South African car buyers could soon receive subsidies for purchasing electric and hybrid vehicles.

Speaking at the SA Auto Week, hosted by Naamsa - The Automotive Business Council - in Cape Town on Thursday, President Cyril Ramaphosa said that the global transition towards decarbonisation posed a fundamental challenge to the automotive industry, but also an immense opportunity.

Ramaphosa said the government was working to finalise comprehensive New Energy Vehicle (NEV) policy guidelines that also included hybrids and plug-in hybrids.

Although the President did not divulge specific details on the incentives that would be offered, he said the country was considering incentives for manufacturers to produce NEVs locally as well as tax rebates or subsidies that encourage consumers to buy electric vehicles.

“This is not just about creating a greener future but also about ensuring South Africa remains competitive in the global market,” Ramaphosa said.

This indicates a potential shift from the government’s earlier position, as seen in the EV White Paper released in December 2023. This stipulated that the country would initially focus on securing manufacturing and export contracts for local OEMs, while incentivising local consumers to purchase EVs would take place further down the line when “phase two” kicked in. South Africa was plagued by load-shedding at the time.

“We are committed to working hand-in-hand with the private sector to promote the production of New Energy Vehicles and the development of the necessary infrastructure to support them,” Ramaphosa said at SA Auto Week.

He said the government also remained committed to improving the operational performance of the country’s energy, freight and logistics sectors, all of which directly impact the automotive industry.

Securing the country’s future as a manufacturer of new energy vehicles is vital as the auto sector currently accounts for around 15 percent of South Africa’s total exports.

IOL