A far cry from Tesla’s troubled year on the stock exchange, electric vehicles (EVs) are creating a huge boom — or more literally, kicking up dust — in many African cities, including Kampala, Uganda.
When Constant, a boda boda (motorcycle taxi) rider, pulls up for me on the road, the only sounds his bike makes are the sound of the chain running and the crunch of the wheels. Where you would normally find a hot, dusty silver engine behind the front wheels, there is instead a black box containing a battery that can last for around 80-100km, depending on the hill and traffic. Masu.
This is the face of electric mobility in Africa, and Constant’s electric bikes may look small but have huge potential.
Why is this promise so moving?
The prospects for the adoption of e-mobility (a more inclusive term than electric vehicle, considered in the US and EU to refer to only a small number of car types in most African countries) are increasing from the international level to the street level. It’s wide-ranging.
The transition to e-mobility will have a positive impact on African economies, which are largely dependent on imported refined gasoline, depleting countries’ foreign exchange resources. Instead, electric cars consume locally produced electricity, primarily from the national grid, and also use additional local solar power generation. Moreover, many African countries’ electricity grids are already very clean. For example, Uganda and Kenya already have 95% and 80% clean grids, respectively, while Ethiopia, which just became the first country in the world to ban imports of internal combustion engine (ICE) cars, has a 99% clean grid. A grid is in place. Cent Clean Grid.
The story of e-mobility in Africa is not currently about cars. This concerns motorcycles, tuk-tuks and buses, with the former accounting for more than 95% of the EVs deployed in East Africa.
While the US, EU, and China primarily see EVs as a means to reduce greenhouse gas emissions, African countries account for less than 1% of the world’s historical emissions (with the exception of former superpower South Africa), and this disaster have little responsibility for. It was a white supremacist regime for most of its history anyway). But electric cars also eliminate roadside air pollution. Air pollution kills tens of thousands of Africans each year and disproportionately affects the poor, who cannot afford the air-conditioned SUVs driven by the elite.
Finally, the story of e-mobility in Africa is not about cars at the moment, although some may point to the cost comparison between used ICE cars and electric BYD seals, which most African economies rely on. . This concerns motorcycles, tuk-tuks and buses, with the former accounting for more than 95% of the EVs deployed in East Africa. Financial mechanisms such as battery exchange systems and pay-go bus systems deduct the cost of batteries from the retail price, making the initial cost of a motorcycle or bus comparable to a gasoline-powered vehicle. For example, with the battery replacement model, a motorcycle or tuk-tuk that is running out of energy can simply replace its depleted battery with a fully charged one and continue driving. This saves users money over time, reduces range anxiety, and ensures that the battery replacement company is responsible for battery maintenance and health. Constant and other e-bike riders see their take-home pay increasing by about a third, from about $25 a week to $36 a week.
find the boost buttonAccelerating the transition to EVs in Africa requires three key pathways: tax incentives and industrial financing in the short to medium term, and grid construction in the long term.
Countries such as Togo, Ghana, Benin, Uganda, Tanzania, Rwanda and Kenya have all passed tax incentives for electric vehicles, helping to reduce upfront costs for consumers. However, some of these incentives are included in annual finance bills, which have since been removed or replaced, or, as in Kenya, caught up in the parliamentary arson riot.
In Africa, it can take between six months and a year for an investment to lead to a vehicle on the ground, and the tax regime in place at the time the vehicle was ordered may no longer be available by the time the vehicle arrives on the ground. . One Ugandan entrepreneur had to pay an additional 25% as a result of this instability. The government should pass tax incentives on a clear schedule. This could apply, for example, to the first 100,000 electric bikes in the country, or over the next four years. But it is necessary to provide certainty for both entrepreneurs and consumers.
They may not have the shine of a BYD seal or a Tesla Model S, but electric bikes in particular offer undeniable benefits to both household and national economies.
Industrial financing is a necessary second pillar. While e-mobility startup funding is increasing, it still falls short of the tens of billions needed to transition the entire industry across Africa. Efforts are needed to bring in the Asian manufacturers that dominate Africa’s ICE motorcycle market and connect them with local swap station providers. Concessional debt financing is also key. Many African markets face tough interest rates, narrowing the path to growth, especially for local businesses. Local ownership is key to this fundraising effort. Until now, Western venture capital firms have provided most of the startup funding, but the transition to e-mobility is suboptimal given the further loss of autonomy for the US and EU. To ensure that Africa benefits from this transition at all levels, local pension funds and angel investors need to be involved.
Finally, national electricity grids remain underdeveloped in many countries. In some countries, like Nigeria, electricity is highly unstable, with Victoria Island’s wealthy residents receiving reliable electricity, but the majority of poor people experiencing constant power outages. Other countries, such as Uganda and Tanzania, have significantly improved their electricity grids, but rural areas remain largely unconnected. It is important that African countries expand and strengthen their electricity grids to ensure that the rural poor are not left behind.
Furthermore, the introduction of EVs will increase consumption of the grid, and all countries will need to add electricity generation to meet this new demand. A combination of solar power, enhanced geothermal power generation, regional interconnection and storage will be key to meeting new demands.
E-mobility is a reality in Africa today. They may not have the shine of a BYD seal or a Tesla Model S, but electric bikes in particular offer undeniable benefits to both household and national economies. The demand exists. All that is missing is a supply of vehicles and battery swapping stations. Governments and investors must step up to give e-mobility the boost it needs to reduce fuel dependence, clean the air on our streets, and leave a little more note in riders’ jacket pockets.