The Challenge
Sub-Saharan Africa remains largely reliant on fossil-fuel powered internal combustion engine (ICE) motorcycles for transportation and employment opportunities. The reliance on ICE motorcycles comes with relatively high running costs and long-term environmental and health implications from the use of fossil fuels.
Africa has the highest population-weighted annual average PM2.5 concentrations, aggravated by an increasing number of ICE vehicles.
The Opportunity
Transitioning from internal combustion engine (ICE) vehicles to electric vehicles (EVs) presents a significant opportunity to advance mobility for sustainable economic development, improve livelihoods, reduce greenhouse gas emissions and address critical local air pollution challenges.
Market projections suggest that e-mobility adoption could reduce CO2 emissions from transport in sub-Saharan Africa by 20-30% in 2040.
Electric vehicles (EVs) have a lower total cost of ownership relative to internal combustion engines, driven by lower operation and maintenance costs. This leads to increased income, improved livelihood and supports economic development.
Barriers to Address
E-mobility uptake is slowed by multiple barriers:
Access to finance
E-mobility is capital intensive, and lack of access to finance for working capital, inventory and supportive infrastructure is a barrier to scale up and expansion of assembly lines. The required financing can be inaccessible for start-ups due to their lack of creditworthiness and nervousness of financiers. Africa’s e-mobility transition is currently underfunded, with a 50% investment gap relative to needs over the next two decades.
Charging infrastructure
Charging infrastructure is limited and is hindered by network capacity, land access, and low grid penetration in rural areas. Interoperability between different models, batteries and charging technologies is also a barrier to scale up. Off grid solutions such as diesel generators are widespread but can be polluting and expensive. Solar home systems can provide a clean source of electricity for EV charging, but may not provide the power required.
Cost to consumers
To incentivise the shift to e-mobility, the upfront cost of EVs must not be prohibitively high. The total cost of ownership (TCO) of EVs is generally lower than ICE equivalents due to lower operation and maintenance costs, but high upfront cost remains a barrier. EVs are more expensive upfront due to the cost of the batteries that power them, and are not competitive option, particularly where low-cost, second-hand ICE vehicles are available.
Consumer awareness
Consumer confidence in EVs is generally low in the region. This is driven by range anxiety and lack of charging infrastructure and solutions, poor understanding of EV technology and limited understanding of the advantages relative to ICEs.
Policy limitations
While governments are generally supportive, policy support and incentives for e-mobility remains low across much of sub-Saharan Africa, with subsidies and incentives for fossil fuels at odds with e-mobility support.
Coordination
Many donor initiatives exist, but there is limited coordination and cooperation among them. Increased coordination between initiatives, private sector, and governments (including South-South knowledge sharing) can accelerate deployment.
There is a need for a coordinated effort across the e-mobility ecosystem to ensure knowledge is shared, partnerships are formed and collective momentum is generated. ZE-Mobility aims to address this gap.
Geographic focus: East Africa
High fuel costs in East Africa make green transport alternatives attractive and cost-effective, and the typical journey types make electric 2 wheelers and electric 3 wheelers a robust and competitive option in the region. However, more than 90% of electric motorcycles in sub-Saharan Africa are imported from China and India, and are not built for African conditions. The sector is underfunded; in 2021, e-mobility start-ups in Africa received 3.3x less funding than those in India.
Start-ups are being established across East Africa to address sustainable transport opportunities, and a strong e-mobility ecosystem is being developed. Many initiatives from across the public, private and philanthropic sectors are driving this transition, but there is a need for an integrated regional approach to channel finance and coordinate stakeholders to accelerate e-mobility and achieve the pace and scale of change required.
East Africa has been selected to demonstrate the opportunity for e-mobility acceleration due to its policy and economic conditions, the maturity of the ecosystem and finance opportunities. ZE-mobility will initially focus on two- and three- wheelers, which are considered the most important vehicle segment in the region. We aim to use the learnings from East Africa to expand the accelerator’s support across Africa and across vehicle types.
Focus Areas / Themes
Infrastructure & Energy Transition
Innovation & Demonstration
Knowledge & Research
While many African cities have access to grid electricity, this is often unreliable, and access to electricity is largely absent between cities and rural areas. This workstream will explore how clean charging infrastructure can be developed in Africa alongside the broader energy access initiatives such as mini-grids in efforts to realise SDG7.
Innovation in African e-mobility is gaining momentum but there is still much further to go. Technology innovation remains important as novel battery and PV chemistries begin to commercialise. There is also a need to demonstrate existing technologies and trial new business models. Battery reliability remains a challenge and business models such as hybridised charging infrastructure, battery swapping, and micro-payments need further proof points.
There are a number of research reports available on the e-mobility sector, but significant knowledge gaps remain. In particular, there is a limited understanding of ICE drivers and their customers to inform how their needs can be catered for in the e-mobility transition. This worksteam will provide a repository of knowledge and research on the e-mobility sector and will commission new work to fill the gaps.
Enabling Environment
Access to Finance
There are 49 countries in Africa with no e-mobility policy. Kenya, Rwanda, Togo and Cape Verde the only countries to currently have e-mobility policies and incentives in place. Policy environments can often be unsupportive, with policies such as petrol and diesel subsidies and important taxation favouring ICE vehicles. There is an opportunity for policy to go further to encompass the entire e-mobility value chain - including consumer awareness, access to finance and charging infrastructure.
E-mobility start-ups have so far raised over $76m, yet insufficient financing remains a challenge for both demand and supply sides. Whilst commercial investors and DFIs are increasingly interested in e-mobility, there is a lack of CAPEX and working capital finance for e-mobility companies, combined with a lack of consumer finance. This workstream will explore options for financing across the value chain and pilot new instruments to deliver it.