Ongolo Proud African

Seizing the Electric Vehicle opportunity in Africa

24 January 2022

As the United Kingdom and the European Union lead the world in banning the sale of new fossil fuel-powered vehicles from 2035, it remains to be seen how Africa will juggle the competing demands to meet climate change commitments whilst empowering citizens to buy affordable vehicles. Around 40% of second-hand vehicles (e.g. automobiles, vans, SUVs, trucks) are exported to Africa compared to just 2% of new vehicles. Africa has the lowest number of new car sales globally and Electric Vehicles (EVs) are almost non-existent due to the cost and power shortages. However, the rising middle class and increasing urbanisation are creating a sense of urgency for African governments to create an enabling environment for the transition to EVs.

Africa has opportunities on both the production and consumption side. The mineral rich continent supplies three key metals used in the production of EV batteries: Cobalt, Nickel and Lithium. The Democratic Republic of Congo (DRC) produces over 60% of the world’s supply of cobalt but has failed to transition from raw material supplier to manufacturer due to domestic instability and accusations of child labour, which taint its desirability. Morocco, which produces over 10% of cobalt, has supply contracts with BMW. DRC also produces significant quantities of Nickel while Zimbabwe accounts for 2% of the world’s supply of lithium.

Morocco announced the first EV manufacturing plant in North Africa in September 2021. The German automobile company, Opel, announced plans to start producing two-seater cars that could also be exported to West Africa. The price tag is expected to be an affordable $7,000 – the cost of a basic secondhand car from Japan. Egypt is competing with Morocco to become the North African EV manufacturing hub after signing an agreement in January 2021 with Dongfeng, one of the leading automobile companies in China.

Kenya became the first African country to design and produce an electric bus when Opibus, the Kenyan-Swedish technology company, launched the first all-electric bus in Kenya on 19 January 2022. The company intends to mass produce buses to be sold across the continent by 2023. On the consumption side, Kenya has set an ambitious target, whereby EV importations should constitute 5% of the aggregate quantity of registered vehicles, by 2025.

Charging stations
Charging stations are key infrastructure for EVs

Rwanda has also instituted a series of incentives in its ambition to promote e-mobility. This includes reducing EV electrical tariffs (from 20cents/kWh to 10 cents/kWh), creating rent-free space for charging stations, and waiving excise duties and imports from electrical vehicles, power units, standbys, and charging station gear. As a bonus, no VAT will be charged on these items.

South Africa has crafted a green report called the Automotive Production Development Programme to help reduce the sector’s emissions which contribute 10.8% of the country’s total. The government appointed numerous consultants to conduct cost-effective research, and devise an incentive framework, as part of its South African Automotive Masterplan (SAAM) 2021-35. EVs would play a significant role in the SAAM agenda. Furthermore, South Africa has instituted a framework to facilitate e-versatility, by imposing separate tax collections on vehicle enrolment. Additionally, chargeable power supplies have increased steadily, with charging stations being installed every 200-300 kilometres on major motorways.

The Zimbabwean government is courting domestic private enterprises interested in establishing EV production plants in the country, an endeavour driven towards Vision 2030. In the long haul, EVs are expected to considerably diminish Zimbabwe’s fuel importation bill. Investing in charging stations is further estimated to generate more than 700 jobs in the country. As per the administration, an EVs development policy outline will expectedly be organised by early 2022.

Governments will also need to solve the problem of energy supply to ensure the sustainability of EVs such as providing off-grid solar panels next to charging stations to provide supplementary solar-powered energy for EV charging. This solution not only takes advantage of the copious amount of sunshine Africa enjoys but will also ensure that the climate change commitments are met. Countries are reliant on external financing promised as part of the COP26 outcomes. Do they need to start making plan B for how to bring all these brilliant ideas to life?



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