South Africa doubles production of plug-in hybrid EVs

From the newsletter

South African car manufacturers increased production of plug-in hybrid vehicles (PHEVs) by 121% last year to 11,406, driven by higher demand. More than 94% are exported, with only 737 PHEVs sold locally, although that is still more than double the 368 units sold in 2023. Overall, PHEVs only made up 0.14% of total sales in South Africa in 2024. 

• PHEVs offer a middle ground between traditional internal combustion engine (ICE) vehicles and full battery electric vehicles (BEVs). This is particularly appealing in South Africa, where widespread charging infrastructure is still limited.

• In a market where more than half a million motor vehicles are sold annually, the PHEV sales numbers are tiny. This could however change as prices are expected to decline. Growth could also be propelled by the introduction of longer-range options, which are already being sold in markets such as China.

More details

• BMW’s X1 plugin hybrid was the best selling PHEV in South Africa in 2024 with 145 units. The German automaker also took second place as well, with its X3 registering 97 units sold in 2024. The plugin hybrid version of the BMW X3 is built in the South African capital Pretoria. 

• Other top-selling PHEVs include BMW’s X5, which was joint 3rd with the Volvo XC60, with both models registering 74 units. US automaker Ford is set to produce the PHEV version of its popular Ranger pickup truck in Pretoria. This is a significant development for the South African car market, as the Ford Ranger is an exceedingly popular vehicle.

• South Africa continues to attract new models of PHEVs, with Omoda and Jaecoo, divisions of Chinese automaker Chery Group, launching two models in the country in February. The Omoda C9 and Jaecoo J7 made their debut during a road trip arranged to test the stated more than 1,000 km combined range of the vehicles with no fuel stops.

• The South African government does not directly incentivise local production of PHEVs. It does however protect local manufacture of fully electric cars through an import tariff of 25%. Some countries in Africa such as Rwanda have started to remove incentives on hybrids to promote the uptake of pure EVs. 

• Increased availability of hybrid models from major manufacturers is contributing to the growth in demand for PHEVs – not only in South Africa but also in other markets such as Nigeria, Kenya, Egypt and Ethiopia. Hybrid vehicles provide a stepping stone for many African countries to allow for the future growth of full EV adoption. 

• Demand for PHEVs is tipped to grow further in Africa, but the rate of growth is still held back by the lack of sufficient charging infrastructure. This challenge affects most countries in Africa. As the number of charging stations grows, demand for PHEVs is expected to grow in tandem with fully electric vehicles. 

Our take

• EV sales in Africa remain tiny compared to more mature markets such as Europe and the US. For many African countries, a gradual transition through PHEVs might be more feasible than a rapid shift to full battery EVs. This allows for the development of charging infrastructure and the establishment of supporting industries.

• The development of long-range PHEVs is experiencing significant progress, driven by advancements in battery technology and evolving consumer demands. Manufacturers are increasingly incorporating larger and more efficient battery packs. This further reduces range anxiety, likely making PHEVs more attractive to buyers in Africa. 

• African governments should extend support to PHEVs in the same way they are incentivising EVs. The push to fast-track the transition to EVs is commendable, but the reality is that the majority of African countries are not adequately prepared for the transition. Governments should therefore halt withdrawing the incentives that they had put in place to promote PHEVs.