The Coega Special Economic Zone (SEZ) welcomed the Minister of Finance, Honourable Enoch Godongwana’s recent Budget Vote statement, which encouraged the production of electric vehicles in South Africa. This initiative is a significant step towards reducing carbon emissions and building a sustainable, eco-friendly automotive industry in the country.
During his second year Budget Vote, the Minister announced that the government will introduce an investment allowance for new investments, beginning on the 1st of March 2026. This initiative, according to the Minister, seeks to allow producers to claim 150 per cent of qualifying investment spending on electric and hydrogen- powered vehicles in the first year.
Ms. Asanda Xawuka, Coega Executive Manager for Business Development, agrees and writes that such incentives will undoubtedly drive investment in the production of new energy vehicles and help propel South Africa to the forefront of the global electric vehicle market.
The announcement of the investment allowance for electric and hydrogen- powered vehicles is a game-changer for the automotive industry in the country. It recognises the potential for growth in the new energy vehicle (NEV) market and emphasises the importance of transitioning towards more sustainable forms of transportation. By providing this incentive, the government is signalling its commitment to supporting and promoting the production of electric vehicles in the country.
Moreover, the introduction of an investment allowance aligns with global efforts to reduce carbon emissions and combat climate change. Electric vehicles produce significantly fewer greenhouse gas emissions compared to traditional internal combustion engine vehicles, making them an essential part of the solution to current environmental challenges.
By incentivising the production of electric vehicles, the government is not only promoting economic growth but also contributing to a cleaner and healthier environment for future generations.
The international award-winning 9003-hectare Coega SEZ, which is located adjacent to the deepwater Port of Ngqura, a preferred investment destination by global companies and a gateway to Africa, is a new hub of the automotive industry in Africa and a prime location for manufacturing and industrial investment. The Coega SEZ is well positioned to benefit from the government’s push for electric vehicle production. Moreover, the SEZ offers incentives and support services to investors, against the back of existing world-class modern infrastructure, and the focus on electric vehicles complements its efforts to attract sustainable and environmentally conscious industries and investors.
The announcement regarding the investment allowance for electric and hydrogen- powered vehicles is a clear signal to investors that the South African government is serious about promoting sustainable and innovative industries. The financial incentives provided by the investment allowance will undoubtedly attract local and international investors to establish manufacturing facilities for electric vehicles, creating job opportunities and stimulating economic growth.
In conclusion, Coega encourages the production of NEVs in South Africa and welcomes the introduction of an investment allowance for spending on electric and hydrogen-powered vehicles in the first year.
