VW, Isuzu keen on fuel-powered vehicles despite South Africa's EV push
TLDR
- South Africa offers tax breaks for electric vehicle (EV) production, but major car manufacturers like Volkswagen and Isuzu do not plan to manufacture EVs or hybrids in the country.
- The government aims to boost the country's EV and hydrogen industries with tax incentives, but Volkswagen and Isuzu will continue focusing on internal combustion engine vehicles in South Africa.
- Despite tax incentives for EV production, Volkswagen and Isuzu in South Africa prioritize internal combustion engine vehicles over electric or hybrid cars.
Despite generous tax breaks introduced by South Africa earlier this year to incentivize the production of electric vehicles (EVs), major car manufacturers Volkswagen and Isuzu Motors do not have immediate plans to manufacture electric or hybrid cars in the country.
South Africa announced in February that companies investing in EV production would qualify for a 150% tax deduction on these investments starting in 2026. The goal is to attract EV manufacturing and bolster the country's relatively small and underdeveloped EV and hydrogen industries.
However, as reported by Bloomberg, Volkswagen and Isuzu intend to maintain their focus on vehicles with internal combustion engines in South Africa, according to the regional heads of the two auto manufacturers.
Key Takeaways
South Africa's market for new-energy vehicles (NEVs) is on the rise, albeit from a small base, with sales increasing by 65% last year. However, the overall number of NEVs sold, including hybrids and EVs, was just 7,693 units, accounting for only 1.45% of all new cars sold in the country in 2023. Despite this growth, major car manufacturers like Volkswagen and Isuzu do not currently have plans for EV or hybrid vehicle manufacturing in South Africa. However, another major player, Stellantis, is considering expanding its production into NEVs. The decision hinges on the emergence of a viable market for these vehicles in South Africa, according to Mike Whitfield, the managing director of Stellantis's South African unit, in an interview with Bloomberg last week.
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