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How four-wheels might follow where two-wheels are already heading

Top Chinese electric car maker BYD has announced it is entering the Rwandan market.

Why it matters: Africa has shown good progress in electric motorbikes and buses. But electric cars have so far had almost zero traction on the continent.

  • No country has more than about a thousand electric cars, and most have none. 

  • By contrast, electric motorbikes are expected to soon number in the millions in Africa.

The BYD model: Selling cars is only part of their roll-out in Rwanda. 

  • BYD (see our Cheat Sheet below) will also create charging stations, deploy solar panels for electricity generation, set up maintenance points and offer spare parts.

The strategy: BYD is already in some of Africa’s most sophisticated markets.

  • It sells cars in South Africa as well as some North African countries.

  • Its buses also operate in Kenya via its partner BasiGo. 

  • But Rwanda is the Chinese car giant’s first step beyond well-off Africa.

Why Rwanda? The small East African nation with an annual per-capita income of about $1,000 is not the most obvious market-entry choice. However, there is a logic.

  • The capital Kigali and the country as a whole are small enough to make building nationwide charging infrastructure possible. 

  • The government strongly supports green tech investments — like the Chinese government. 

  • The proximity to Congo and Zimbabwe (sources of critical minerals for battery production) may be useful in future to manufacture in Africa.

The competition: BYD is trying to take the African market but isn’t alone. 

  • Homegrown competitors include Uganda's Kiira Motors, Kenya's Mobius, Ghana's Kantanka and Nigeria's Innoson Motors. 

  • Western giants such as Tesla and Stellantis are already manufacturing in Morocco.

  • Germany’s Evum introduced “aCar” as a low-cost offering in Africa.

Stumbling blocks: What would need to happen for electric cars really to take off on the continent? Standard building blocks are needed:

  • Reliable charging infrastructure is paramount. 

  • As is a reliable and ideally renewable electricity supply.

  • Manufacturing vehicles locally could lower prices. 

Key lever: However, the African market has one long-standing peculiarity. Most cars arrive here second-hand from elsewhere. That’s not likely to change.

  • The electric car market needs used imports from Europe & Asia to lower prices. 

  • This has led McKinsey to conclude: “Until used four-wheeler EVs become available at scale, likely in the mid to late 2030s, it is unlikely they will be able to compete without incentives in Africa.“

  • By 2040, electric cars are expected to account for 10% of African vehicles, while electric two-wheelers will have reached 50%. 

Main ingredient: No electric-car market worldwide has taken off without significant government support. Africa will be no different. 

  • State subsidies, non-EV import bans and emission targets may be necessary. 

  • And government is needed to create electricity and charging infrastructure.