.

Government has also reprioritised R964 million over the medium term to support the transition to electric vehicles.

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‘It’s key to keep up’

Godongwana’s announcement follows suit to President Cyril Ramaphosa’s vision for an EV future.

“It is key that South Africa keeps up with other countries, including on the continent, that are incentivising the manufacture and uptake of electric vehicles as the world moves towards decarbonisation,” said Ramaphosa.

The incentive is in line with government’s goal to cut carbon emissions by transitioning to EVs by 2025.

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Load shedding

Unfortunately, SA’s ongoing energy crisis remains a sore point, causing many to wonder whether the country has enough electricity to sustain the transition.

Speaking to The Citizen, energy analyst Clyde Mallinson said the country’s electricity shortage was no sufficient reason to discourage the transition to EVs.

However, he explained that boosting electricity generation capacity was crucial, adding that renewable energy was the way to go.

“At this stage, the only sensible generation would be to invest in wind, solar and storage,” Mallinson said.

“The number of electric vehicles that are likely to come into SA in the next five years will probably be bought by people who’ll charge them from solar on their roofs anyway,” he added.

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‘Immense benefits’

Meanwhile, Nedbank Sector Lead of Automotive, Transport, Freight and Logistics, Thabang Mahlangu said the incentive would be worthwhile.

“The key benefits are immense; especially the positive effect on fiscal export earnings, job creation, skills development in new technologies, and consumer choice – which promotes sustainable mobility in the South African automotive sector.”

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