10/01/2025

South Africa powers ahead with $27bn electric vehicle incentive plan.

South Africa has taken a major step into the future of green mobility by officially enacting a groundbreaking 150% tax incentive for electric and hydrogen vehicle production. The legislation, signed into law on 3 January 2025, is expected to stimulate the country's nascent electric vehicle (EV) industry, potentially unlocking $27bn in investments. The ambitious tax incentive programme aims to position South Africa as a key regional player in the global shift toward sustainable transport. Targeting both local and international manufacturers, the initiative is designed to attract heavyweights in the EV and hydrogen fuel cell sectors, with Chinese companies already eyeing opportunities in the market. The government’s strategy is clear: drive job creation, boost exports, and reduce dependency on fossil fuels, while aligning with international climate goals. The new incentive offers manufacturers significant tax breaks on research, development and production costs. By doing so, South Africa hopes to accelerate the domestic production of EVs and hydrogen-powered vehicles, as well as the components needed for their assembly. With a strategic location, access to raw materials, and a skilled workforce, the country has ambitions to become a major hub for green mobility innovation. Analysts predict the incentive could lead to a surge in investments, particularly from China, which dominates the EV supply chain. “This initiative places South Africa on the map as a competitive destination for green technology production”, said a government spokesperson. As the global race to electrify intensifies, South Africa’s policy move signals its readiness to embrace a cleaner, more sustainable future while tapping into one of the world’s fastest-growing industries.