South Africa’s electric vehicle (EV) market is on the brink of transformation as major local automotive players Toyota and Volkswagen gear up to launch their first fully electric models in 2026, aiming to make EVs more affordable and accessible for local consumers.
Both companies plan to take full advantage of import duty credits and local production incentives that could drastically reduce costs – a game-changer in a market long hindered by high EV prices and limited infrastructure.
Toyota: Three New EVs in the Pipeline
Toyota South Africa CEO Andrew Kirby confirmed that the company will introduce three battery electric vehicles (BEVs) in early 2026.
While Toyota currently dominates the local hybrid vehicle market, these will be the company’s first full EVs in South Africa.
Kirby acknowledged the rising pressure from Chinese automakers entering the affordable EV space, calling it a “strategic concern.”
“It’s a strategic concern for us and we need to make sure we respond in the right way,” he said.
Reports suggest Toyota could use accumulated Production Rebate Certificates (PRCs) to reduce import duties to 0%, potentially slashing prices by R150 000 or more.
For instance, an electric version of the popular Urban Cruiser could be priced under R700 000 – a significant discount compared to current offerings.
Volkswagen to Launch ID.4 SUV
Meanwhile, Volkswagen South Africa will roll out its ID.4 electric SUV in the same year, marking the brand’s first foray into the South African EV space.
The company is expected to leverage similar import duty savings through its local manufacturing efforts.
Both automakers benefit from PRCs, part of South Africa’s Automotive Production and Development Programme (APDP), which rewards manufacturers for building vehicles locally by allowing them to offset import taxes on other models.
Battling Price and Infrastructure Barriers
Currently, EV adoption in South Africa is low, dominated by high-end European brands like Volvo, BMW, and Mercedes-Benz, while Chinese entrants such as BYD are beginning to fill the more affordable niche.
However, prices remain inflated by 25% import duties and other taxes.
Even the cheapest EV in the market – the BYD Dolphin – still costs R539 990, with R124 635 of that attributed to import-related charges.
Toyota and Volkswagen’s entry, enabled by local production incentives and upcoming government tax breaks, could challenge this status quo.
New Government Support Incoming
In addition to existing production rebates, the government is preparing to introduce a 150% tax deduction for companies investing in EV production equipment, starting March 2026.
The move is expected to further encourage local EV manufacturing and help bring down overall consumer costs.
A Turning Point for EV Adoption in SA
South Africa’s EV market has long lagged behind the global trend due to affordability and infrastructure issues, particularly limited charging networks and load shedding.
But the participation of industry heavyweights like Toyota and Volkswagen could mark a turning point.
With more affordable models, local production, and stronger policy backing, the South African EV market appears poised to enter a new era – one that could finally make electric mobility a realistic option for mainstream consumers.
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