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At an automotive conference in Cape Town, President Cyril Ramaphosa outlined government initiatives to increase local production of electric and hybrid vehicles. He proposed potential incentives, including tax rebates and subsidies, to encourage the adoption of these environmentally friendly options. “This effort is about creating a sustainable future and ensuring South Africa's global competitiveness,” Ramaphosa remarked. “As our key trading partners rapidly embrace electric vehicles, South Africa must integrate into the global supply chain to stay relevant.”

Challenges Facing South Africa’s Automotive Industry

The automotive sector, which brought in over 271 billion rand in exports last year, is largely dependent on the European Union market. However, upcoming EU regulations are expected to lower demand for traditional gasoline and diesel vehicles. Earlier this year, the South African government introduced a policy offering a 150% tax deduction for investments in electric vehicle manufacturing, though details are still being finalized.

Industry leaders, however, are concerned about limited efforts to develop a domestic market for electric vehicles. South Africa currently lacks sufficient electric charging infrastructure, and a 25% import tax on electric vehicles further challenges affordability—whereas traditional vehicles face no such levy.

Progressing Toward a Sustainable Future

Ramaphosa’s spokesperson, Vincent Magwenya, mentioned that details of the proposed incentives are still in progress. “We recognize the need to expedite these plans, particularly around charging infrastructure, where private sector collaboration will be key,” he said.

As South Africa considers a transition to electric vehicles, some experts urge a gradual shift. Peter van Binsbergen, CEO of BMW South Africa, calls for an inclusive approach that supports both hybrid and electric vehicles. According to Business Day, van Binsbergen and other executives recommend incorporating hybrid vehicles into government policy, especially given a recent decline in demand for fully electric vehicles in Europe.

While momentum for a greener automotive sector in South Africa is building, effective policies and infrastructure development will be crucial to supporting the growth of electric and hybrid vehicles in the coming years.