Bloomberg Audio Studios, Podcasts, radio News. I'm Jennifer's Abasaja and this is the Next Africa podcast, bringing you one story each week from the continent driving the future of global growth with the context only Bloomberg can provide. So I'm
in the back of an electric taxi. This is actually my first time in one, something that's starting to become a bit more common site across the continent, which has actually been helped by a combination of rising fuel prices and cheaper imports that has sort of led to the ev market growing in parts of the continent and also Chinese car companies making most of the inroads in some of the countries that we're seeing.
This is a very important market because we feel this continent, especially also South South Africa, need be wide the attackler to bring the solution, to bring also innovation here. Then they need a company like us.
So that was Stella Lee, executive vice chairman of BID, speaking with me in Johannesburg last year. And one of the countries where BID is making inroads is also an Ethiopia. Six percent of cars on the road are now electric vehicles. That is up from one percent in twenty twenty four when the government actually introduced an import ban on gas powered cars, and today a new BID car could be cheaper in some sense than a secondhand gasoline car used to cost while a.
Mild bid No. I drive a BID electric vehicle. It's been about seven or eight months since I made the switch from a gas powered car, and there's a significant difference. In the past, I often face challenges refueling my car, dealing with long lines at gas stations and sometimes even being unable to fill up a first seven.
Now, I'll hope you so. In today's Next Africa podcast, we're asking will this ev growth continue at pace in Africa? Where is it happening? And will Chinese firms be the sole ones to actually benefit? Joining me today is Bloomberg's Ethiopia based reporter, that is Fausika Todase, And later in the show we'll hear from our Asia transport reporter, Linda Lu based in Beijing. But Fasika, let's just start with you.
I haven't myself gotten to addis Ababa. Fortunately we have you, though, on the ground to do some of this reporting for us, and you've been actually reporting on the rising popularity of electric vehicles which we don't always equate to the continent in particular, How noticeable has this growth been? What made you want to dig into this a bit more?
If you asked me this a few years buck, like three four years buck, I would say it's not that much, not subble. But over the past three years you can't observe the number of evs on the roads are growing. And also you see normally we see long lines at gus and fuel stations, but now we see long lines electric vehicles charging their battery at public charging stations in the parking lots, so you will notice the growing number of evs in it. It is also in some major
parts of the FORSABA. That's one of the reasons that triggered us to work on the EV's story.
That we did well. And I don't think most people or people might be surprised to find out how this rise of evs really came about. Can you talk about that? I mean, how did this all come about? From the government perspective.
We'll talk about the government ban on the import of I see twenty twenty four. But before that, people were very challenged in fuel, especially spending hours and hours on long QUEUS stations to fill their tongue. And also even after waiting for hours and hours, they might be told by the gust that they're out of gus. So that was the major challenge that was pushing the people to
switch to the evs. But in twenty twenty four, the government has put a complete pun on the IC mainly attributing to the physical pressure that it was put on the government, especially subsidizing fuel. So government is putting a huge amount of money in subsidizing fuel. Data is said because it's one of the priority communities they want to subsidize just to control the infornationary pressure on the people
on the economy. So the government started phasing out the subsidy it was putting on fuel imports and fuel retail prices, and at the same time they banned the import of fuel car. So that was one of the reasons to alleviate the government has on a physical pressure on the economy and the budget as well.
Can you give us some of the numbers though, in terms of how were they subsidizing some of these vehicles and how did that then lead to more people want to buy evs.
So, as I said, there's a complete pun on the fuel car since twenty twenty four. But at the same time, the government has put a minimum tax on the evs. Previously, if the importants, we're paying up to such percent tax duty on IC or fuel cars, but on ivis they are only putting five percent tax, which makes it encouraging for people to important buy ivis.
Have you been able to look at the costs because we always talk we talk about electric vehicles, they are a bit more expensive, but some of the debate around buying them is because you save on fuel. When you talk about a minimum tax, what does that look like for an electric vehicle on Ethiopia, what's the cost we're looking at.
We can't compare the price because currently we don't have new fuel cars in the market because of the bun But you look at the price. So recently there is a significant price on the EVE prices following the war in Iran because the dealers are saying that they're not getting more new supply, so they increase the price of
ivs they have on hand. So I would say over the past two months the price has gone significantly up to five thousand dollars increase on the mid size IV So I would say the price of IV's for a mid sized TV. It costs around five million November or thirty one thousand dollars.
It's quite expensive. And what types of cars are you seeing that people buying? And I wonder if we're seeing a dominant car maker when when you drive around outis Ababa, I'm assuming you're driving.
Yes, I do so.
Yeah.
Most of the cars the evs are Chinese brunds dominantly bid cars in different models from the small the small car to the to the four wheel drive. You see bid model cars on the roads, especially for personal use. When it comes to the taxi meta taxi service, the most dominant brand is another Chinese brand, which is called Chunk and Win win Istar.
Well, it's interesting physic because I've spoken with byd Stella Lee before and the company is making quite a big push into Africa. We're going to get into that later in the episode. When you talk to people and drivers, because you've done quite a bit of reporting about this on the ground, what is it that the drivers have been telling you about their own personal reasons for switching outside of what the government sort of forced them to have to do.
The first thing, the major one is the shortage of fuel in the country, so they were spending hours and hours on gas station to fill their tongues. So that was and also there were cases that they might not be able to get gussed, so that was the MEAs the major reism that pushed people to switch to ivis. The second one is most of the drivers I spoke to is that the evis are more comfortable and the latest runs so which they prefer to switch to the evs.
So these are the major reasons people are telling me why they switch to IVIS on top of the government decision to bun fuel cars from getting into the country.
And stick with me. When we come back, we'll hear more about Ethiopia's EV growth and also head over to China to check in on why the carmakers there are looking towards African consumers for some of their growth. We'll be right back. Welcome back today. On the podcast, we're discussing EV's Physica. Todesa is still with me physica. I want to talk about some of the risks here. This is still quite a new market in Ethiopia. Does this look based on your own reporting, that this is going
to really change the car industry in Ethiopia? Or are we just looking at really a small sub section of the market that is maybe adopting some of these electric vehicles.
So since it's a new technology, there are not much much technicians who are more hands on on EV maintenance and also spare parts, so since it's new, we don't know that many spare part suppliers that are bringing and if spare parts, that's also the risk people see. And also most drivers are telling me that about battery regradation, so we don't know how much it's going to last.
And people have yes, they saved money from fuel expenses, but also they don't know how much they would be spending if they need to change their battery, so that's also the reservation people have on on evs. In terms of the market, I would say it's the market that's growing because the penetration is growing over the past two years. So if penetration is about six percent out of the total cars in Ethiopia, the number of assemblers is increasing.
Until now the government has licensed seventeen IV assemblers in Ethopia, mainly Chinese assemblers and also local companies that are assembling Chinese brand evis. And also we're seeing the charging network is expanding across at this end, also the major cities of the country. So I would say it's getting bigger years after years.
Yeah, yeah, I was going to say that because the charging is such a big factor of this. Is Ethiopia equipped to have these charging stations there, so.
Most of the drivers are charging their car at their house using household charger, which is the quality level to charger.
But at the same time, the city is working on aggressively working on expanding the public charging stations, especially fast and ultra fast charging stations built by private companies and also state owned companies like the state telecom companies building charging stations across the city so that they built three and also the government has has Medita mandatory for the car dealers to have at least one or two charging
ports inside their dealership. So I would say the charging network is also expanding, but not that much comparable with the number of elist that are seen in the in the country or driven in the country.
Is the electricity there though, I think is what I'm trying to figure out.
Yes, So, you know, recently to integrated the largest Africa's largest dumb, the Great stopend Renaissance dumb, and also there are hydro dumps across the country, so relatively the electric electricity price is relatively cheaper for households, so yes.
And physic maybe maybe just finally, because I think this was a really fascinating part of your piece is what does this mean for a lot of the other workers or drivers really who rely on internal combustion engines for their work, right, and you get into the gig economy, right, and how much that relies on some motor vehicles. I mean, what's the other side of this that maybe we'll be
talking about in a few years time. Is this going to phase out some sub section of the economy that has been has been a driver for Ethiopia.
Yes, Jen, So recently the government has announced a new law that requires the fuel car drivers to change their motors into gus or electric to electric motors. And also we're seeing most of the public transports providers switching to EV's like the buses and the mini buses, and also the delivery services are now switching to electric motorbikes from the fuel motorbikes.
Are you in the market for a new car, Fasika, It's.
