Africa’s EV future navigates global shifts and local opportunities

The electric vehicle (EV) landscape in Africa is undergoing a significant transformation as countries on the continent strive to balance clean mobility goals with external market dynamics. Rising fuel costs, particularly in nations like Ethiopia, are pushing the shift towards local power sources for transportation needs. To delve deeper into these dynamics, CNBC Africa's Tabitha Muthoni spoke with Hilina Legesse, President of the Addis Ababa E-Mobility Association. Despite the evolving global trends, Legesse believes that the impact of these changes on the African EV ecosystem is still at an early stage. She emphasizes that the adoption of EVs in countries like Ethiopia was primarily driven by economic factors, such as the escalating prices of fuel, rather than proactive policy support. Legesse acknowledges that while there may not be an immediate significant impact, African nations must not solely rely on external policies to drive EV adoption within the continent, urging for localized efforts to sustain the momentum over the long term. Reflecting on the potential implications of the US reducing its reliance on African critical minerals for batteries, Legesse highlights the necessity for African countries to enhance their position in the global battery supply chain. She emphasizes the importance of establishing processing facilities within the continent to add value to raw minerals before export, thereby boosting Africa's relevance in the global EV ecosystem. Furthermore, the localization of manufacturing and the development of a local supply chain for minerals are crucial steps towards ensuring Africa's self-sufficiency and capacity to export finished goods in the future. In light of China's dominance in EV production and the ongoing tensions between the US and China, Legesse downplays the direct impact of geopolitical factors on Africa's access to affordable EVs and battery technology. She sees an opportunity for Africa to capitalize on the gap left by global tensions by promoting initiatives like the African free trade agreement and the establishment of EV assembly plants and battery manufacturing facilities within the continent. By leveraging its mineral resources and fostering the necessary skills and capacity, Africa can enhance its local market relevance and reduce dependence on external suppliers. While potential lower global prices resulting from US policies could influence EV adoption in African markets where fuel costs heavily influence vehicle choices, Legesse remains optimistic about the resilience of the EV market in countries like Ethiopia. She points out that the significant cost savings offered by electric vehicles compared to traditional fuel-powered vehicles make EVs an attractive and sustainable option for consumers, reinforcing the lasting potential of EV adoption in the region.