From South Africa’s industrial incentives to Kenya’s green number plates, a number of African governments are moving beyond pilot projects to implement comprehensive electric vehicle policies.
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.
SA’s tax incentive
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 $50.8-million (R964-million) over three years. The tax cost is projected at $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. It lays out a roadmap to shift the automotive sector onto a dual production platform. Thus manufacturing both internal combustion and electric vehicles by 2035.
Global sales surpass 4 million units
Global EV competition is intensifying. In the fourth quarter of 2025 alone, quarterly battery-electric vehicle (BEV) sales surpassed 4 million units for the first time across major markets. This is 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. Morocco and Egypt each report more than 2, 000 new EVs sold.
According to industry analysts, the surge presents both risk and an opportunity for African economies. This is 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. The country is one of the few African economies with the manufacturing depth to anchor EV production at scale. South Africa 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.
BMW SA’s plug-in hybrid
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 $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. It is 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. It outlines adoption, infrastructure roll-out, fiscal incentives, and industrial ambition. Kenya has also announced plans to expand charging infrastructure. And thousands of stations are being targeted by 2030, to tackle one of the biggest adoption barriers.
Rose Mutiso, science advisor at Energy for Growth Hub, agreed on policy.
“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,” she said.
Policy is key to long-term investment
“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. This was 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 and 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. Thus 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. It frames EV adoption as both a climate and urban development strategy.
Manufacturing gateways for Europe
Across North Africa, Morocco and Egypt are linking EV adoption to industrial export strategies. They are 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. It has 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. Roughly 245, 000 direct jobs were created, with automotive components among targeted sectors. Authorities are evaluating incentives to support local assembly and sustainable transport.
Ethiopia’s direct market restructuring
Elsewhere, Ethiopia has taken one of the continent’s boldest regulatory steps by restricting internal combustion imports. By also 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 $5-billion manufacturing facility in Kenitra. Elsewhere, Kenya’s TAD Motors launched its first locally built EV prototypes using Kenyan steel and Chinese batteries. It aims 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.
