Why Africa's adoption of electric vehicles has not fully taken off.

Why Africa's adoption of electric vehicles has not fully taken off.

Editor Wakesho

The world is putting efforts to move from using fossil fuels to clean energy, but the Middle East and Africa (MEA) region has not fully taken off despite its richness in renewable energy resources.

The world’s demand for cleaner energy has intensified especially on the back of reports that greenhouse gas emissions reduced significantly during Covid-19, when industrial activity and transportation were suppressed.

According to KETRACO communications manager Raphael Mworia, he says countries seek an integration that will convert national grids to regional ones, with Kenya Electricity Transmission Company (KETRACO) already having completed 96 percent of its intended high voltage transmission line connections in Tanzania and inching further into other countries.

MEA estimates about 5,000 active projects that are estimated to be at $1.9 trillion which is the largest project intelligence service. Also,  Nicolas Daher, the lead energy analyst at The Economist Intelligence, warns that demand for fossil fuel will remain high for the next decade and coal use peak in China in 2028, a possible proliferation of electric vehicles will slow down any accelerated use of oil.

In some countries, vehicles powered by fossil fuels will be phased out by 2030. This is mostly in the West, with Africa’s adoption of electric vehicles expected to be slower. It is expected that around 350 million electric vehicles will be on the road by 2035.

The Kenya Power and Lighting Company recently set aside Sh40 million that will enable it to transition to electric vehicles while phasing out fossil-fuel-powered vehicles and motorbikes from its fleet. The Energy and Petroleum Regulatory Authority (EPRA), in a more diplomatic move, asked for the widespread use of hybrid vehicles, those that can use either fossil fuel or one or more electric motors.

There has been a debate on the effects of mining components -such as lithium and cobalt- on the environment and human rights. These components are very important components that help power electric vehicles.  In Congo, where cobalt resources were at 3.6 million tonnes in 2019, greatly higher than second-best Australia, claims of abuse of rights of local miners, some of them children, abound.

Here are the reasons for the slow take-off in African adoption:-

  1. Policies enacted by the government:

In contrast to Europe, where government policies are pressuring the automotive industry to adopt more environmentally friendly options such as electric vehicles, African governments are more relaxed. There is one African country, the Republic of Cape Verde, that has taken steps to phase out the sale of internal combustion engine vehicles by setting a deadline of 2035 for the end of imports of such vehicles. In comparison, approximately 17 countries across Asia, Europe, and America have enacted legislation along similar lines. In addition, many countries have committed to achieving net-zero greenhouse gas emissions in order to achieve the sustainable development Goals.

2. Purchase cost of EVs

Price is an obvious reason for hesitancy. Up to now, electric cars have been more expensive than petrol or diesel vehicles. However, once you purchase your EV it is cheaper to maintain it because of the less maintenance costs and servicing.

Costs can be reduced by leasing the car’s battery rather than having it included in the upfront price. Experts say leasing a battery costs between $69 and $138 a month with the advantage that it will be replaced for free at the end of its life.

Industry analysts say the falling cost of the lithium batteries that power electric cars will see car prices fall in the near future. In the meantime, subsidies have helped to drive the take-up of electric and hybrid cars.

3. Roads, electricity, and EV chargers are all in poor condition.

Infrastructural challenges such as weak electricity grids, bad roads, and a scarcity of public e-chargers continue to plague the continent. While electricity grids in Europe have been able to cope with the rise of electric mobility, many African countries’ electricity systems are already feeling the strain. As a result of frequent blackouts in some countries, consumer demand for electric vehicles may be limited as a result of reduced access to transportation. In Nigeria, the average access to electricity is approximately 12 hours per day and the absence of publicly accessible EV charging stations in the country.

4. The cost of living is lower than the national average.

The cost of electric vehicles has decreased dramatically over the years thanks to advancements in battery technology and significant investment in EV startups, making purchasing an EV more affordable. However, despite falling battery costs and the promise of long-term savings from lower fuel and maintenance costs, the upfront costs of electric vehicles remain out of reach for the majority of Africans. Cox Automotive estimates that the average cost of a new electric vehicle is approximately $55,600 (N23M). This is significantly higher than the average yearly salary of N2M earned by the average Nigerian living in Lagos, which is significantly lower.

5. Fuel subsidies

The transition to electric vehicles might cause a threat to Great Britain with a loss of approximately $6.8 billion per year in fuel duty within eight years, owing to its transition to electric battery vehicles. As fuel, duties comprise about a third of annual revenues in the country, this poses a major threat to tax income used to operate, maintain and enhance motorways, with electric vehicles already representing more than 10% of the domestic market.

Similarly, fuel taxes also serve as a major source of state revenue for several African countries. In Ghana, for example, at least seven different taxes on fuel comprise $0.40 of the price of fuel, per liter. These include an energy fund levy, sanitation and pollution levy, price stabilization and recovery levy, road fund levy, energy debt recovery levy, and a special petroleum tax.

As a result, fuel costs are significantly higher for Ghanaian consumers at approximately $1.14 per liter, compared with neighboring Nigeria ($0.619), Togo ($0.91), and Ivory Coast ($1.076). Reduced fossil fuel consumption through the proliferation of EVs, therefore, would result in reduced tax income, which would need to be recovered by other means.