The Electric Vehicle Production Incentive will be introduced by the Department of Trade, Industry and Competition. This comes with recent calls from the motor industry that government needs to firm up its electric vehicle industry policies. This is so that South Africa’s vehicle manufacturing sector, the largest manufacturing sector in the country, is not left behind as the world progresses to electric vehicle (EV) production. The electrification of transport is central to South Africa’s Just Energy Transition plan for a low-carbon and climate-resilient economy. The incentive would apply along with the other existing industrial incentives available to the local auto manufacturing industry. This includes the Automotive Production Development Programme.
As it stands, South Africa is positioned as the foremost automotive manufacturing hub on the African continent, boasting the presence of renowned global brands including Isuzu, Mercedes, Toyota, and Volkswagen, among others. The Incentive, will assist the motoring sector to invest in hydrogen-powered and electric vehicles, encouraging local electric vehicle production. The focus on new energy vehicles comes as automotive manufacturers accelerate the push towards electric vehicles, in an effort to move away from combustion-based vehicles. EVs are designed to be more environmentally-friendly and energy-efficient, reducing greenhouse gas emissions and dependence on non-renewable resources.
The incentive will assist local vehicle manufacturers to adjust their plants and technologies for EV production, in line with the global introduction of these vehicles. This will also preserve South Africa’s seat as a global exporter of automobiles.
Manufacturers of electric and hydrogen vehicles will be able to claim 150% of qualifying investment spending on production capacity for electric and hydrogen-powered vehicles in the first year of investment. The new incentive will take effect from March 2026…electrifying the auto manufacturing industry.
Dream Team Capital can assist with the development of a fully conforming application and provide access to the Grant Incentive.
For queries on the Electric Vehicle Production Incentive – Contact Dream Team Capital