Saturday, 02 March 2024

Ganizo | Technology

Africa is Ready for Making and Consuming Electric Vehicles (EVs)

The electric vehicle (EV) market in sub-Saharan Africa is ripe for growth, with high awareness of EVs among drivers and a favorable total cost of ownership.

However, high up-front costs and range anxiety are major hurdles to widespread adoption.

Recent research conducted by a team of experts engaged more than 70 organizations, including local EV start-ups, vehicle assemblers and distributors, electricity-distribution companies, commercial fleet owners, minibus associations, regulators, and financiers, and surveyed nearly 1,000 vehicle owners in major markets across the region. The findings indicate a strong opportunity for EV adoption, with a particular focus on two-wheelers, passenger cars, minibuses, and light commercial vehicles.

One key finding is that awareness of EVs is high among passenger-car owners, with over 90 percent of all vehicle owners surveyed in Nigeria and Kenya having heard of EVs. Most recognized that the technology is sound and better for the environment. However, the primary concerns among respondents were "range anxiety" and high up-front costs.

The total cost of ownership (TCO) of EVs is more favorable than that of internal combustion engine (ICE) vehicles, even in countries with fairly high electricity costs like Kenya.

The TCO becomes even more favorable the more a vehicle is driven, making commercial vehicles such as minibuses, vans, and two-wheelers more attractive for early transition to EVs.

Despite the favorable economics of EVs, few of the individuals surveyed understood the benefits. Some commercial fleet owners and bus associations expressed surprise at the favorable lifetime economics of EVs, indicating a lack of education and awareness of the long-term benefits of switching to electric power.

To overcome these barriers to adoption, governments and private sector organizations must work together to address range anxiety and high up-front costs.

This can be achieved by investing in EV charging infrastructure, offering tax incentives for EV purchases, and providing education and awareness campaigns to dispel myths and misconceptions about EVs.

In addition, local EV manufacturers and assemblers must work to bring down the cost of EVs through economies of scale and local sourcing of components.

This will make EVs more affordable for the average consumer and increase the number of EVs on the road, which in turn will drive demand for charging infrastructure and increase the overall economic viability of the EV market.

Given the favorable economics of EVs and the growing awareness of the environmental benefits, the future of the EV market in sub-Saharan Africa looks bright. With the right policies and investments in place, the region can lead the way in sustainable transportation and reduce dependence on fossil fuels.

Overall, the business opportunities for EV adoption in Sub-Saharan Africa are apparent and wide-reaching. With the right policies and investments, this region can lead the way in sustainable transportation and reduce dependence on fossil fuels.

The industry players, vehicle manufacturers and assemblers, and governments should work together to address the barriers to adoption, such as range anxiety and high up-front costs by investing in EV charging infrastructure, offering tax incentives for EV purchases, and providing education and awareness campaigns to dispel myths and misconceptions about EVs.

Source: Behaviour Report