According to Mordor Intelligence, Africa’s electric vehicle market could reach $21.39 billion by 2027.
- Similarly, the market for motorcycles in the continent will grow to $5.07 billion by 2027.
- Africa has at least a fifth of the world’s metal reserves critical for the energy transition, which includes about 19 per cent of those needed for electric cars.
E-mobility in Africa is gaining momentum, largely driven by the daunting climate change crisis, fueling the need to decarbonize transport systems. African countries remain in pursuit of e-mobility solutions and advancement to low-carbon economies. Africa’s endowment with minerals key to the global green transition offers a significant advantage.
According to the 2023 UNCTAD Economic Development in Africa report, as the global push for cleaner energy intensifies, demand for such metals will soar. An electric car, for example, needs about six times more minerals than a traditional vehicle. Further, the report highlights that the continent has at least a fifth of the world’s metal reserves critical for the energy transition, which includes about 19 per cent of those needed for electric cars.
Growth in renewable energy investments has also resulted in the demand for Electric Vehicles (EV), as well as electric motorcycles. According to Mordor Intelligence, Africa Electric Vehicle Market could reach $21.39 billion by 2027, from $11.94 billion in 2021.
Moreover, the market for motorcycles in Africa will grow to $5.07 billion by 2027 from $3.65billion in 2021. Africa’s several trading partners have set 2035, as the deadline for banning internal combustion engine vehicle sales.
To meet the growing demand, E-mobility startups have risen across the continent. They include: Rwanda’s Ampersand Electric Motorcycles; Shift EV in Egypt; BasiGo and Opibus in Kenya; eWAKA Mobility Limited; Zembo in Uganda; Mobility for Africa in Zimbabwe; South African Forever powered and Magutsa energy.
Why Africa needs to decarbonize transport
Undoubtedly Africa is already bearing the brunt of the climate change crisis, evidenced by the occurrence of natural disasters. In the year to June, clmate-induced natural disasters hit different countries. Floods hit South Africa, Rwanda, Angola, Cameroon, Ethiopia, Uganda and DRC early 2023. Tropical Cyclone Freddy that hit Mozambique and Malawi in February and March goes down in history as the third-deadliest tropical cyclone recorded in the Southern Hemisphere. Moreover, wildfires, landslides and the locust invasion have plagued several countries in East Africa in 2020.
Furthermore, the ongoing drought in the Horn of Africa underscores the gravity of the climate crisis. As such, the climate change crisis could not be more urgent to mitigate especially for Africa.
Air pollution from transport systems
By cutting air pollution, African governments could prevent 200,000 premature deaths yearly by 2030 and 880,000 deaths annually by 2063. Moreover, they could reduce carbon emissions by 55 per cent, methane by 74 per cent, and nitrous oxide by 40 per cent by 2063. This is according to a report by the Climate and Clean Air Coalition (CCAC), United Nations Environment Programme (UNEP), and the African Union Commission.
The report titled An Integrated Assessment of Air Pollution and Climate Change for Sustainable Development in Africa, identified transport as a key area for African governments to prioritize in fighting climate change, preventing air pollution and protecting human health.
The report indicates that air pollutants and greenhouse gases often share the same sources, and are more dangerous when combined. Some pollutants including methane and black carbon, directly contribute to both impacts simultaneously. Consequently, air pollution is a climate and health emergency around the world.
Pollution remains the greatest environmental threat to human health, responsible for about 7 million deaths annually across the world. The report reveals that due to Africa’s vulnerability to climate change, preventing emissions from short-lived climate pollutants, like methane and black carbon, will save lives and protect the environment. The report recommends actions for African governments to adopt. Sifting to cleaner vehicles remains key among them as well as safe and affordable public transport.
State of Africa’s E-Mobility Market
A transport revolution is underway in Africa. Governments, private institutions, entrepreneurs and innovators, continue to explore possibilities of sustainable mobility. Despite lower penetration of EVs in Africa, the tide is quickly changing. Change will come as more countries integrate e-mobility into their climate action plans.
According to Mordor Intelligence, only a few companies dominate the African electric car market, including Volkswagen AG, BMW AG, Stellantis N.V and others. The report reveals that as the region’s demand for electric vehicles grows, the companies will form alliances, joint ventures, and acquisitions with significant industry competitors.
