South Africa’s transition towards electrified vehicles is accelerating, but it is not following the path global manufacturers had charted. Buyers are favouring hybrids over fully electric cars, and the vehicles they are choosing increasingly carry Chinese badges.
The latest TransUnion Mobility Insights Report, covering the first quarter of 2026, paints a picture of a market undergoing two simultaneous structural shifts. The first is technological: traditional hybrids (HEVs) and plug-in hybrids (PHEVs) are outselling fully electric vehicles (EVs) by a wide margin. The second is competitive: Chinese original equipment manufacturers (OEMs) have captured nearly one in five new vehicle sales, a level of penetration that is redrawing the country’s automotive landscape.
The numbers on electrification are stark. Traditional hybrids account for 60.3% of all new energy vehicle (NEV) sales. Plug-in hybrid sales surged by 429.9% year-on-year in the first quarter. Fully electric vehicle sales rebounded from a 2025 contraction, rising 97.1% to 544 units, yet they represent just 11.9% of the NEV market.
Consumer preference data from the report’s survey confirms the trend. Consideration of internal combustion engine (ICE) vehicles fell to 49% from 56% in the previous quarter. Hybrids captured the bulk of that decline, with consumer interest rising to 39% from 30%. Battery electric vehicle (BEV) interest grew to 26%, but the gap between hybrid and full electric remains significant.
The driver of this shift is fuel economics. South Africa’s petrol price breached R23 ($1.44 USD) per litre in April 2026 following the escalation of Middle East conflict, one of the largest single-month increases in half a century. Hybrids offer a hedge against this volatility without the infrastructure demands of full EVs, whose adoption remains constrained by limited charging networks outside major cities, expensive public fast charging, and rising Eskom electricity tariffs.
But the technological shift is unfolding against a competitive backdrop that is equally consequential. Chinese brands now command a collective market share of 19.1% in the passenger and light commercial vehicle segment, up from approximately 4% in 2021. In the first quarter of 2026, Chinese OEM sales grew 75% year-on-year, while the combined sales of established OEMs grew by just 2%.
The report describes this as a move “from disruption to structural shift.” Chinese manufacturers are no longer competing solely on entry-level pricing. They are expanding into higher-value segments, equipping vehicles with advanced technology and specification levels that challenge established competitors. Brands such as Chery, GWM, Jetour, and Omoda/Jaecoo recorded significant growth, with Jetour expanding 249% year-on-year and Foton 171%.
The industrial implications are material. Chery’s acquisition of Nissan’s Rosslyn manufacturing facility — including the factory, land, and stamping plant — signals an intention to embed production locally rather than rely on imports. The facility is expected to be retrofitted over the next 12 to 18 months, with production targeted from 2027, including electrified vehicles spanning hybrids, plug-in hybrids, and battery electric models. Export ambitions extending into Africa and Europe position Rosslyn as a potential regional production hub.
This industrial transition is not without friction. Component manufacturers face mounting pressure as import volumes rise and local content levels remain below industry targets. The government is caught between preserving the affordability and competition benefits that Chinese entrants have delivered and encouraging localisation and manufacturing employment. Tariff policy discussions are underway, though no changes have been implemented.
The convergence of these two shifts — hybrid preference and Chinese dominance — is reshaping the electrification pathway for South Africa. Chinese manufacturers have been particularly effective at positioning hybrids as accessible, feature-rich alternatives to conventional ICE vehicles. Their pricing power, combined with improving residual values and expanding dealer networks, is lowering the barriers to hybrid adoption in ways that legacy OEMs have struggled to match.
“The strategic logic increasingly reflects underlying market realities,” the report notes, pointing to the combined sales footprint of Chery, Jetour, Omoda, and Jaecoo, which now exceeds that of the Nissan operation being replaced at Rosslyn.
Financing structures add another layer of complexity. The average new vehicle loan amount has risen 38% since 2020 to an estimated R413,000 ($25,823.30 USD). More than 56% of new vehicle finance originations now extend beyond 72 months, up from 41.7% in late 2021. Balloon payments feature in 35% of new finance deals, with the average balloon representing approximately 37% of vehicle value.
For consumers navigating this environment, the consequence is a widening gap between monthly affordability and long-term cost. “South Africans are financing cars they can’t explain,” said Vanice Ntuli, a practising Finance and Insurance Business Manager and author of an upcoming book on vehicle finance. Her comments, released ahead of the book’s October launch, underscore a growing disconnect between the complexity of modern finance products and consumer understanding.
Ms Ntuli points to the proliferation of Guaranteed Future Value (GFV) structures and balloon payments as mechanisms that enable short-term access but carry significant long-term consequences. “Legality and clarity are not the same thing,” she said. The National Credit Act caps vehicle instalments at 25% of gross income, but a compliant agreement can still be poorly understood.
For fully electric vehicles, this financing environment is particularly challenging. Lenders remain cautious about the technology’s depreciation curve over 72 or 84-month terms, especially for newer market entrants without an established residual value track record. While Chinese OEM residual values are improving — leading models now outperform several established Korean and European competitors on three-year depreciation metrics — the data window remains short relative to the extended finance terms now common in the market.
Government policy is evolving, though slowly. A new Section 12V tax incentive, effective from 1 March 2026, allows manufacturers to claim a 150% deduction on qualifying investments in electric and hydrogen-powered vehicle production. The state has committed R1 billion over the medium term to support localisation of the NEV value chain. The industry awaits implementation of the South African Automotive Masterplan 2035 and the second phase of the Automotive Production and Development Programme.
Until policy clarity arrives, the market is making its own determinations. Consumers are choosing hybrids because the economics work today. They are choosing Chinese brands because the value proposition — technology, specification, and price — is increasingly difficult for legacy manufacturers to match. The electrification of South Africa’s vehicle fleet is proceeding, but on terms defined by affordability and pragmatism rather than regulatory ambition or technological idealism.
The data in this article is drawn from the TransUnion Q1 2026 Mobility Insights Report, which synthesises information from NAAMSA, eNaTIS, the Bureau for Economic Research, and TransUnion’s Consumer Pulse Survey.