South Africa’s government has introduced a major tax incentive for investments in the production of electric- and hydrogen-powered vehicles.
The scheme will allow manufacturers to claim a 150% tax deduction on investments into the sector.
Announced by South Africa’s Minister of Finance Enoch Godongwana, the tax break – effective from 1 March 2026 – is projected to reach $26 million for the fiscal year 2026/27.
With the potential to produce up to 13 million tons of green hydrogen and derivatives per year by 2050, South Africa has identified a $15.6 billion investment pipeline under the country’s Green Hydrogen National Program.
The program will comprise 19 projects identified for accelerated development by the government, including the 400-kt-per-annum Boegoebaai Green Hydrogen Project; the 780,000 ton-per-annum HIVE Ammonia Project; and the 185-kt Hydrogen Valley Project, among other developments.
Meanwhile, boasting significant reserves of raw materials crucial for the manufacturing of lithium-ion batteries – such as nickel and manganese – South Africa is well-positioned to accelerate its vehicle manufacturing industry, which accounts for 7.5% of the country’s GDP and 10% of manufacturing exports.
