Chills are multiplying, cos the green power Africa could supply is electrifying

South Africans who have to contend with congested roads during their daily commute may find it hard to believe that a mobility revolution is on the horizon.

Emobility refers to electric vehicles, ideally powered by renewable energy sources and ranging from two- and three-wheeled vehicles to cars and buses.

Recent developments

Recent developments under way in South Africa are laying the foundation for such a revolution, which will help the country meet its Paris Agreement carbon-reduction commitments.

Promising moves include the recent publication of the South African Renewable Energy Masterplan, which punts battery storage and renewable energy.

Work is also under way on EV and Critical Minerals masterplans, which will have input from the departments of trade, industry and competition and mineral resources and energy, among others.

In the private sector, BMW announced in June that it will manufacture the X3 as a plug-in hybrid for global export at its plant in Tshwane.

In the past couple of years there has been a significant increase in the importation of electric and solar batteries into South Africa, as well as battery assembly growth in the country, particularly the Western Cape.

These events are taking place parallel to Africa-wide initiatives. The African Continental Free Trade Agreement (AfCFTA) has prioritised the automotive sector and transport/logistics value chains.

The African Association of Automotive Manufacturers (AAAM) is working with original equipment manufacturers (OEMs) on a continent-wide strategy, while Afreximbank is supporting investments in the automotive sector with various programmes.

The critical minerals and renewable energy sectors are also likely to be prioritised across the continent, with some states incentivising electric-vehicle and emobility development.

Rwanda plans to phase in electric buses, cars and motorcycles, while recent moves in Kenya are particularly noteworthy.

That country has established an emobility task force whose main objective will be to:

• Develop a national electric mobility policy covering all modes of transport (road, air, rail and maritime) and drive uptake of emobility,
• Create an enabling environment,
• Recommend fiscal and non-fiscal incentives to promote imports, local manufacture and assembly,
• Provide a framework for the end of life and disposal,
• Come up with a framework to develop carbon credits and create standards, and
• Measure the impact on the economy and environment.

Likely development path for emobility in Africa

Initially, EVs or emobility are likely to find traction in public transport and two- or three-wheelers, before wide-scale adoption by the automotive sector.

The evolution will be different in each African jurisdiction. For example, Kenya, Nigeria and Uganda have more two- and three-wheelers than South Africa does, so they are likely to prioritise electrification of these modes of transport. In this country there may be greater potential in starting emobility in the public transport/delivery sectors to meet a significant gap in the market.

There is a real opportunity for South Africa to help lead the emobility revolution in Africa for several reasons.

The continent urgently needs affordable and sustainable mobility solutions.

The market for lithium battery cells could be supplied by local manufacturers, as the continent possesses many of the necessary raw materials.

South Africa has a mature automotive sector, including OEMs that export globally, and it has signed trade agreements to facilitate exports to Europe, such as the European Partnership Agreement (with the Sadc) and the African Growth and Opportunity Act (Agoa).

In creating an EV export industry, the country can take advantage of the AfCFTA’s rules of origin, in which 40% of local content from Africa is under discussion.

Implications for South Africa

By developing a multifaceted emobility manufacturing sector, South Africa would speed up its transition to a greener future and meet its climate-change goals, promote industrialisation in line with Africa’s Agenda 2063 (the continent’s blueprint for achieving inclusive and sustainable development over a 50-year period, with an emphasis on youth and women) and create jobs.

As South Africa transitions away from internal combustion-engine (ICE) vehicles, it would be able to participate in other parts of the value chain beyond car manufacture.

There is an opportunity for it to produce the cells or batteries needed for EVs, and battery factories could stimulate local and regional economic growth.

Such factories could also help to develop skills in engineering and attract talent to regions where manufacturing takes place.

There are constraints to these plans, with the most obvious in South Africa being lack of access to uninterrupted energy sources. Another is that it is difficult to raise seed capital for projects related to environmental, social and governance improvement. More funding is needed to support innovative start-ups.

Yael Shafrir is an associate director at Webber Wentzel