In a move to drive local manufacturing and boost the electric vehicle (EV) industry, South Africa has introduced a 150% tax incentive for electric and hydrogen-powered vehicle manufacturers. President Cyril Ramaphosa signed this incentive into law, aiming to support the transition to EVs and stimulate innovation within the automotive sector. The law allows for a significant tax deduction of 150% for equipment and buildings used primarily in the production of EVs and hydrogen vehicles. This incentive, set to be effective from March 2026 for a decade, seeks to enhance local manufacturing capacity well into the 2030s. The legislation includes a crucial provision that assets must be predominantly utilized for EV or hydrogen vehicle manufacturing for at least five years to qualify for the full deduction. Finance Minister Enoch Godongwana allocated funds to support the country's EV transition, highlighting the government's commitment to fostering the EV industry. Despite challenges like high import duties, the incentive is expected to attract investments and drive growth in the local EV sector. South Africa's automotive industry players have welcomed this move, anticipating that it will encourage new investments, promote innovation, and bolster the sector's development. The focus on building local manufacturing capacity aligns with the country's roadmap outlined in a White Paper to boost EV manufacturing. While import duties have been cited as a hurdle, there has been a notable increase in new EV sales in recent years. Companies like Zero Carbon Charge and GridCars are investing in expanding charging infrastructure, indicating a positive trend towards electric mobility in South Africa.