Africa’s opportunity in the EV battery supply chain

November 06, 2024

From the newsletter

A report released yesterday in Lagos by the UK Foreign Secretary, Hon David Lammy, points out that the total annual demand for electric two/three-wheeler batteries in Africa is projected to reach 2.6 to 3.1 GWh by 2030. This growth will be driven by increasing commercial and private demand in different parts of the continent.

  • Western and Eastern Africa are expected to account for more than 70% of the total battery demand by 2030.

  • The two/three-wheeler fleet is projected to grow at a compound annual growth rate (CAGR) of around 7% between 2024 and 2030.

More details

  • The report examines the adoption of electric two/three wheelers in the African market, considering three potential adoption rates by 2030: low (10%), medium (15%), and high (40%).

  • The top five countries with the largest projected electric two/three wheelers annual sales by 2030 are Nigeria (456,000), Kenya (227,000), Egypt (175,000), Ethiopia (173,000), and Uganda (148,000).

  • Rwanda despite being a leader in the adoption will have only about 30,000 in 2030 due to its smaller population and fleet size compared to other countries.

  • Electric two/three-wheelers can be charged directly or through battery swapping, leading to different scenarios for battery demand analysis. 

  • In a conservative scenario, assuming a 50/50 split between battery swap and direct charging from 2024 to 2030, the battery demand would be 2.6 GWh. However, in the aggressive scenario, if battery swap adoption increases to 75%, the demand rises to 3.1 GWh.

  • This huge demand for battery manufacturers could justify building big battery factories to achieve economies of scale and rival competitors from China, Europe, and the USA.

  • But currently, most African countries lack the capacity for EV battery production. Though  there are promising developments in several African countries:

  • Morocco has attracted over $10 billion in investments across the battery value chain. Gotion Power early this month partnered with Saudi Arabia's ACWA Power to build an $800 million wind power plant to supply energy to its EV battery gigafactory.

  • South Africa, second to Morocco in vehicle manufacturing in Africa, is actively pursuing R&D and supporting local companies in establishing Li-ion battery gigafactories. 

  • Afrivolt is planning a Li-ion cell gigafactory to produce cathodes, anodes, and batteries for stationary storage and EVs. 

  • Balancell at the end of last month unveiled a new facility to scale up battery manufacturing capacity from 250 MWh to 1 GWh annually, targeting energy storage, electric mobility, and other applications.

  • In Nigeria, China’s Ming Xin Mineral Separation (MXMS) has started constructing the country’s first lithium-processing plant in Kaduna to manufacture EV batteries. 

  • Avatar New Energy Materials Company Limited also inaugurated a $500 million lithium processing facility.

  • While in Tanzania, EcoGraf is conducting a study to evaluate spherical graphite production for battery anode material processing.

Our take

  • Africa could potentially meet its EV battery demand, but not immediately. The upcoming projects are a sign of willingness to venture into this sector. However, these initiatives are still in their early stages and it's unlikely that Africa's production capacity will be able to meet the entire demand in the short term.

  • Africa can partner with established players for technology transfer and knowledge sharing, investment and funding and securing supply chains to ensure access to a pool of raw materials and achieve economies of scale.