Electric Vehicles

The 2024 GreenCape report identifies significant investment opportunities in South Africa's electric vehicle (EV) sector, particularly in the local manufacturing of private passenger vehicles (estimated at R620 billion annually) and the electrification of freight, public transport, and last-mile delivery. While rising fuel prices and global supply chain diversification (the 'China Plus One Strategy') drive adoption, the transition is hindered by high upfront CAPEX, limited charging infrastructure, and energy security concerns related to loadshedding. The South African government is supporting the transition through the Electric Vehicle White Paper and a 150% investment allowance for qualifying EV and hydrogen-powered vehicle spending starting in 2026.

• The South African government is implementing financial incentives to support local EV production, including an investment allowance starting 1 March 2026 that allows producers to claim 150% of qualifying investment spending on electric and hydrogen-powered vehicles in the first year. Additionally, R964 million has been reprioritized over the medium-term to support the EV transition.
• Local manufacturing of electric private passenger vehicles represents the largest market opportunity in South Africa, with an estimated 2024 market size of 620,000 vehicles valued at R620 billion, projected to grow to 665,000 vehicles valued at R665 billion by 2030. This target is based on achieving 1% of annual global automotive manufacturing output.
• The electrification of freight and logistics shows a strong business case for Light Delivery Vehicles (LDVs) with an average annual mileage of 25,000 km or more, and for heavy-duty trucks with a minimum annual mileage of 85,000 km per year, as these thresholds make combined CAPEX and operational costs lower than internal combustion engine (ICE) alternatives over ten years.
• Electric micro-mobility for last-mile delivery is identified as the sector with the highest ease of market entry. The annual market size is estimated at 50,000 vehicles, with values ranging from R2 billion for electric bicycles to R7.5 billion for electric three-wheelers.
• The electrification of public transportation includes an annual market size of 900 electric buses (valued at R6.3 billion) and 2,400 electric minibuses (valued at R3.6 billion). A significant barrier is the high CAPEX, with electric buses costing two to three times more than diesel buses.
• South Africa's automotive manufacturing sector is positioned to benefit from the 'China Plus One Strategy,' as global OEMs seek to diversify supply chains away from Asia to mitigate risks such as production delays, IP theft, and US-China trade tariffs.
• Energy security, specifically 'loadshedding' (controlled demand reduction by Eskom), is a critical barrier across all EV sectors. In public transport, operators have responded by investing in rooftop solar photovoltaic (PV) and solar carports to ensure charging capability.
• South Africa possesses a competitive advantage in EV manufacturing due to its average real wage index, which is lower than that of China, Turkey, India, the Russian Federation, and Indonesia, and only higher than Saudi Arabia, Brazil, and Mexico among G20 emerging markets.
• Duty-free market access provided by the African Growth and Opportunity Act (AGOA) to the USA, along with agreements with the UK, EU, and the African Continental Free Trade Area (AfCFTA), serves as a major driver for local EV manufacturing for export.

APA

Reddy, P., & Radmore, J. (2024). Electric Vehicles. GreenCape. https://greencape.co.za/wp-content/uploads/2024/08/Electric-Vehicles-digital.pdf

Chicago

Reddy, Prian, and Jack Radmore. Electric Vehicles. GreenCape, 2024. https://greencape.co.za/wp-content/uploads/2024/08/Electric-Vehicles-digital.pdf.

Wikipedia

{{cite report |last1=Reddy |first1=Prian |last2=Radmore |first2=Jack |title=Electric Vehicles |publisher=GreenCape |date=2024 |url=https://greencape.co.za/wp-content/uploads/2024/08/Electric-Vehicles-digital.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{reddy2024electric, author = {Reddy, Prian and Radmore, Jack}, title = {{Electric Vehicles}}, institution = {GreenCape}, year = {2024}, url = {https://greencape.co.za/wp-content/uploads/2024/08/Electric-Vehicles-digital.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }