BMW Group South Africa (BMW SA) is seeking a 0% import duty on pure electric vehicles (EVs).
The local arm of the German carmaker in December 2016 submitted a formal application to the International Trade Administration Commission of South Africa (Itac) for the reduction of the import duty on pure electric EVs, which means hybrid vehicles are excluded.
The application is being led by BMW SA and sub-Saharan Africa CEO Tim Abbott.
The submission is for a 0% duty on the import of electric vehicles for a period of three years and, thereafter, for a 10% import duty to be applied.
Currently, EVs attract the highest import duty, at 25%, says BMW SA, while, for example, normal imported vehicles under one-litre engine capacity attract no duty.
Also, under European Union (EU) trade agreements, normal imported vehicles attract a duty of 18%.
The main objective of the application is to stimulate the growth and uptake of EVs in South Africa by making them more affordable to a wider customer base, says BMW SA.
“A reduction in the import duty will further create a more competitive market, with a wider offering for customers. A secondary benefit will be the attraction of potential long-term investment in electro- mobility in South Africa.”
Itac is still investigating the duty application.
There has been a formal engagement with BMW SA as the applicant.
The application will be gazetted for public comment.
It is believed that Itac is also engaging other key government departments on the matter, such as the Department of Trade and Industry, the South African Revenue Service and the Treasury.
These departments are afforded the opportunity to submit their input to the commission.
Itac will also be engaging other vehicle manufacturers in South Africa, as well as the National Association of Automobile Manufacturers of South Africa, for their submissions.
The entire process is expected to be completed within the next four months.
Electrification is one of the central pillars of the BMW group’s corporate strategy, states BMW SA.
The BMW group recently announced that all its brands and model series could be electrified, with a full-electric or plug-in hybrid drivetrain being offered in addition to the combustion engine option.