Toyota set to introduce three EV models to South Africa

From the newsletter 

Toyota, the world’s largest motor vehicle manufacturer, is set to launch electric vehicles in Africa for the first time. The company plans to introduce three fully-electric models in South Africa in 2026. Toyota currently only sells hybrid electric vehicles in South Africa, but leads with a 67% market share for hybrids and plug-in hybrids with models like its Corolla Cross. 

• Toyota has five models in its Beyond Zero (bZ) all-electric lineup namely the bZ3, bZ4X, bZ5, bZ Small Crossover, and bZ SUV which is in concept stage. The first model to be released was the Toyota bZ4X, a mid-size SUV.

• Volvo currently dominates EV sales in South Africa, followed by BMW and Mercedes-Benz, but Chinese EV makers are starting to flood the market too as they seek new markets amid restrictions on exports to the US and Europe. 

More details

• Toyota is one of South Africa’s top motor vehicle manufacturers and produces roughly 242,000 vehicles per year at its Prospecton plant in Durban. The plant is responsible for models like the Hilux, Fortuner, Hiace, and Corolla Quest. However, its fully EV models will be imported initially, with the aim of making some in South Africa eventually. 

• The Japanese company is not putting all its eggs in the EV basket, instead preferring to bet on all powertrains. In the global EV market, the US’s Tesla and China’s BYD continue to dominate the market. Other Chinese companies like Xpeng, Nio, Dongfeng and Xiaomi are also quickly grabbing market share.

• In 2024, Toyota sold almost 140,000 EVs globally, up by about a third from a year earlier. They accounted for less than 2% of its total global sales of over 10 million. Like other global automakers, the Japanese company is targeting Africa to grow its EV sales, starting in South Africa, where EV adoption is growing rapidly.

• More than 1,250 fully electric vehicles were sold in South Africa last year, marking a 35% increase compared to the 929 units sold in 2023. However, low incomes, high import duties, unreliable power availability and a lack of sufficient charging infrastructure have long hampered manufacturers' efforts to sell EVs in South Africa, whose share of total sales is still very low. 

• But in a price-sensitive market like Africa, lower prices will be key for Toyota’s EVs to make headway. For instance, Toyota bZ4X prices are slightly higher than prices offered by competitors for similar cars in markets like Australia. In Africa, where smaller and cheaper electric cars mainly from Chinese manufacturers are preferred, Toyota will have to tweak its pricing strategy to compete. 

• The entry of Toyota, a well established and trusted brand in Africa, adds to the pool of electric car brands that buyers will be able to choose from. A larger pool of EVs to choose from with varying prices and specifications could accelerate the adoption of new energy vehicles on the continent. Sales of electric cars in Africa hit 11,000 in 2024, more than double the previous year’s sales. 

Our take

• Toyota’s trusted brand reputation in Africa could accelerate EV adoption by giving buyers more confidence, especially when combined with the growing pool of models from Chinese, European, and American brands. 

• Toyota may be forced to adjust prices downward or introduce smaller, more affordable EVs to compete with Chinese brands like BYD that already dominate the budget segment. 

• While Toyota will initially import EVs, its eventual move to assemble them in South Africa could lower prices in a market which has one of the steepest import taxes on EVs.