Tax boost for electric cars

'Attractive' incentive effective 1 March, 2026 will support local EV production.

- Amanda Visser

NEW ASSETS: MANUFACTURERS CAN CLAIM.

The wheels are in motion to transition the automotive industry over the next 10 years. The enabling provisions that will allow carmakers to claim 150% of the expenditure on new production capacity for electric and hydrogen-powered vehicles were published this month.

The provisions in the draft Taxation Laws Amendment Bill give effect to the February announcement of an investment allowance of R500 million for the 2026-27 tax year. The incentive will come into effect on 1 March, 2026 and will apply to assets brought into use for the first time before 1 March, 2036.

National Treasury said any motor vehicle manufacturer investing in new and unused "buildings, machinery, plant, implements, utensils and articles" to be used for the production of electric or hydrogen-powered vehicles will qualify for the incentive.