African countries like Egypt, South Africa and Rwanda already have pilot projects for sustainable vehicles. Egypt remains a leader in Africa’s transport transition. Just recently in June 2023,the country’s Supreme Council for Vehicle Construction, approved initiatives by two national electric mobility companies. The goal is to convert more than 100,000 internal combustion vehicles to electric drives in the next five years.
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Nigeria is also among countries leading e-mobility transition. Recently, Metro Africa Xpress Inc. (MAX); a Nigerian e-mobility platform and electric vehicle assembler, with support from the UK-funded Manufacturing Africa program, raised $31 million to expand the assembly of electric two- and three-wheelers. South Africa is also not left behind in e-mobility. The country launched a green transport plan in 2018, in an effort to decarbonize the transportation industry.
According to African E-Mobility Alliance (AFEMA), Kenya, East Africa’s powerhouse has an estimated 40 e-mobility startups. Hitherto, they have attracted $52 million in capital finance, which is the highest amount in Africa. Currently, the country only has only 350 EVs on its roads. In sharp contrast, Tanzania now has at least 5,000 EVs but just 11 e-mobility businesses, with a total funding raised to date of just over $1 million.
In terms of e-mobility, Rwanda has roughly 900 EVs on the road,. Uganda, with nine startups that have raised $5 million, puts it ahead of Kenya. This is partly because the private sector primarily runs the EV sector in Kenya. The EV sectors in Tanzania, Rwanda, and Uganda, are largely fueled by their respective government.
Morocco, an industry leader in automotives is also becoming Africa’s e-mobility hub; named as “one of the world’s fastest growing automotive hubs.” In 2023, Morocco and Chinese-European electric mobility company GOTION High-Tech, signed a Memorandum of Understanding (MoU), to establish the first Gigafactory in Africa, dedicated to producing electric car batteries and energy storage systems.
The project, with an estimated cost of $6.4 billion, aims to strengthen Morocco’s position as a leader Africa’s automotive industry in Africa, and generate around 25,000 job opportunities over the next decade. The Gigafactory will not only boost Morocco’s renewable energy and electric transport sector, but also solidify its reputation as an automotive industry powerhouse.
It holds the potential to create a comprehensive battery production solution. This at a capacity of 100 gigawatts per year, contributing to the country’s commitment to sustainable development. The choice of Morocco as an investment destination by GOTION High-Tech, is a testament of the country’s expertise in the sector.
The project will additionally stimulate economic growth. It also reflects the increasing global demand for electric vehicles, and the need for localized battery production facilities. The effects of this development extend beyond Morocco, potentially influencing the growth of the electric mobility industry in Africa as a whole.
Moroccan-British technology company Atlas E-Mobility Group, announced that it will unveil the first battery electric vehicle (BEV).It has been designed and manufactured in Africa with the aim of revolutionizing cost-effective, zero-emission mobility of the future. The London-based company, intends to build state-of-the-art manufacturing and development facilities in Morocco.
Africa’s Advantage in E-Mobility
Endowed with key rare earth metals (REEs) for EVs such as cobalt, bauxite, lithium, Africa has the potential to reach net-zero by 2050.Africa’s rich renewable energy resources, short daily travelled distances, and young workforce make the continent’s potential for electrification uptake strong.
The United States Geological Survey (USGS) data on global mineral reserves shows that globally, Africa hosts key reserves of Cobalt (52.4%), Manganese (46%), Bauxite for aluminium production (24.7%), Graphite (21.2%) and Vanadium (16%).Currently, around 70% of the world’s cobalt is obtained from the Democratic Republic of Congo.
Additionally, Zambia holds the title of being the second-largest cobalt producer and sixth-largest copper producer in Africa. South Africa is home to over 70 per of the world’s manganese reserves, with deposits also found in the DRC and Gabon. Namibia hosts between 20 per cent and 40 per cent of global graphite reserves. Zimbabwe is among the top five largest lithium-producing countries, according to National Association of Automobile Manufacturers of South Africa (Naamsa) data.
