South Africa has built one of the continent's most sophisticated automotive manufacturing industries. Now, as major export markets move towards electric vehicles, manufacturers and policymakers are accelerating investment to ensure the country remains part of the next generation of global auto production.
South Africa’s automotive industry has spent decades building a business designed for the world.
In 2025, the country exported a record 414,268 vehicles, with more than 80% of exports destined for the European Union and United Kingdom. The industry includes seven major global manufacturers and more than 500 component suppliers, making automotive production one of South Africa’s most important manufacturing engines.
But the products global markets want are changing.
As Europe and other major markets transition towards electric and new-energy vehicles, South Africa is working to ensure that a manufacturing base historically built around internal-combustion vehicles can evolve with its customers.
Investment Begins to Follow the Transition
That change is already visible on factory floors.
BMW has invested in preparing its Rosslyn plant to manufacture the plug-in hybrid X3, while Ford’s Silverton operation has become a production hub for the Ranger plug-in hybrid. South Africa is also using investment incentives to encourage manufacturers and suppliers to build new-energy vehicle capabilities locally.
From March 2026, qualifying investments in electric and hydrogen vehicle production became eligible for a 150% first-year tax deduction, adding another financial incentive for manufacturers considering where to locate future production.
Deputy Trade, Industry and Competition Minister Zuko Godlimpi has also said existing automotive incentive programmes need to evolve further to accommodate new-energy vehicles and hybrids as South Africa works to maintain its competitiveness.
Protecting More Than Vehicle Exports
The stakes extend beyond carmakers.
South Africa’s automotive value chain supports assembly plants, component manufacturers, engineering businesses and logistics operations. The industry accounts for 22.6% of the country’s manufacturing output, according to InvestSA.
That makes the EV transition an industrial question as much as an environmental one.
South Africa also sees an opportunity in its access to minerals used in batteries and other clean technologies. Government policy increasingly aims to connect those resources with domestic processing, battery manufacturing and vehicle production rather than relying predominantly on raw-material exports.
The country’s advantage is that it is not starting from zero. It already has factories, suppliers, engineering expertise and established relationships with international automakers.
The challenge is ensuring those strengths remain relevant as the product itself changes.
For South Africa, the EV era is therefore less about abandoning its automotive success story than making sure the next chapter of that story is still manufactured at home and sold to the world.
Sources: Reuters; South Africa Department of Trade, Industry and Competition; InvestSA; South African Government.
