Late last year, South Africa's President Cyril Ramaphosa signed the Taxation Laws Amendment Act, introducing a significant tax incentive to promote the production of battery-electric and hydrogen-powered vehicles in the country. This move aligns with the government's commitment to transition the automotive industry towards electric and hydrogen-powered vehicles as outlined in the Electric Vehicles White Paper. Several other African countries have also introduced tax incentives to boost investments in electric vehicles. The tax incentive allows for income tax allowances on assets used in the production of these vehicles, with a 10-year application period starting from March 2026. However, challenges arise due to South Africa's heavy reliance on coal for electricity generation, impacting the sustainability of electric vehicles. The manufacturing process for electric and hydrogen-powered vehicles involves energy-intensive procedures and the extraction of rare earth metals, raising environmental concerns. To ensure the success of the tax incentive, South Africa must invest in renewable energy sources, develop strategies for electric vehicle adoption, implement sustainable manufacturing and recycling practices, and focus on emissions control throughout the supply chain. Only through a holistic approach can South Africa drive towards a greener automotive future.