South Africa Offers 150% Tax Break to Secure EV Production

South Africa is trying to attract electric- and hydrogen-vehicle manufacturing as automakers choose where to build future models and key export markets tighten emissions standards. A new 150% tax deduction for qualifying production investments takes effect in March 2026, but industry leaders say it may not be enough to prevent investment shifting to Asian and South American rivals. They cite unreliable electricity, limited charging infrastructure and consumer demand, policy uncertainty, and export competitiveness as other decisive factors. The stakes are high: vehicles account for a major share of manufacturing, and about two-thirds of locally produced vehicles are exported, mostly to the EU and UK. The country’s new-energy vehicle market remains small, adding to concern that South Africa could lose future production allocations if it cannot secure a place in global EV supply chains.