By Olamide Francis
The electrification of transport is presently one of the significant patterns of the 21st century, and the business sectors are responding: the 700% year-to-date flood in China-based electric carmaker NIO’s stock worth and Tesla’s 415% growth since January 2020 show that investors energy about electric vehicles is building.
In spite of these mishaps presented by Coronavirus, EV request is again expected to ascend as indicated by Bloomberg New Energy Account (BNEF), which sees improved batteries, all the more promptly accessible charging framework, new business sectors, and value equality with internal combustion engine (ICE) vehicles as significant drivers.
The investigation finds that EVs hit 10% of worldwide passenger vehicle deals by 2025, ascending to 28% in 2030 and 58% in 2040. General Engines GM +0.4% declared an arrangement to put $2 billion into six homegrown assembly plants committed to assembling EVs, and has since divulged its all-new electric Hummer.
China represents the biggest portion of worldwide EV deals and plans to grow further as it decreases energy imports, addresses its poor metropolitan air quality, and pulls in investors into its homegrown automobile industry. Interest for electric vehicles in China reached 125,000 units in September, a frightening mid-pandemic bounce of 99.6% from the earlier year.
Tesla was the main unfamiliar carmaker allowed to open an industrial facility in China without a Chinese majority partner. In the wake of opening its giga-production line in Shanghai, the organization turned into the biggest dealer of EVs in the nation, reducing costs on numerous occasions to fit the bill for government endowments. Tesla, has as of late, beat Wall Street expectations, getting a Q3 income of $8.77 billion.
Importation of used vehicles into Africa
Recycled vehicles have been finding their approach to African markets for a long time. The market for used vehicles in Africa is ready for additional development as Africa is by a long shot the most un-mechanized area on earth with just 44 registered vehicles for every 1,000 occupants. The worldwide average, then again, remains at 180 vehicles for every 1,000 occupants – which mirrors the gigantic development potential on the lookout for utilized vehicles in the African market in the future. Interest for utilized vehicles in numerous African nations is taking off because of an arising African middle class and expanding levels of expendable earnings. Nigeria is the greatest market for utilized vehicles in Africa and is additionally quite possibly the most prosperous in the Sub-Saharan locale.
Consistently, around 800,000 used vehicles are sent out to the top ten sub-Saharan African shippers from Japan, EU, and the US. Japan, alone, exports used vehicles to at any rate 13 African nations by means of the UAE. Its market is spread across eastern and southern Africa with Kenya, Uganda, and Tanzania having an enormous client base.
The European Association is the second biggest exporter of used vehicles to Africa, providing to at least 15 nations in North Africa. Germany is a significant exporter of used vehicles to Africa receiving over half of EU vehicle fares to Africa (53 percent).
According to regions, West Africa is obviously in front of the remainder of Africa as it imports more than 900,000 used vehicles consistently, which is roughly 70% of all out imported vehicles in Africa. Central Africa contributes the least to used vehicle business and imports a normal of 65,000 vehicles every year. Curiously, it is somewhat higher than what Kenya, alone, imports in a single year on an average.
The implication of EVs on used vehicles in Africa
Africa is urbanizing faster than any other continent, at a rate of 4% every year, compared to the global average of 2%. Its rapidly growing urban population continues to strain existing infrastructure – transport and energy, in particular.
Firstly, sub-Saharan Africa’s transport is almost entirely fuel-based. This creates a cost burden for citizens and a fiscal burden for countries. To protect consumers from ever-increasing fuel prices, African governments heavily subsidize fuels, at an average cost of 1.4% GDP.
However, these subsidies disproportionately benefit higher-income households. As cities expand, oil demand grows and the problems of fuel scarcity and cost loom larger. Pollution from fuel-based transport is also a major contributor to growing air quality concerns in African cities.
Secondly, the demand for electricity in Africa is increasing rapidly. It is anticipated to quadruple by 2040. Many African countries are looking to low-cost renewables with abundant potentials, such as solar and wind, to grow grid capacity. Energy storage that allows electricity to be saved and used at different times of the day is a key component for ensuring the viability of renewables in Africa.
This is where electric vehicles (EVs) come in. Sub-Saharan African (SSA) countries urgently need a transport alternative to stave off the growing burden of fuel dependency and subsidies, as well as an electricity storage solution to leverage their abundant renewable energy resources. EVs, powered by electricity and running on battery storage, offer a potential solution to both these problems. Furthermore, as EVs produce no direct emissions through the exhaust pipe, they can improve the air quality of Africa’s congested cities.
Internationally, the EV market is already growing at exponential rates, with more than 3 million vehicles sold globally. Every major automobile manufacturer now has hybrid and full plug-in EVs in commercial production. By 2040, 54% of new global car sales and 33% of the world’s car fleet will be electric, according to experts.
China and India – the world’s largest and fifth-largest automobile markets, respectively – are great examples of what is possible in emerging markets with the right policy interventions. Both aim to switch to EVs to improve their energy security, reducing long-term dependency on imported oil (in 2016, this stood at around 66% of crude oil consumption in China and 80% in India).
Another key driver for their adoption of EVs has been both countries’ rapidly worsening urban air quality. India is seeking a completely electrified vehicle fleet by 2030. China’s government anticipates that ‘New Energy Vehicles’ (NEVs) will reach 5% of total vehicle market demand by 2020 and 20% by 2025. Both countries are implementing policies and subsidies to realise these goals. The Chinese government has already spent $3 billion on promoting EVs.
This is the perfect time for African countries to explore the potential of EVs. Many SSA countries will be making large investments in power capacity in the next decade. Vehicle ownership will rise dramatically over that period, given population growth, increased urbanization and a rising middle class. SSA countries have the opportunity to pursue an energy-secure and lower-cost path, taking advantage of the strong global EV trend, before locking themselves into greater dependency on imported fuel and a carbon-intensive energy grid.
That said, there are challenges that affect the industry globally, as well as obstacles specific to SSA countries. Global issues include the need for significant infrastructure investments (such as dedicated charging stations), grid integration and planning requirements, as well as changes in consumer attitudes and behaviour.
The unique challenges to viability in the SSA region are exemplified by the recent debate around electrifying Kenya’s new rail system. Firstly, a large EV fleet would require a reliable power supply and reasonably low electricity prices, both of which could be an issue in SSA countries. Electricity blackouts occur on a daily basis in 30 out of the 48 countries, and electricity prices can be more than double those in the US and China.
There is also the environmental issue of battery manufacture and disposal, which could be more challenging in SSA due to often relatively informal waste management systems. Lastly, international examples demonstrate that rapid EV adoption requires strong enabling policies, including tax incentives and subsidies, which is tricky given many competing priorities for limited government funding in SSA.
