South Africa will start building electric vehicles in 2026

South Africa’s automotive industry is poised to introduce its inaugural electric vehicle (EV) in 2026, aligning with the nation’s Just Energy Transition (JET) plan for a low-carbon and climate-resilient economy, as announced by Trade Minister Ebrahim Patel on Monday. The electrification of transportation stands as a key pillar in the JET plan, estimating a required investment of R128 billion from 2023 to 2027 for the transport sector to significantly contribute to South Africa’s decarbonization objectives.

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South Africa holds the distinction of being the largest automotive manufacturing hub on the African continent, hosting renowned global brands like Toyota, Isuzu, Volkswagen, Ford, and Mercedes-Benz. The industry is intricately woven into the global supply chain, importing components from various countries and exporting the final products to over 150 nations.

Minister Patel revealed that discussions with automakers indicated the likelihood of the first batch of EVs being produced by 2026. While hybrids are already in production, the initial EV production is anticipated to be limited, with accelerated growth expected between 2026 and 2030. Patel refrained from disclosing specific manufacturers moving into battery electric vehicle production post-2030.

The government’s comprehensive 68-page EV plan outlines strategic steps to facilitate this transition, encompassing incentives, a temporary reduction in import duties for domestically produced and sold vehicles containing batteries, and the promotion of green hydrogen production as a sustainable fuel source. Additionally, network industries such as freight rail and ports will undergo reforms, and energy reforms will be implemented.

Acknowledging challenges, the plan recognizes the country’s power crisis, with state-power utility Eskom facing difficulties in ensuring a stable electricity supply. The plan emphasizes the profound impact of effective bans on carbon-emitting vehicles in major markets, such as the EU and the UK, which collectively absorb nearly half of South African motor industry production. The South African automotive sector, boasting global brands and extensive international integration, is positioned at the forefront of steering the nation’s transition toward greener transportation.