Ahead of tomorrow’s Budget Speech, energy and mobility infrastructure company Zero Carbon Charge has called on finance minister Enoch Godongwana to overhaul South Africa’s electric vehicle (EV) tax regime and commit dedicated funding to off-grid charging infrastructure.
The organisation argues that import duties on EVs should be aligned with those applied to internal combustion engine (ICE) vehicles, the ad valorem (luxury) tax on EVs should be scrapped, and Treasury should allocate funding to accelerate the nationwide rollout of solar-powered, off-grid charging stations.
Electric vehicles imported into SA are subject to a25% import duty on the customs value, while ICE vehicles benefit from a lower 18% import duty when imported from the European Union and the UK under trade agreements − effectively making some petrol/diesel cars cheaper to import than EVs.
While Zero Carbon Charge welcomes the 150% manufacturing tax incentive for electric and hydrogen-powered vehicles from 1 March 2026 − announced by president Cyril Ramaphosa in his State of the Nation Address − the firm says the incentive alone will not unlock scale if EVs continue to face higher import duties and additional ad valorem tax.
According to the firm, SA cannot tax clean mobility as a luxury, while claiming to prioritise decarbonisation and industrial growth, nor can it expect EV adoption to accelerate without funding the infrastructure that makes ownership practical.
“You cannot incentivise EV production on one hand and penalise EV adoption on the other,” says Joubert Roux, co-founder and chairperson of Charge. “Without urgent tax reform and infrastructure funding, South Africa risks constraining domestic EV demand at precisely the moment it is trying to attract EV investment.”
Charge argues that the 25% tariff plus luxury taxes and VAT can inflate the final retail price of imported EVs, making them disproportionately pricey compared with the same cars in other markets, or even compared with petrol/diesel models.
Many EVs in SA are imported from regions without a preferential trade agreement (China, for example), so they do not benefit from the reduced 18% duty that applies between SA and the EU/UK.
Mozambique removed its EV import duty entirely in 2025, eliminating the traditional 20% tariff and greatly reducing cost for imports. Malawi eliminated EV import duty and drastically cut VAT and excise to make EVs cheaper. Norway does not charge any import duty on EVs.
These countries have deliberately tweaked their policies to make EVs more affordable and encourage nationwide adoption.
According to the National Association of Automobile Manufacturers of South Africa (NAAMSA), hybrid and electric passenger vehicle sales rose 8.1% year-on-year in the first 10 months of 2025, reaching 13 358 units, after a 105% surge in 2024.
Market share now stands at 3.8%, excluding one major EV manufacturer that does not report to NAAMSA.
“Demand is growing,” Roux adds. “But it will stall if drivers don’t see charging stations where they need them. Without a visible, reliable network, especially along major highways and freight corridors, consumers will lack the confidence to buy EVs.”
NAAMSA has for years been actively calling on the South African government to introduce comprehensive incentives for EVs, to secure the future of the local automotive industry.
Charge says the EV charging network will largely be built by the private sector − but only if the financial framework makes projects bankable.
Charge proposes that the 2026 Budget provide:
- Clear tax treatment for EV charging infrastructure, including VAT certainty on electricity sold through charging stations and confirmation that charging and battery storage assets qualify for existing renewable energy tax incentives.
- Accelerated write-offs for charging equipment and battery storage to reduce upfront capital costs.
- Access to concessional, long-term finance through development finance institutions, recognising the long payback periods of infrastructure investments.
- Targeted co-funding or performance-based incentives, such as capital grants or support linked to electricity dispensed, to de-risk early-stage rollout.
- Dedicated funding for renewable energy microgrids linked to charging stations, enabling off-grid, solar-powered systems that add clean generation capacity without increasing pressure on the national grid.
“Charging infrastructure requires significant upfront capital and long payback periods,” Roux continues. “Government doesn’t need to build the network, but it must create the conditions for the private sector to scale it.”
Several countries around the world are actively supporting EV charging infrastructure through direct funding, grants, or incentivesto accelerate electric vehicle adoption. These include the US, the EU, China, the UK and Norway.
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