Ramaphosa Signs 150% Tax Break for EV Production

President Cyril Ramaphosa signed into law a 150% tax deduction for investments in buildings, machinery, and equipment used to produce electric and hydrogen-powered vehicles. Effective March 2026, the measure seeks to secure South Africa's position in global electric vehicle supply chains as the country faces increasing competition from Asian markets.

The legislation follows a period of decline in local manufacturing, highlighted by Nissan's exit from the country and Toyota's decision to base electric Hilux production in Thailand. While automotive executives view the tax break as a positive first step, they argue that financial incentives alone cannot offset systemic failures.

Industry leaders, including representatives from Ford Motor Company of Southern Africa and Isuzu Motors South Africa, identified unreliable electricity supply, inadequate charging infrastructure, and high luxury taxes on imports as critical barriers to adoption. Automakers are now urging the government to finalize the review of the APDP2 manufacturing incentive programme to provide the long-term policy certainty required for large-scale investment.