Industry Body Warns EV Tax Structure Undermines Clean Mobility Goals

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The organisation argues that South Africa cannot position clean mobility as a policy priority while maintaining higher import duties on EVs than on internal combustion engine vehicles and applying ad valorem tax. It says the current tax framework risks constraining local demand just as the government seeks to attract EV manufacturing investment.

The call comes despite the government’s confirmation that a 150% manufacturing tax incentive for electric and hydrogen-powered vehicles will take effect from 1 March 2026. Charge maintains that production incentives will have a limited impact if adoption remains dampened by pricing barriers and inadequate charging infrastructure.

According to Naamsa, hybrid and electric passenger vehicle sales increased 8.1% year-on-year in the first 10 months of 2025 to 13,358 units, following triple-digit growth in 2024. Market share reached 3.8%, excluding one major EV manufacturer that does not report sales data.

Charge says visible and reliable charging infrastructure along major highways and freight corridors is critical to sustaining growth. It has urged the National Treasury to accelerate the implementation of the 2023 EV White Paper by formally recognising off-grid charging stations as both energy and transport infrastructure.

The group is advocating clearer tax treatment for EV charging infrastructure, accelerated depreciation for charging equipment and battery storage, access to concessional long-term finance through development finance institutions, and targeted co-funding mechanisms to improve project viability. It also wants dedicated funding for renewable microgrids linked to charging sites to avoid adding pressure to the national grid.

Charge’s off-grid, solar-powered charging site in Wolmaransstad is already operational, and its planned N3 corridor expansion is backed by R100m from the Development Bank of Southern Africa. The project aims to enable electric mobility along one of the country’s busiest freight routes.

The organisation says fiscal reform and infrastructure rollout must move in tandem if South Africa is to compete in a rapidly electrifying global economy.