South Africa’s electric vehicle (EV) market is gearing up for a significant shift in 2026 as two of the country’s automotive giants, Toyota and Volkswagen, prepare to enter the segment with competitively priced models that could challenge current import-dominated offerings.
According to reports, both manufacturers plan to leverage local manufacturing advantages and import duty credits to introduce more affordable EVs, potentially addressing key barriers like high prices and limited infrastructure that have previously constrained widespread EV adoption in the country’s market.
TimesLive reports that Toyota South Africa CEO Andrew Kirby confirmed plans to introduce three fully electric models in early 2026, marking the company’s first entry into the battery EV segment despite its current dominance in the hybrid market.
Similarly, MyBroadband notes Volkswagen will launch its ID.4 SUV locally the same year.
The competitive advantage for these established manufacturers lies in their local production operations and accumulated import duty credits. Companies that meet minimum local production thresholds receive Production Rebate Certificates (PRCs) that can reduce import duties on vehicles to as low as 0%, MyBroadband reports.
This system could potentially save consumers significant amounts. The report provides a detailed example showing how Toyota could reduce the landing cost of an electric Urban Cruiser by approximately R150,000 using these credits, potentially bringing the price below R700 000.
Currently, the South African EV market is dominated by European manufacturers like Volvo, BMW, and Mercedes-Benz in the premium segment, with Chinese manufacturers like BYD entering with more affordable options. However, even the most affordable current EV, the BYD Dolphin at R539 990, faces substantial price inflation due to a 25% import duty and additional taxes that add approximately R124 635 to its landing cost.
Kirby acknowledged the competitive challenge from Chinese manufacturers.
‘It’s a strategic concern for us and we need to make sure we respond in the right way,’ he stated.
He also noted that the automotive sector is at an inflection point with flat production volumes and increasing imports.
Both reports indicate that additional government incentives are coming, including a 150% tax deduction on EV production equipment starting in March 2026, which could further accelerate local manufacturing and reduce costs.
The planned entry of Toyota and Volkswagen into South Africa’s electric vehicle market represents a potential turning point for EV adoption in the country.
While significant challenges remain, including charging infrastructure and energy reliability, the participation of these volume manufacturers suggests the South African EV market may be approaching a new phase of development and accessibility for consumers.
Written by Lulama Klaasen
First published on Cape {Town} etc
Also see: Tata Motors Passenger vehicles re-enters the South African market with new SUV line-up
