South Africa cannot incentivise electric vehicle production on one hand and penalise EV adoption on the other.
This is the message from Zero Carbon Charge (Charge), which called on finance minister Enoch Godongwana to align import duties on EVs with those applied to internal combustion engine (ICE) vehicles in his budget speech on Wednesday.
The company, which is installing a national network of off-grid, solar-powered charging stations in the country, asked for the government to scrap ad valorem tax on EVs and allocate dedicated funding to roll out solar-powered EV charging infrastructure nationwide.
The automotive industry has welcomed the government’s 150% tax deduction for investment in electric and hydrogen-powered vehicle production. The incentive is aimed at keeping South Africa aligned with global value chains, particularly as nearly 60% of locally produced light vehicles are exported to the EU and UK — markets that are moving to phase out ICE vehicles within the next decade.
However, the local industry believes that supporting the affordability and attractiveness of EVs for the South African public was crucial too.
Demand for EVs is growing slowly in South Africa, with high prices and a limited charging network among the key issues.
Imported EVs are subject to a 25% import duty, significantly higher than the 18% applied to internal combustion engine vehicles from the EU.
“Without urgent tax reform and infrastructure funding, South Africa risks constraining domestic EV demand at precisely the moment it is trying to attract EV investment,” said Charge chair Joubert Roux.
“South Africa cannot tax clean mobility as a luxury while claiming to prioritise decarbonisation and industrial growth, nor can it expect EV adoption to accelerate without funding the infrastructure that makes ownership practical.”
While Charge supports the 150% manufacturing incentive, Roux says it will not deliver scale if high upfront vehicle costs and limited charging infrastructure continue to suppress demand.
Sales of new energy vehicles (NEVs) — which includes EVs, hybrids and plug-in hybrids — comprised only 2.8% of South Africa’s total new-car market in 2025, though the number grew by 7.1% to 16,716 units compared to the 15,611 units in 2024.
“Demand is growing,” Roux said. “But it will stall if drivers don’t see charging stations where they need them. Without a visible, reliable network, especially along major highways and freight corridors, consumers will lack the confidence to buy EVs.”
He said the National Treasury must now move beyond policy intent and fund charging infrastructure, as envisaged in the 2023 EV white paper.
The policy recognises charging infrastructure as a foundational pillar of South Africa’s EV transition, committing the government to enable large-scale rollout, remove regulatory bottlenecks and crowd in private investment. It also acknowledges that off-grid charging solutions can support EV adoption without adding pressure to an already constrained electricity system.
“Charging infrastructure requires significant upfront capital and long payback periods,” Roux said. “Government doesn’t need to build the network, but it must create the conditions for the private sector to scale it.”
There is ongoing pressure from the local automotive industry for the 2026 budget to align EV import duties with ICE vehicles to stimulate EV sales by making them more affordable, as has happened in other countries.
Speaking at Toyota South Africa’s state of the motor industry conference in Joburg, CEO Andrew Kirby cautioned against raising protectionist duties on full imports, arguing this would have wider economic consequences. Instead, he called for adjustments to tax and rebate systems to help grow locally produced volumes.
Currently, the average tax burden on a new vehicle in South Africa is about R120,000, including VAT, ad valorem tax, carbon tax and a tyre levy.
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