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