isnaini azizah
Electric vehicles could be economically competitive in Africa sooner than anticipated, with a new analysis suggesting that by 2040, electric vehicles (EVs) could boast a lower total cost of ownership than their gasoline-powered counterparts across much of the continent, especially when integrated with off-grid solar charging solutions. While only 1% of new cars sold in Africa are projected to be electric in 2025, this shift signals a significant potential transformation in the African automotive landscape.
The path to widespread EV adoption in Africa is currently paved with substantial challenges. Many nations grapple with an often unreliable electricity grid, a scarcity of charging infrastructure, and limited access to affordable financing options. These hurdles have led many previous analyses, including those from the International Energy Agency (IEA), to predict that fossil-fuel vehicles would remain dominant in Africa at least through 2050. However, this latest research, published in the prestigious journal Nature Energy, offers a more optimistic outlook, driven by the rapidly decreasing costs of battery technology and the vehicles they power.
The study, which examined the total cost of ownership (TCO) over a vehicle’s lifespan, meticulously factored in not only the initial purchase price but also financing costs and the expenses associated with fueling or charging. Importantly, the researchers deliberately excluded policy-related financial impacts such as taxes, import duties, and government subsidies, opting to concentrate solely on the fundamental economic drivers. Their findings indicate that as battery and vehicle manufacturing processes continue to improve and benefit from economies of scale, EVs are poised to become more affordable annually. Consequently, by 2040, EVs are expected to be cheaper to own than equivalent gasoline-powered vehicles in most African countries and across most vehicle segments, including electric two-wheelers, cars, larger automobiles, and even minibuses. This economic parity is also anticipated to extend to vehicles running on synthetic fuels.
The economic viability of EVs is projected to emerge even sooner for two-wheeled vehicles like electric scooters. Due to their smaller and less expensive batteries, these are predicted to achieve cost competitiveness by the end of the current decade. Conversely, the segment presenting the greatest challenge for EV cost parity is small passenger cars, according to Christian Moretti, a researcher at ETH Zurich and the Paul Scherrer Institute in Switzerland, and a co-author of the study.
A critical barrier to EV uptake in many African regions is the reliability of the electricity grid. Bessie Noll, a senior researcher at ETH Zurich and a lead author of the study, highlights that for EVs to become a practical and economically sound choice, innovative charging solutions are essential. The study therefore incorporated the cost of purchasing and installing solar off-grid charging systems. These systems typically include solar panels, battery storage to ensure charging availability even when the sun isn’t shining, and inverters to convert electricity for EV charging. The increasing prevalence of mini-grids and other standalone power systems across Africa, often incorporating solar and energy storage, suggests that these could become a primary charging method for EV owners on the continent in the future.
Financing costs represent another significant impediment to EV adoption in Africa. Noll points out that in some instances, the cost of financing can exceed the initial purchase price of the vehicle, dramatically inflating the overall cost of ownership. While in regions with low borrowing costs, the higher upfront expense of an EV can be spread out over its lifespan with minimal impact, and the lower charging costs eventually lead to overall savings, the situation in many African countries is more complex.
In certain African nations, political instability and economic uncertainty contribute to higher borrowing costs. These elevated financing expenses affect the affordability of all vehicle types, but they disproportionately impact EVs due to their higher initial price point compared to equivalent gasoline vehicles. This means that the total interest paid over the financing period is significantly greater. Furthermore, banks may perceive EVs as a higher risk due to their newer technology, potentially leading to higher interest rates compared to financing conventional vehicles, as noted by Kelly Carlin, a manager at the Rocky Mountain Institute, an energy think tank focused on carbon-free transportation.
The economic landscape for EV affordability varies considerably across the continent. The study identifies South Africa, Mauritius, and Botswana as countries where financing conditions are already nearing the point where EVs can achieve cost parity with gasoline cars. However, in higher-risk countries, such as Sudan, currently experiencing civil war, and Ghana, which is recovering from a significant economic crisis, financing costs would need to be substantially reduced for EVs to become economically competitive.
Making EVs an affordable option is universally recognized as the crucial first step towards increasing their presence on African roads and globally. Nelson Nsitem, lead Africa energy transition analyst at BloombergNEF, an energy consultancy, emphasizes that consumers will embrace these technologies once they become economically competitive. Solar-based charging systems, as explored in the study, have the potential to alleviate the constraint of grid access and accelerate EV adoption. Nevertheless, Nsitem also underscores the ongoing need for more comprehensive charging infrastructure, a considerable challenge in many countries where the existing grid requires substantial upgrades to enhance its capacity and reliability.
Globally, the trend of increasing EV adoption is undeniable. "The global trend is unmistakable," states Carlin. While the pace of this transition may differ across various regions, the underlying momentum is strong and persistent, indicating a transformative future for personal transportation in Africa and beyond. The convergence of falling EV costs, innovative charging solutions like solar off-grid systems, and improving economic conditions in select nations paints a compelling picture of a future where electric mobility is not only environmentally responsible but also economically advantageous for African consumers.
