ELECTRIC VEHICLES Market Intelligence Report 2025

The South African EV market is in an early growth phase, with significant investment potential across four key sectors: passenger vehicles, public buses, freight and logistics, and last-mile delivery. While annual passenger EV sales have surpassed 1,000 units for the first time, the market is currently dominated by luxury models. Growth is supported by innovative financing like Electric-Vehicle-as-a-Service (EVaaS), rising fuel costs, and corporate ESG targets. However, adoption is hindered by high import duties, a lack of affordable models, and electricity grid constraints. The government is introducing manufacturing incentives in 2026 to stimulate local production.

• The South African EV market is divided into four primary investment sectors with projected growth by 2030: electric passenger vehicles (estimated at R13.9 billion for 21,900 vehicles), electric buses (R2.9 billion for 420 vehicles), electrification of freight and logistics (R1.18 billion for 828 vehicles), and electrification of last-mile delivery (R1.2 billion for 17,900 vehicles).
• Passenger EV adoption in South Africa is currently limited by affordability, as most vehicles are luxury purchases priced at R800,000 or higher, while the majority of internal combustion engine (ICE) vehicles are sold between R200,000 and R400,000. However, annual domestic sales of electric passenger vehicles recently exceeded 1,000 units for the first time.
• The electric bus sector is seeing increased activity, highlighted by Golden Arrow Bus Services (GABS) completing a procurement of 120 electric 65-seater buses and the City of Cape Town awarding a tender for 30 low floor electric BRT buses for the MyCiTi fleet.
• To mitigate high upfront costs, the Electric-Vehicle-as-a-Service (EVaaS) model is being used, particularly for two- and three-wheelers in last-mile delivery and for electric truck leasing via Volvo Trucks South Africa.
• The South African government is implementing financial support to encourage local EV production, including a manufacturing incentive starting in March 2026 that allows a 150% tax deduction for investments in battery electric and hydrogen-powered vehicle production assets.
• Significant barriers to EV scaling include high import duties (25%) and luxury goods tax (18%-30%) for vehicles over R600,000, as well as electricity supply constraints that will require grid upgrades for large-scale fleet charging at depots.
• Corporate ESG targets and international regulations, such as the EU's Carbon Border Adjustment Mechanism (CBAM) and the U.S. Inflation Reduction Act (IRA), are driving South African companies to transition to electric fleets to remain competitive in export markets.

APA

Terblanche, U., Magoda, N., Khoza, S., Radmore, J., Reddy, P., Pienaar, C., & Fordyce, N. (2025). ELECTRIC VEHICLES Market Intelligence Report 2025. GreenCape. https://greencape.co.za/wp-content/uploads/2025/04/Electric-vehicles-2025.pdf

Chicago

Terblanche, Ulrich, Nyawasedza Magoda, Sithobile Khoza, Jack Radmore, Prian Reddy, Cilnette Pienaar, and Nicholas Fordyce. ELECTRIC VEHICLES Market Intelligence Report 2025. GreenCape, 2025. https://greencape.co.za/wp-content/uploads/2025/04/Electric-vehicles-2025.pdf.

Wikipedia

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BibTeX

@techreport{terblanche2025electric, author = {Terblanche, Ulrich and Magoda, Nyawasedza and Khoza, Sithobile and Radmore, Jack and Reddy, Prian and Pienaar, Cilnette and Fordyce, Nicholas}, title = {{ELECTRIC VEHICLES Market Intelligence Report 2025}}, institution = {GreenCape}, year = {2025}, url = {https://greencape.co.za/wp-content/uploads/2025/04/Electric-vehicles-2025.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }