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Proposed road tax changes for South Africa

The opposition Democratic Alliance has called for accelerated action on proposals in the government’s Automotive Green Paper which it says will help with the rollout of electric vehicles in South Africa.

The DA has also called for the elimination of all import duties on electric vehicles (EVs) into the country, which will allow motorists to buy inexpensive EVs amid rising gasoline prices, it said. Electric vehicles currently face import duties of 25% compared to the 18% paid for conventional internal combustion engine (ICE) vehicles.

“It makes absolutely no sense for import tariffs to be imposed on EVs other than to protect major manufacturers in South Africa who refuse to switch to EVs and hybrids, and to keep South Africans on petrol and diesel to keep collecting fuel taxes,” they said the prosecutors Dean Macpherson.

“While many countries offer cash incentives against EV purchases, the least we could do in South Africa is to reduce the cost of EVs to consumers by a massive 25%. This would be a monetary incentive that would be manageable by the government.”

Macpherson warned that the South African car industry risks being left behind by the rest of the world if it cannot switch to electric vehicles before 2030. If it doesn’t meet that deadline, it will lose most of its access to the manufacturing market in the European Union, he said.

“It is vital that the Department for Trade, Industry and Competition clarifies its failed Auto Green Paper, published on May 21, 2021.

“This important policy paper – which appears largely sensible and on target – has been pushed around for the past 18 months as it was due to be finalized from August 2021 and then submitted to Cabinet for adoption.”

billions lost

South Africa’s manufacturing sector must start producing and selling more electric vehicles (EVs) or risk losing billions of rands on exports, the National Association of Automobile Manufacturers of South Africa (Naamsa) said in a statement in early July.

Mike Mabasa, Naamsa’s chief executive officer, said the push to manufacture electric vehicles is the key recommendation of a report on trade and industrial policy prepared for the Department of Trade, Industry and Competition.

Last year, 387,125 vehicles worth R148 billion, along with vehicle components worth R53.7 billion, were exported from South Africa to 151 countries. The automotive industry had a record year with domestic production of 631,983 units.

Mabasa said the European Union is South Africa’s top auto export region, with exports worth R129.7 billion, or 64.3% of the total export value of R201.7 billion. By 2030, Naamsa expects that 40% of all vehicle sales in Europe will be electric vehicles.

That number could rise to 80% by 2040. “It is clear that we cannot ignore electric vehicles if we want to continue doing business with Europe. It will have a huge impact on the country if we lose R201 billion in export earnings a year.”


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Proposed road tax changes for South Africa

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