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- Will EVs defy conventional wisdom and leap ahead in Africa?
Will EVs defy conventional wisdom and leap ahead in Africa?
A new Chinese investment signals an unexpected acceleration for electric cars on the continent
1. 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.
2. Cheat sheet: Five things to know about BYD
1. It takes confidence to name your company: “Build Your Dreams” (BYD). But that wasn’t the original name. In Chinese it’s Bi Ya Di, apparently chosen for its simplicity.
2. Worldwide, BYD sales are second only to Tesla. Adding in hybrids, BYD’s 1.9 million cars even trump Tesla’s 1.3 million.
3. Founded in 1995, its workforce may soon overtake traditional car makers. BYD employs 570,000 people worldwide, while VW has 675,000.
4. BYD’s superpowers are low-cost production and lots of innovation. It spent $4.2 billion on research in the last financial year, including on batteries.
5. Is it even a car company? BYD started as a battery maker, then added cars, while its competitors are car companies that buy batteries.
3. Number of the week
… is the age above which elephants will likely die off in climate change scenarios. The mammals’ average age is currently 65. A new study warns African elephants are being crushed by climate change. “Old elephants are expected to be highly vulnerable to diseases, and drought induced deaths such as fire and risk of predation.“ Entire ecosystems are impacted.
4. Network corner
5. Q&A: Climate leaders with answers
Praise Sakanwi: Chief Technology Officer & Co-founder at TREKK SCOOTERS, a Nigerian mobility startup.
Q: What inspired your green tech company? A: I first encountered electric scooters at university in France. In 2019, I partnered with friends to bring this practical mode of transport to Nigeria. We realised our universities were ideal for a pilot. They had roads, storage facilities and students that could be maintenance interns.
Q: How has the response been? A: Our presence in universities has been transformative. We've shown that EVs elevate institutions. We're operating in three universities, with plans for ten more. We've seen an average of 6.9 rides per scooter per day, compared to 1.8 to 2.8 in Europe.
Q: What challenges did you face? A: Funding and convincing stakeholders were major hurdles. We had to demonstrate the benefits to the universities and convince them to adopt our scooters.
Q: How do you view the role of the state in this sector? A: Both the government and private sector should be involved. Developing the necessary infrastructure is key, and there's a debate about whether this should be privatised.
Q: What is the future for Trekk Scooters? A: Our long-term goal is to expand across Africa, using our technology to define eco-friendly mobility.
6. Media monitoring
Significant ban: Ethiopia announced a ban on non-electric cars.
Wind is back: A Chinese company commissioned a $220m wind turbine blade plant in Morocco.
Loss & damage: Rich nations missed another deadline for the fund implementation.
Big cheque: IMF allocates $183 million to combat climate hazards in Cameroon.
Carbon ambitions: Tanzania is set to register carbon trade projects worth $1 billion.
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Thanks to the Green Rising team for putting this together.