Why Tesla hasn’t launched in South Africa, according to Elon Musk

Tesla has not launched in South Africa because the government keeps import duties high to protect the local manufacturing industry.

This is according to Tesla CEO Elon Musk, who was responding to a question from Ziyaad Mohomed on Twitter/X.

“Import duties are super high in South Africa to protect the domestic industry,” Musk stated.

“Doesn’t make sense for Tesla, given that electric cars are not locally made.”

This wasn’t the first time Musk explained that import taxes discouraged Tesla from launching in South Africa.

In 2019, he responded to a similar question on Twitter, saying they would love to launch in South Africa but that import duties were extremely high.

Musk’s statements about high import duties protecting the domestic car manufacturing industry in South Africa are mostly true but lack important context.

Electric vehicle makers complained bitterly in the past about South Africa’s tax regime to protect domestic car factories while failing to develop a policy to incentivise local EV manufacturing.

A recent MyBroadband analysis showed that importing a R1.3-million Tesla Cybertruck (incl. VAT) would add roughly R622,000 in extra taxes if you import it to South Africa.

Trade and industry minister Ebrahim Patel also only presented government’s policy paper on electric vehicles on 4 December 2023.

According to the policy, South Africa intends to build electric vehicles using some of the $8.8 billion (R169 billion) of climate funding provided by some of the world’s wealthiest nations.

However, these incentives have not yet been implemented.

The lack of incentives hasn’t stopped several brands from importing their electric cars to South Africa.

At the end of December, there were at least 27 distinct fully electric cars for sale in South Africa. Another 11 are set to launch through the course of the year.

This raises the question — why are these manufacturers willing and able to bring in their electric cars while Tesla is not?

Industry sources explained to MyBroadband that the higher import duties applied to specific territories.

For example, cars imported from China are subject to lower taxes than ones brought in from Europe.

While it was accurate for Musk to say that South Africa’s import duties on electric vehicles remain high, that is not the whole story.

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Why Tesla hasn’t launched in South Africa, according to Elon Musk