South Africa’s carbon reduction targets need to be put into motion with improved support for the uptake of electric vehicles (EVs), says Zero Carbon Charge (Charge).
The organisation, which specialises in off-grid charging stations, has urged Finance Minister Enoch Godongwana to provide some direction on EV incentives during his upcoming Budget Speech.
Joubert Roux, Executive Chairman of Charge, argues that a six-year import tax holiday for EVs would allow battery cars to gain traction in the market while also giving carmakers the necessary time to transition without jeopardising the industry.
“If a tax holiday is not feasible, then the import tax on EVs should at least be equal to - or lower than - that of internal combustion engine (ICE) vehicles,” Roux said.
“Currently, an EV is taxed at 25%, while an ICE vehicle is taxed at 18%. It makes no sense to advocate for decarbonisation while carbon-heavy vehicles remain cheaper than zero-emission EVs,” he added.
At the Auto Week event held in Cape Town in October 2024, President Cyril Ramaphosa announced that the government is considering tax rebates or subsidies that would encourage consumers to buy EVs. However, exact details of how this would work have yet to be announced.
The government has already legislated a 150% tax incentive aimed at encouraging car manufacturers to build EVs in South Africa - this as the country’s primary export market, Europe, moves to ban the sale of new internal combustion engined vehicles from 2035.
Roux also argues that off-grid charging infrastructure needs to be prioritised, as an EV charged from Eskom’s predominantly coal-powered grid indirectly emits 5.8 tonnes of CO2 per year versus 4.4 tonnes for an average petrol engined vehicle.
“The transition to EVs will only truly be low-carbon once charging infrastructure has shifted materially to renewable energy sources…The implication is that the use of renewable energy-based systems to power charging stations is important for allaying prospective consumers’ concerns related to grid power supply and availing a truly low carbon transition,” Roux added.
IOL