However, in some African countries, political instability and uncertain economic conditions make borrowing more expensive. To some extent, high financing costs impact the purchase of any vehicle, regardless of how it is operated. But EVs are more expensive than equivalent gas-powered cars, and the higher initial cost pays off in more interest over time. In some cases, financing an EV can be even more expensive than financing a gas vehicle — the technology is new, and banks may view the purchase as more of a risk and charge higher interest rates, says Kelly Carlin, manager of the program on carbon-free transportation at the Rocky Mountain Institute, an energy think tank.
The picture also varies widely depending on the country. According to the study, in South Africa, Mauritius and Botswana, financing conditions are already close to the level needed to allow EVs to reach cost parity. In high-risk countries (the study gives examples including Sudan, which is currently in civil war, and Ghana, which is recovering from a major economic crisis), doing so would require drastic cuts in financing costs.
Making EVs an affordable option will be an important first step towards putting more vehicles on the roads in Africa and around the world. “People will start adopting these technologies when they become competitive,” says Nelson Nsitem, head of Africa energy transition analyst at energy consultancy BloombergNEF.
Ensitem says solar-based charging systems, as outlined in the study, could help ease electricity disruptions, bringing more EVs on the roads. But there is still a need for more charging infrastructure, which is a major challenge in many countries where the grid needs major upgrades for capacity and reliability, he added.
Globally, more EVs are hitting the roads every year. “The global trend is unequivocal,” Carlin says. “There are questions about how fast this is happening in different places, but the momentum is sustained,” he says.
