Who in Africa is ready for EVs?

October 25, 2024

From the newsletter

A new study released today by Energy for Growth Hub shows that while EVs are transforming global transportation, Africa's role in this revolution is still taking shape.  The study titled "Africa EV Readiness and Impact Index"  analyses 48 African countries, measuring their preparedness for and potential benefits from EV adoption. 

  • From the study, only 12 African countries show high readiness for EV adoption, with strong policies, infrastructure, and market conditions.

  • They include Seychelles, Morocco, Mauritius, South Africa, Tunisia, Egypt, Rwanda, Cabo Verde, Ethiopia, Kenya, Ghana and Namibia.

More details

  • The study classifies African countries into three categories: emulators, innovators, and stragglers. 

  • “Emulators” are countries with high EV readiness indexes, such as Seychelles and Morocco. These countries are following EV trends in developed countries and have higher motorization rates, more mature power grids, and growing charging networks. 

  • Despite their leadership position in EV readiness, emulators face challenges in accessing finance. Less than a fifth of the population over the age of 15 in these countries has borrowed from formal financial institutions or used mobile money accounts. 

  • This limited access to finance affects even Africa's leading EV players like Morocco, where less than 5% of the population has access to formal financial institutions.

  • Some emulators rank low on the EV impact index—a measure of the potential benefits of EV adoption using several indicators such as carbon emissions, urban pollution, fossil fuel import dependence, subsidy burdens, and power utility revenue generation—as they rely heavily on non-renewable energy sources for power generation.

  • "Innovators" like Kenya, Rwanda, and Uganda are pioneering unique approaches, particularly with two and three-wheeler EVs and innovative financing.

  • These innovators face challenges with weak grid infrastructure and low motorization rates, limiting market size.

  • "Stragglers" face multiple challenges, including weak grids and low motorisation rates, but also have a high potential for positive impact.

  • Most of the countries classified as stragglers lag in EV readiness, with few having national EV targets or sufficient charging stations.

  • Despite challenges, many African countries have a high potential for EV impact, particularly in improving urban air quality and reducing reliance on fossil fuels.

  • Countries with low readiness can kick-start their EV sectors with targeted incentives, grid investments, and support for EV startups.

Our take

  • African countries have started to show a willingness and readiness to adopt EVs, with many, like Uganda, Tanzania, Egypt, and Nigeria, formulating EV-friendly policies. These policies provide tax exemptions and other incentives to encourage EV adoption. 

  • African automotive leaders like Morocco and South Africa are also formulating policies to support local EV production, targeting both local and export markets.

  • The availability of Africa's abundant renewable energy resources offers even more compelling reasons for EV adoption. Countries like Kenya, Uganda, and Ethiopia already have over 80% of their electricity grids powered by renewable sources, with the added option of building off-grid solar charging stations.

  • The potential for Africa's transition to EVs is immense. Given that most countries import their fossil fuels and spend a significant amount of foreign exchange on these imports, transitioning to EVs could enable them to reduce their trade deficits and improve their financial stability.