In February, Naamsa highlighted in a thought leadership discussion document on new-energy vehicles (NEVs), that the country needs its ‘own mega battery factories’ to remain globally competitive. Meanwhile, mineral-rich countries like the Democratic Republic of Congo (DRC), Zambia, and Mozambique are also eyeing the market with big intentions of becoming significant suppliers of electric vehicle batteries. All these ambitious bids are largely country-based at the moment, with the exception of DRC and Zambia, having launched a joint bid.
Potential of Electric Motorcycles Market in Africa
There is a massive market for motorcycles in Africa especially in west, east and North Africa as well as electric two-wheelers, According to the Powering Renewable Energy Opportunities (PREO) programme; electric motorcycles are set to be a dominant force in sub-Saharan Africa’s sustainable mobility transformation.
Motorcycle taxis are also known as Boda Boda in most regions of Africa, including Nigeria, Uganda, Kenya, and other Eastern African countries; and they play a significant role in increasing two-wheeler sales. Two-wheelers are quicker and more easily maneuverable than four-wheeled vehicles, especially across sub-Saharan Africa, where countries often have poor-quality roads. Motorcycles also provide stable income opportunities. The ‘Charging Ahead – Accelerating e-mobility in Africa’ report from PREO, outlines the market opportunity for e-motorcycles to become a driving force, in the African e-mobility sector.
Furthermore, according to analysis by Mordor Intelligence, the market for motorcycles in Africa was worth $3.65billion in 2021, and is projected to grow to $5.07billion by 2027.PREO projected those electric motorcycles will play a significant role in the transformation of sub-Saharan Africa’s transportation system towards becoming sustainable.
Two-wheelers have become a popular answer to Africa’s increasing traffic congestion. Several advantages connected with two-wheelers, such as their compact size, ease of driving in poor road and traffic situations, and cost savings due to low fuel use, are important factors driving demand. E-mobility is gaining traction in the continent’s public and private sectors, driven by health and environmental concerns, as well as the need to reduce reliance on oil imports. From boda-bodas to motorcycle taxis, the e-mobility field of motorcycles and mobility scooters has seen a special boom in the region.
AfDB Supporting E-Mobility in Africa
The African Development Bank (AfDB), has been supporting the adoption of e-mobility in Africa. Earlier in the year, the bank’s Sustainable Energy Fund for Africa (SEFA), announced the provision of $ 1 million technical assistance grant, to the Green Mobility Facility for Africa (GMFA).
The Fund provides technical assistance and investment capital, to accelerate and expand private sector investments, in sustainable transport solutions in seven countries: Kenya, Morocco, Nigeria, Rwanda, Senegal, Sierra Leone, and South Africa.
The SEFA grant continues to support the creation of an enabling environment for Electric vehicles (EVs); the design of EV business models and guidelines for the public and private sector; the development of a bankable pipeline of e-mobility projects, regional coordination, and knowledge sharing.
This, amongst other upstream activities to help catalyze private sector financing, during the subsequent investment phase of the GMFA. The current rapid urbanization, coupled with population growth and economic development means the future demand for mobility solutions and vehicle ownership will increase.
How the AfCFTA can propel E-Mobility in Africa
Both EVs and ETW have the potential to leverage on AfCFTA preferences. Africa can leverage its abundant mineral resources and the AfCFTA, to become a force in the global electric vehicle supply chain through regional alliances. For Africa to become a formidable player in the global electric vehicle market, it should establish regional value chains to reduce investment barriers and cross-border trade expenses.
However, the continent currently operates at the primary level of the battery and electric vehicle value chain. Africa should establish manufacturing industries to produce electric car batteries. To boot, the continent should leverage the AfCFTA to harness market opportunities.
According to the African Development Bank, Africa has several key global vehicle supply chain strengths. These include existing expertise in internal combustion engines, proximity to key auto markets, access to raw materials, and participation in the AfCFTA.
However, the Bank emphasizes in its latest Economic brief dubbed ‘Strengthening Africa’s Role in the Battery and Electric Vehicle Value Chain,’ there is a pressing need for countries to rev up value addition of green mineral resources, to unlock Africa’s real potential. Experts underscore that this will require a collective effort from the continent. Over and above, continued investment in start-ups tackling barriers across the value chain, will play a pivotal role to maximize the full potential of Africa’s e-mobility sector.