Jan 6, 2025
South Africa aims to draw in Chinese companies to its $27 billion electric vehicle sector.
South Africa's newly introduced tax incentives for electric vehicle production have attracted the interest of three Chinese EV manufacturers looking to invest in clean energy vehicles in the country, according to an official from the local automotive association speaking to Bloomberg.
Three Chinese car manufacturers have already signed non-disclosure agreements with the South African Automotive Business Council, as reported by its CEO Mikel Mabasa during an interview published on Friday.
Mabasa did not provide details on the identities of these automakers.
Currently, South Africa offers up to a 150% tax deduction for investments in the production of electric and hydrogen-powered vehicles.
Chinese electric vehicles are now in competition with the South African manufacturing operations of global firms like Toyota and Volkswagen AG.
Despite the proposed significant tax incentives that have been in preparation for several months, no Western manufacturer has yet announced plans for new investments in electric vehicles or other zero-emission vehicles.
Earlier this year, both Volkswagen and Isuzu Motors indicated they do not have immediate intentions to produce electric or hybrid vehicles in South Africa, even with the attractive tax incentives available in the country.
Starting in 2026, South Africa has announced that companies investing in electric vehicle production would be eligible for a 150% tax deduction on their investments. The objective is to attract electric vehicle manufacturing and promote the EV and hydrogen sectors, which are still quite small and underdeveloped.
However, Volkswagen and Isuzu intend to continue focusing on vehicles with internal combustion engines in South Africa, as stated by their respective regional heads in an interview with Bloomberg.
On the other hand, Stellantis is considering the expansion of its South African production to include new-energy vehicles (NEVs), which encompass electric vehicles, plug-in hybrids, and traditional hybrids.
The decision by Stellantis will depend on the emergence of a market for these vehicles in South Africa, as indicated by Mike Whitfield, the managing director of the company’s South African division, in a June interview with Bloomberg.
Three Chinese car manufacturers have already signed non-disclosure agreements with the South African Automotive Business Council, as reported by its CEO Mikel Mabasa during an interview published on Friday.
Mabasa did not provide details on the identities of these automakers.
Currently, South Africa offers up to a 150% tax deduction for investments in the production of electric and hydrogen-powered vehicles.
Chinese electric vehicles are now in competition with the South African manufacturing operations of global firms like Toyota and Volkswagen AG.
Despite the proposed significant tax incentives that have been in preparation for several months, no Western manufacturer has yet announced plans for new investments in electric vehicles or other zero-emission vehicles.
Earlier this year, both Volkswagen and Isuzu Motors indicated they do not have immediate intentions to produce electric or hybrid vehicles in South Africa, even with the attractive tax incentives available in the country.
Starting in 2026, South Africa has announced that companies investing in electric vehicle production would be eligible for a 150% tax deduction on their investments. The objective is to attract electric vehicle manufacturing and promote the EV and hydrogen sectors, which are still quite small and underdeveloped.
However, Volkswagen and Isuzu intend to continue focusing on vehicles with internal combustion engines in South Africa, as stated by their respective regional heads in an interview with Bloomberg.
On the other hand, Stellantis is considering the expansion of its South African production to include new-energy vehicles (NEVs), which encompass electric vehicles, plug-in hybrids, and traditional hybrids.
The decision by Stellantis will depend on the emergence of a market for these vehicles in South Africa, as indicated by Mike Whitfield, the managing director of the company’s South African division, in a June interview with Bloomberg.