Groundwork laid in Africa for a future of electric vehicles

Many South Africans who struggle every day to reach their places of work using minibus taxis or cars on congested motorways may find it hard to believe that an e-mobility revolution is about to happen. But a number of trends are moving in that direction.

E-mobility refers to electric vehicles (EVs), ideally powered by renewable energy sources, from twoand three-wheeled vehicles to cars and buses.

Recent developments in SA are laying the foundation of the future e-mobility revolution. This will help the country to meet its carbon reduction commitments under the Paris Agreement. Promising moves include the the SA Renewable Energy Masterplan’s publication, embracing battery storage and renewable energy. Work is under way on an EV master plan and one for critical minerals, which will draw on input from the departments of trade, industry & competition and of mineral resources & energy, among others.

In the private sector, BMW announced in June it will be manufacturing the BMW X3 as a plug-in hybrid for global export at its plant in Tshwane. In recent years, there has been a significant increase in imports of electric and solar batteries, as well as the growth of battery assembly in the country, especially in the Western Cape.

These local events are happening in parallel with African-wide initiatives. The African Continental Free Trade Area (AfCFTA) has prioritised the automotive sector and transport/logistics value chains. The African Association of Automotive Manufacturers is working with original equipment manufacturers (OEMs) on a continent-wide strategy. The African Export-Import Bank is supporting investments in the automotive sector with various programmes. Critical minerals and renewable energy are also likely to become priority sectors across the continent.

Certain jurisdictions are incentivising EV and emobility development. Rwanda has plans to phase in electric buses, cars and motorcycles, while recent steps by Kenya are particularly noteworthy. Its emobility task force, whose main objective will be to develop a national electric mobility policy covering all modes of transport (road, air, rail and maritime) and drive uptake of e-mobility; create an enabling environment; recommend fiscal and nonfiscal incentives to promote imports, local manufacture and assembly; provide a framework for the end of life and disposal; and provide a framework for the development of carbon credits, creation of standards and measurement of impacts on the economy and the environment.

Initially, EVs are more likely to find traction in public transport and two- to threewheelers before wide-scale adoption by the automotive sector. The evolution will be different in each African jurisdiction. For example, Kenya, Nigeria and Uganda have more two- and threewheelers than SA, so are likely to prioritise electrification of those. In SA, there may be greater potential in starting e-mobility in the public transport/delivery sectors, to stop a significant gap in the market.

There is a real opportunity for SA to help lead the emobility revolution in Africa, for several reasons. The continent urgently needs affordable and sustainable mobility solutions. The market for lithium battery cells could draw from local manufacture since Africa has many of the necessary raw materials.

SA has a mature automotive sector, including OEMs that export around the world, and it has signed trade agreements that facilitate exports to Europe, such as the European Partnership Agreement (with the Southern African Development Community) and the African Growth and Opportunity Act. In creating an EV export industry, SA can take advantage of the AfCFTA’s rules of origin, where 40% of local content from Africa is under discussion.

By developing a multifaceted e-mobility manufacturing sector, SA would help to speed up its own transition to a greener future and meet its climate change goals, promote industrialisation in line with Africa’s Agenda 2063 (the blueprint for inclusive and sustainable development over 50 years, emphasising youth and women), and create jobs.

As SA transitions away from internal combustion engine vehicles, it will be able to participate in other parts of the value chain beyond car maaking. There is opportunity to make the cells or batteries needed for EVs, and battery factories can stimulate local and regional economic growth. Battery factories could help to develop skills in engineering and attract talent to different regions where manufacturing takes place.

Of course, there are constraints on these plans. The most obvious is the lack of access to uninterrupted energy sources. Another is that it is difficult to raise seed capital for projects related to environmental, social and governance (ESG) improvement. More funding is needed in SA to support innovative start-ups.