By Nqobile Dludla

GQEBERHA, South Africa (Reuters) -Toyota plans to introduce three fully-electric models in South Africa in 2026, a senior executive said on Thursday, entering a nascent EV market where Chinese rivals such as BYD are already competing with European carmakers.

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 United States and Europe.

Toyota currently only sells hybrid electric vehicles in South Africa, but leads with a commanding 67% of the market for hybrids and plug-in hybrids in 2024, with models like its Corolla Cross.

"We're launching battery electric vehicles at the beginning of 2026, so we will have three new battery electric vehicles," Toyota South Africa CEO Andrew Kirby told Reuters on the sidelines of an auto components conference, without providing further details.

"We do not believe that one powertrain is going to dominate in the future. So we'll have internal combustion engines, hybrids, plug-in hybrids, battery electric vehicles, fuel cell electric vehicles and potentially even a carbon neutral internal combustion engine."

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.

On Chinese competition, Kirby said while he welcomes competition, "it's a very strategic concern for us and we need to make sure that we respond in the right way and as quickly as possible. It's a big challenge."

South Africa's automotive sector "is at an inflection point," he added, with fairly flat production volumes, a drop in local content and a surge in imported vehicle sales.

This has prompted the big local seven car manufacturers, including Toyota, BMW, Isuzu and Volkswagen, to put together a policy recommendation document sent to the trade and industry minister, on how to support and protect the local industry, Kirby said.

"We do have some taxation structures that are a little bit counterproductive and so we've made some fiscally neutral policy proposals," Kirby said, adding that proposals also include the restructuring of the rebate system.

"We are hoping that in the next six months there will be some short-term interventions that can be announced."

Toyota has production operations in South Africa but its fully EV models will be imported initially, with the aim of making some in South Africa eventually.