Prospective Tesla buyers in South Africa will have to defer their dreams indefinitely as the popular electric car brand is still not set to enter the local market.
In 2016, there was a momentary spark of optimism when Tesla unveiled the Model 3, and reservations opened for potential buyers in South Africa. However, this enthusiasm dwindled, and in 2019, Elon Musk, the South African-born founder of Tesla, conveyed on a social media platform that while he harbored a desire to introduce the brand to South Africa, the prohibitive import duties posed a significant hurdle.
Despite ongoing efforts, including the pending release of South Africa’s White Paper on electric vehicles, the situation has not changed. Elon Musk maintains his stance on withholding the brand’s local introduction, citing the high import duties in South Africa as a deterrent. In response to a recent query, Musk reiterated that the import duties are excessively high in South Africa, designed to protect the domestic industry, making it impractical for Tesla, especially since electric cars are not manufactured locally.
While this does not completely eliminate the possibility of Tesla entering the market in the future, it hinges on the implementation of a more favorable tax structure for electric vehicles, a change that is anticipated to take considerable time.
The absence of a clear policy direction for electric vehicles has raised concerns among car companies in South Africa. This is particularly relevant given that Europe and the UK, which collectively account for half of the country’s vehicle exports, plan to phase out the sale of new internal combustion engine vehicles from 2023. Despite the release of South Africa’s Electric Vehicles White Paper in December 2023, it has yet to outline specific incentive structures for battery vehicles. Additional details are expected to be revealed in the upcoming Budget Speech in February. However, it seems that the initial focus of the EV roadmap will be on securing manufacturing and export contracts for local Original Equipment Manufacturers (OEMs). Incentives for purchasing electric vehicles are likely to be addressed later, considering challenges like load shedding are a significant concern for the government.
During the announcement of the White Paper in the previous year, the Minister of Trade, Industry, and Competition (DTIC), Ebrahim Patel, indicated that the second phase of the EV roadmap could span up to seven or eight years. Unless there are unforeseen developments in the Finance Minister’s Budget Speech the following month, the prospect of Tesla entering the South African market is expected to be a lengthy process.
In contrast, Tesla’s main competitor on the global stage, BYD from China, is gearing up to launch in the local market. Despite a dip in Tesla’s stock in early 2024, the company continues to perform well globally. The Model Y, in particular, secured its place as the best-selling car overall in Europe in 2023 and ranked as the fifth best-selling model in the U.S. market. Notably, Tesla recently commenced production of its long-awaited Cybertruck and introduced an updated version of the popular Model 3 sedan.