South Africa automotive and transport electrification

South Africa is implementing strategic shifts to transition its automotive and road transport sectors toward electrification and improved efficiency. To protect its manufacturing industry, which accounts for 23.8% of the country’s manufacturing output, the government has introduced a law providing a 150% tax deduction for investments in electric and hydrogen vehicle manufacturing. This initiative aims to secure the country’s role in the global electric vehicle (EV) supply chain and meet international emissions standards.

In the road transport sector, rising diesel and petrol prices are increasing pressure on the logistics industry. This volatility is prompting transporters to prioritize vehicle productivity, maintenance, and reliability to maximize payloads. The International Council on Clean Transportation (ICCT) notes that record fuel prices are strengthening the case for electric transport and cleaner technologies. Regulatory support is expected through the Clean Fuels Two (CF2) regulations, scheduled for July 2027, which will reduce sulphur content in petrol and diesel to improve air quality and align with national Green Transport Strategy goals.

Recent developments at South African Auto Week in Durban highlighted the growing variety of available EV models, including those from BMW, Mercedes-Benz, Toyota, BYD, and Geely. Trade, Industry and Competition Minister Parks Tau emphasized that the government seeks more than just vehicle assembly. Through the review of the Automotive Production and Development Programme 2, the state aims to strengthen local component manufacturing. The South African Automotive Masterplan targets 60% local content by 2035, focusing on battery production, electric drive units, and charging equipment, with specific emphasis on creating opportunities for black- and women-owned businesses.