Electric vehicle policies in several
African countries are moving from pilots into formal frameworks aimed not only
at fast-tracking adoption, but at positioning the continent as an industrial
participant in the EV economy. Beyond environmental goals, the new policies are
increasingly treating electric mobility as an industrial, fiscal, and
infrastructure priority rather than a niche climate experiment.
South Africa will this year introduce a
150% tax deduction for qualifying capital investments in electric vehicle and
hydrogen production, a landmark incentive aimed at boosting local manufacturing
and attracting private sector investment. Enforceable from March 1, 2026, the
measure is expected to shape how the country participates in global EV value
chains.
“To encourage production of electric
vehicles in South Africa, the government will introduce an investment allowance
for new investments, beginning 1 March 2026,” Finance Minister Enoch Godongwana
said, a sign of Pretoria’s intent to secure a foothold in green automotive
production.
The incentive will run for 10 years and
apply to qualifying assets acquired from March 1, 2026. To underpin the
transition, the government has committed US$50.8 million (R964 million) over
three years, with the tax cost projected at US$26.3 million (R500 million) in
the 2026/27 fiscal year alone. These measures are part of South Africa’s 2023
Electric Vehicle White Paper, which lays out a roadmap to shift the automotive
sector onto a dual production platform, manufacturing both internal combustion
and electric vehicles by 2035.
Global EV competition is intensifying. In
the fourth quarter of 2025 alone, quarterly battery-electric vehicle (BEV)
sales surpassed four million units for the first time across major markets, up
17% year-on-year, according to the Electric Vehicle Sales Review Q4 2025
published by Strategy& and PwC’s Information Service.
For the second consecutive quarter, more
than one in five vehicles sold globally were fully electric. Over the full
year, BEV sales increased by 30%, driven largely by China’s scale, where
volumes rose 33% across 2025. Europe also posted a strong rebound, with sales
in its five largest markets climbing 41% in Q4.
In Africa, EV sales more than doubled in
2024 to nearly 11,000 units, though uptake remains below 1% of the market, with
Morocco and Egypt each reporting more than 2,000 new EVs sold.
According to industry analysts, the surge
presents both a risk and an opportunity for African economies, depending on
whether the continent becomes a producer in the EV transition or simply a
growing end-market for imported vehicles.
“Without industrial participation, the
continent could remain a passive destination for imports,” according to Maxwell
Ratemo from the Electric Mobility Association of Kenya. “With targeted
incentives, it could capture assembly, component production, and broader clean
transport industries.”
That industrial question is already shaping
policy choices in South Africa, one of the few African economies with the
manufacturing depth to anchor EV production at scale. The country has long
served as a hub for global automotive brands, and its EV investment allowance
is designed to ensure future production lines do not bypass the continent.
In October 2024, BMW Group South Africa
began producing the fourth-generation BMW X3, including the X3 30e xDrive
plug-in hybrid, at its Rosslyn plant in Pretoria for export markets. The
milestone followed a US$221.1 million (R4.2 billion) investment to electrify
the facility and upskill its workforce.
While South Africa focuses on industrial
incentives, other African states are moving through regulatory and
consumer-facing reforms. Kenya has this week unveiled green number plates for
EVs, making zero-emission cars instantly recognisable on roads. Energy Cabinet
Minister Davis Chirchir said the plates serve as “tools for enforcement” and
incentive targeting, helping governments roll out preferential taxes, parking
access, and urban transport reforms.
The move follows Kenya’s launch of its
National Electric Mobility Policy in early 2026, which outlines adoption,
infrastructure rollout, fiscal incentives, and industrial ambition. Kenya has
also announced plans to expand charging infrastructure, with thousands of
stations targeted by 2030 to tackle one of the biggest adoption barriers.
According to Rose Mutiso, a science advisor
at Energy for Growth Hub, “Countries that pair industrial incentives with
reliable policy signals, from tax holidays to manufacturing support, are far
more likely to attract long-term capital and local supply chains.”
“Policy certainty turns one-off deployments
into sustainable industry growth rather than short lived adoption.”
Across the continent, the EV market is
small but active. The Africa E-Mobility Alliance estimates roughly 30,000 EVs
were in operation by mid-2025, driven mostly by two- and three-wheelers,
delivery fleets, and early-stage public transport electrification. In many
countries, electrification is advancing through commercial necessity,
motorcycles, minibuses, and logistics fleets adopt EVs because fuel costs are
high and maintenance savings are immediate.
Rwanda stands out as a policy laboratory.
Kigali has extended tax exemptions on EVs, batteries, and charging equipment
through 2028, signalling a long-term commitment to affordability and market
certainty. The World Bank has highlighted Rwanda’s plans to electrify a
significant share of its bus fleet by 2030, framing EV adoption as both a
climate and urban development strategy.
Across North Africa, Morocco and Egypt are
linking EV adoption to industrial export strategies, positioning themselves as
early manufacturing gateways for Europe. Morocco’s automotive sector, already
integrated into European supply chains, is attracting new investment. Renault
is exploring a dedicated EV facility near the Nador West Med port, expected to
open in 2026, with plans to achieve €3 billion in local sourcing and 80% supply
chain integration. BYD’s reported 46% share of Morocco’s hybrid and electric
market further underscores the growing industrial momentum.
Egypt is aggressively positioning EVs as
both a climate and industrial lever. Under its National Automotive
Manufacturing Programme, the government aims to attract global automakers to
localise production, reduce fuel dependence, and expand exports. By October
2025, total investment in free zones reached $38.5 billion across 1,237
projects, creating roughly 245,000 direct jobs, with automotive components
among targeted sectors. Authorities are evaluating incentives to support local
assembly and sustainable transport.
Elsewhere, Ethiopia has taken one of the
continent’s boldest regulatory steps by restricting internal combustion
imports, accelerating electrification through direct market restructuring
rather than gradual incentives.
Across Africa, Chinese EV technologies are
driving a techno-social mobility revolution. BYD dethroned Tesla as the world’s
top EV seller with 2.25 million vehicles in 2025. The milestone was achieved
after its Morocco launch involving a US$5 billion manufacturing facility in
Kenitra. Elsewhere, Kenya’s TAD Motors launched its first locally built EV
prototypes using Kenyan steel and Chinese batteries, aiming for 90% local
content by 2026. Reports show South Africa is set to welcome six more Chinese
brands this year, and Ghana is courting Chinese EV makers for production and
assembly.
Infrastructure and industrial policy are
also beginning to converge in Nigeria. This week, the Federal Ministry of
Industry, Trade and Investment signed an MoU with South Korea’s Asia Economic
Development Committee to develop EV manufacturing capacity alongside charging
infrastructure, signalling Abuja’s ambition to move beyond imports. The
government says the project will begin with vehicle assembly before scaling
toward full local production and technology transfer.
Yet challenges remain. High upfront costs,
limited charging networks, weak grids in some markets, and absent large-scale
financing mechanisms constrain uptake.
“Success in the next phase will depend on
aligning transport electrification with a stable, increasingly renewable
electricity supply,” Ratemo explained.
