In mid-June, the European Commission announced an increase in tariffs to 38.1% on imports of Chinese-built green vehicles, arguing that these vehicles benefit from Chinese government subsidies, infringing on fair competition in the European common market.
Now, Chinese EV makers are turning to Africa as their best alternative market- ramping up their push into the continent through expansion of dedicated stores to more countries and partnerships with local companies to venture into the market.
One of Europe’s best selling Chinese electric vehicle brands, BYD (Build Your Dreams), launched a showroom in Zambia this September – its fourth market in Africa.
BYD has entered into a strategic partnership with Pilatus Electric Mobility Zambia Limited (PEM), to showcase a range of electric vehicles (EVs), and affirm its commitment to expanding its footprint in Africa.
In June, another Chinese brand, NETA Auto, opened its first flagship store in Kenya and is looking to leverage on this debut to venture into other African markets.
"Kenya not only serves as a gateway to Southern, Central, and Eastern Africa but is also a key node in the Belt and Road Initiative leveraging Kenya’s strategic location, NETA Auto aims to deepen economic and trade ties with African countries," said the company in a statement.
Neta is a brand developed by Hozon New Energy Automobile, an EV manufacturer that was established in 2014 and produced 127,500 vehicles in 2023. Over the next two years, the auto maker plans to enter 20 countries, open 100 stores, and achieve an annual sales volume of over 20,000 units within three years in Africa.
Another smart electric vehicle company, XPENG, also founded in 2014 in China, partnered with an Egyptian auto maker, Raya Auto, to introduce two of its brands in the North African market.
"Our company is confident in the promising opportunities that lie within the Egyptian market, and we are enthusiastic about introducing cutting-edge and environmentally-friendly electric vehicle technology to consumers in Egypt. We anticipate great success in the market,” said XPENG MEA region General Manager Wang Ke, in a statement.
Research firm Statista projects Africa''s electric vehicle sales in 2024 to be slightly over 2,000 units and grow to over 3,600 by 2029, citing government incentives and the need for sustainable transportation solutions as key adoption drivers. It also affirms Chinese auto brands as key beneficiaries in this US$204.8m market in 2024.
The expanding lineup of Chinese EV brands is also expected to rattle the larger general car market in Africa currently enjoyed by European and Japanese brands like Volkswagen, Toyota Motor and Suzuki.
The bigger advantage the Chinese makers will have over the traditionally known brands will be the electric powered variants and perhaps an attractive price point since European and Japanese brands in the market are largely focused on gasoline-powered vehicles with only a few EV models locally.
New vehicle sales in Africa stood at 1, 049, 842 by close of 2023, with South Africa the largest car market recording the biggest sales at 531, 787 followed by Morocco(161 504) and Egypt (86 044), according to data by the International Organization of Motor Vehicle Manufacturers(OICA).
Used vehicles in Africa however, make up a significant portion, accounting for 85% of the overall vehicle fleet on the continent, according to research firm Mordor Intelligence.
Among all the countries in Africa, Mordor intelligence cites Egypt and Morocco as the growth enabler for Africa’s used car market, owing to their widespread consumer groups and support for used cars. South Africa, Nigeria, and Kenya are the next countries keeping pace with the market with the two North African countries.
"Consumers in the regions were deeply attracted to these used cars owing to an increase in their purchasing capabilities and a hike in their average disposable income during recent times," said the research firm.
The carmaker explained that the African nation is seeing steady economic growth, a growing middle class and a raised awareness of NEVs'' role in environmental protection.
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