Been two years now since I I started driving evs, So no yeah.
Okay, so you're already on the EV train.
Yeah, because I was spending like two three days on the line at gas station, so it was not convenient for me to go out for reporting with fuel Carso I'm driving EV since twenty twenty four.
Well, let's get the view from China. Now joining me from Beijing is Linda lu Our Asia Transport reporter. Linda, thank you so much for being here. So let's just take a look at the global picture for electric vehicles. Bloomberg has been reporting about how we have been seeing sales actually growing in a number of markets since the Middle East conflict really ignited a few weeks ago. How much of that, though, is coming from Chinese automakers. Give us a lay of the land if you can so.
For Chinese automakers, most of their sales are still within the home markets, but obviously the exports and overseas sales are growing very fast. These Chinese evs cover a big range of price points. A lot of them are very affordable compared to the ones you would find from say
Tesla or Volkswagen or BMW. So the Chinese evs are definitely attracting a lot of consumer interest for their affordability, and they also have a lot of technology features in the car that consumers might find them very attractive.
When you say affordable, what do you mean? Because we were speaking with Fasika today, say a reporter and Ethiopia, and she gave us a sense of how much it's costing there for consumers. What are you talking about when you say affordable.
Yes, so, looking at a market like Ethiopia, some of these models, for example, the Sea Goal compact hatchback from Chinese carmaker BYD goes for say around twenty three thousand US dollars. Now, compare that to a Tesla, which you know costs from thirty thousand US dollars if not more. That's actually a very affordable option for consumers locally, even if say not many of the lower social economic consumers
can afford them. But you know, looking at the middle class or more wealthier consumer segments, the Sea Goal from BYD, you know, is one that is probably more accessible to the consumers there than say a Tesla.
Yeah, and perhaps, as we talked about with Fasika, the cost savings analysis seems to level out when some of these consumers think about how much they're spending on fuel. When we think about the African consumer, Linda, and the African markets in particular, how important are they or Chinese automakers.
So right now, Africa as a region for the Chinese automakers, especially looking at the EV segment, it's still quite small. I'm just looking at the figures for the first quarter this year, China exported that just over thirteen thousand evs to Africa. That's actually quite small compared to say Europe or Asia, where you know they receive something like more
than two hundred thousand evs in the first quarter. But just looking in terms of growth, Africa is actually one of the fastest growing region in terms of the changes in EV shipments. Africa's growth in the first quarter so far is at eighty seven percent. That's probably just the second fastest growing region for Chinese EV exports, behind Latin America and the Caribbean. So even though it's a very small market right now, but the potential is very big.
Which would make sense why we're seeing them double down to a certain extent, at least n BYD's case. So, Linda, we talk about Ethiopia in this episode, but where else, based on your reporting, are you seeing Chinese carmakers targeting and potentially looking to make inroads across the continent.
So in Africa, I would say the traditional auto hub's natural markets are for these Chinese carmakers, so places like South Africa, Morocco or even Egypt where they have strong manufacturing bases. I've seen a lot of interest from Chinese car makers. For example Cherry, which is China's largest car exporter, they are actually in the process of taking over a car factory that was formerly owned by Nissan. So it just shows them building up the supply chain and the
local region. And if it's a country that already has essentially foundation for making costs, then that's a very easy choice for the Chinese carmakers.
And our thanks to Linda lu and Fiska Tadese for joining us this week. You can read our reporting on ev growth across Bloomberg platforms. Now here's some of the other stories we've been following across the region this week. Cobald Medals, the exploration company backed by billionaires including Bill Gates and Sam Altman, officially broke ground on what will be Zambia's biggest comper mind as the global hunt for
critical minerals heats up. The Mingomba mine will cost more than two point three billion dollars to build, making it one of the biggest ever investment projects in the southern African nation, and France urged its citizens to leave Molly Quote as soon as possible, as a separatist group vowed to expand its campaign to ouse the nation's military junta and Islamist militant's renewed threat to blockade the capitol. You can follow these stories across Bloomberg platforms, including the Next
African Newsletter. Will put a link to that in the show notes. This program was produced by Adrian Bradley and Tiva Adebayo. Don't forget to follow and review the show wherever you usually get your podcasts. But for now, I'm Jennifer's Abasaja. Thanks as always for listening.