Can carbon credits drive e-mobility adoption in Africa?

From the newsletter

It's difficult to find precise data on the number of vehicles in Africa. Estimates suggest there are between 26 to 38 million cars and around 30 million motorcycles. However, this number is rising due to increasing urbanisation. The transition to EVs in Africa presents an opportunity to generate revenue through carbon credits given Africa's renewable energy potential.

• Motorcycles in particular roam almost everywhere in African cities and rural areas. They are the common and convenient mode of transportation.

• They are leading in the transition to EVs, and are set to become carbon credit generators in rural mini-grids.

More details

• Several e-mobility companies in Africa are successfully leveraging carbon credits to finance their operations and expansion.

• MAuto, a company operating electric motorbikes in Benin and Togo, generated an estimated USD 5,000,000 in revenue over three years through a carbon credit transaction.

• EcoKada, a Nigerian delivery platform using e-bikes, partnered with Zeroca to generate carbon credits, allowing them to offer cheaper rates to customers.

• Ampersand, a Rwandan electric motorcycle company, is exploring carbon credit generation to finance its operations and expansion.

• More opportunities exist for rural mini-grids, which typically have low consumption. Mini-grids can serve as charging stations for electric tractors, electric motorcycles, and three-wheelers used for transportation and delivery services in rural areas. They can also act as battery-swapping stations for electric farm equipment and generate carbon credits.

Our take

• While the potential of carbon credits to drive e-mobility adoption in Africa is evident, scaling up these initiatives remains a key challenge.

• Further investment in charging infrastructure and grid capacity is crucial to support widespread EV adoption.

• Collaboration among governments, private sector actors, and carbon credit developers is crucial for creating a thriving e-mobility ecosystem in Africa.