Govt optimistic that tax breaks will kickstart electric car industry

South Africa expects efforts to boost its electric vehicle manufacturing to yield swift results, as manufactures start to take advantage of tax incentives from early 2026.

South Africa, in an effort to preserve a key export industry, last month announced a 150% tax deduction on investments in the local production of electric and hydrogen-powered vehicles from March 2026. Patel said the long lead time was designed to give South African carmakers enough time to prepare production facilities and win support from their parent companies.

The tax break is key for South Africa, which despite its natural advantages, has done little to develop an EV industry in the country.

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