Zero Carbon Charge (Charge) is calling for changes to electric vehicle (EV) taxation and funding for renewable charging infrastructure ahead of the Medium-Term Budget Policy Statement (MTBPS) on 21 October, arguing that vehicle affordability and charging access are key to expanding electric mobility in South Africa.
Source: Zero Carbon Charge
Government has introduced measures to support local EV production, including the incorporation of EVs and their components into Phase 2 of the Automotive Production and Development Programme (APDP). A 150% tax allowance for investment in new capacity to manufacture battery-electric or hydrogen-powered vehicles in South Africa also came into effect on 1 March 2026.
The company argues that taxes on imported EVs continue to affect affordability while domestic manufacturing capacity is being developed. It wants the MTBPS to provide clarity on EV taxation and support for renewable charging infrastructure.
At SA Auto Week on 13 October, Parks Tau, Minister of Trade, Industry and Competition, identified charging equipment as an emerging value chain offering opportunities for local investment and supplier development.
EV tax reform and affordability
Tau previously indicated that the review of the APDP and the South African Automotive Masterplan was expected to be completed by September 2026. Proposals under consideration included reviewing the ad valorem tax structure to differentiate between locally produced and imported vehicles. Implementation of approved amendments was anticipated in the fourth quarter of the 2026/27 financial year, subject to the necessary approvals, including National Treasury's concurrence.
In his latest SA Auto Week address, Tau reiterated the importance of the APDP2 review but did not provide a completion date or details of proposed tax changes.
The organisation is concerned that an ad valorem review focused on favouring local production could increase the tax burden on imported EVs while domestic manufacturing capacity is still being developed.
Imported EVs face customs duties under the South African Revenue Service (SARS) tariff schedule, with rates depending on classification and origin. Ad valorem excise duty and VAT can add further costs.
The company gives the example of an imported battery-electric passenger car with a customs value of R500,000, subject to the 25% general customs duty and no rebates. According to its figures, the vehicle would attract R125,000 in customs duty and R141,750 in ad valorem excise duty. Combined, these duties would add R266,750 before VAT and other applicable costs.
“The result is a disconnect: government is incentivising domestic EV production while the tax structure continues to constrain the consumer demand that future production will depend on,” said Roux.
Proposals for Budget 2027
The company wants the MTBPS to set out a policy direction on EV taxation and charging infrastructure, with measures to be taken forward in Budget 2027. Its proposals include:
• Restructuring EV customs duties and ad valorem tax so imported EVs are not taxed more heavily than comparable internal combustion engine (ICE) vehicles.
• Introducing targeted rebates or incentives for lower-priced EVs to narrow the upfront cost gap with ICE vehicles.
• Providing access to concessional, long-term finance through development finance institutions, reflecting the long payback periods for charging infrastructure.
• Allocating dedicated funding for renewable energy microgrids linked to charging stations to support local production of clean energy for transport.
Funding renewable charging infrastructure
The organisation also wants renewable charging infrastructure to form part of the government's broader industrial policy. It points to the 2023 EV White Paper, which recognises charging infrastructure as a foundational part of the transition and identifies off-grid solutions as a way to support EV adoption without adding pressure to the electricity grid.
“This is an opportunity to decarbonise transport while developing local energy infrastructure and strengthening energy security. Localising the production of energy for transport offers government an immediate industrial opportunity with lasting economic benefits. The opportunity extends beyond manufacturing vehicles to producing the renewable energy that powers them, using technology and expertise already being deployed in South Africa. Support for renewable charging should form part of the same industrial vision as support for EV manufacturing,” said Roux.
The company says its off-grid, solar-powered fast-charging site in Wolmaransstad accommodates passenger vehicles and electric trucks. It is also expanding along the N3 corridor, with a reported R100m investment from the Development Bank of Southern Africa (DBSA).
