Achieving scale might take a while
According to the African Association of Automotive Manufacturers (AAAM), total new vehicle sales in Africa was 1.1 million in 2019. The International Organization of Motor Vehicle Manufacturers (OICA) puts the 2019 new vehicles sales figure for Africa at about 870 thousand. Between the two sources, a median figure of 1 million new vehicle sales per annum is apt.
African EV sales data is scarce, however, often lumped in an “others” classification in most analysis because of its currently small market size. South Africa is the only African market worthy of enumeration at the moment. In 2019, there were about 1,000 EVs in South Africa. And even as the AAAM projects there could be as many as 5 million new vehicle sales in Africa by 2035, how much of that would be EVs is anyone’s guess.
Besides, judging from the 15-year passenger car sales trend, the 5 million units projection by the AAAM seems somewhat optimistic. Instead, the historical trajectory supports an annual average of 1 million new car sales over the next ten years. We use the Kenyan EV target of 5 percent of all registered cars by 2025 as a lower bound and the more ambitious 30 percent Nigerian target as an upper bound. A 5-30 percent EV adoption range by 2030 amounts to 50,000 to 300,000 new EV sales by 2030, when the EV transition is expected to have taken high gear globally.
According to the IEA, 68 out of every 1000 urban households in Sub-Saharan Africa own an air conditioner and 125 out of every 1,000 urban households own a car. In other words, 12.5 percent of urban African households would likely be able to own and maintain an EV. Thus, middle-class African consumers who are able to afford stand-by generators or grid electricity to power multiple air conditioners and refrigerators at their homes and offices, of which there are clearly more than a few, would be able to regularly charge and maintain a regular EV model.
Besides, smart adaptive product design and support by EV manufacturers could accelerate adoption beyond what could reasonably be projected at the moment. Take the recently launched Hyundai Kona EV model in Nigeria, for example. It can be charged from any regular electric socket with enough wattage for powering air conditioners and refrigerators. And while a typical charge can take 8 to 10 hours with a regular charger, a faster charger would do the task in 4 to 5 hours.
Even so, the EV sales trend in South Africa, the only significant market currently, is not encouraging. Annual new EV sales in South Africa of 70 to 160 units over the past three years hardly suggest scale would be plausible for any manufacturer or importer anytime soon. The historical trend suggest EV volumes are likely to remain in trickles for the decade to 2030, at least. Likely ascendant EV markets like Nigeria and Kenya would still require some time to be well-established. And judging from the South African experience, it might take a while for that to happen.
However, currently top African ICEV markets like Egypt, Algeria, and Morocco have huge potential. There is demonstrable government support for EVs in Egypt, especially for use as city taxis. In June 2020, Egyptian authorities mooted a plan for an annual EV production of 25,000 units by 2021 and signed an MoU with China’s Dongfeng Motor Corporation in this regard in January 2021. There is also evidence of some traction in Morocco. The case of Algeria is relatively lacklustre, even as authorities signalled interest as early as March 2020.
Thus, while EV viability is clearly assured in light of the small strides and feats already being recorded, scaling up to current continental ICEV levels may not begin to be significant until from 2040 onwards. And even as dumped ICEVs by EV transitioning economies are expected to compete with EVs for African wallets, likely innovations that would significantly reduce the cost of acquiring EVs could still turn the tide in favour of electric cars. Thus, the International Council on Clean Transportation (ICCT) target of 39 percent of all of Africa’s stock of light duty vehicles being electric by 2050 seems plausible. For that time range, the ICCT estimation could turn out to be even conservative.
An edited version of this article was first published by Nanyang Business School’s NTU-SBF Centre for African Studies, Singapore. References, figures and tables are in the original article. See link viz. https://www.ntu.edu.sg/docs/librariesprovider100/aci-latest/2021-47.pdf?sfvrsn=7652eb60_2
Dr Raji is a non-resident senior associate with the Africa program at the Centre for Strategic and International Studies, Washington D.C. (Twitter: @DrRafiqRaji)
