Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. I'm Jennifer's Abasaja and
Speaker 1: this is the Next Africa podcast, bringing you one story
Speaker 1: each week from the continent driving the future of global
Speaker 1: growth with the context only Bloomberg can provide. So I'm
Speaker 1: in the back of an electric taxi. This is actually
Speaker 1: my first time in one, something that's starting to become
Speaker 1: a bit more common site across the continent, which has
Speaker 1: actually been helped by a combination of rising fuel prices
Speaker 1: and cheaper imports that has sort of led to the
Speaker 1: ev market growing in parts of the continent and also
Speaker 1: Chinese car companies making most of the inroads in some
Speaker 1: of the countries that we're seeing.
Speaker 2: This is a very important market because we feel this continent,
Speaker 2: especially also South South Africa, need be wide the attackler
Speaker 2: to bring the solution, to bring also innovation here. Then
Speaker 2: they need a company like us.
Speaker 1: So that was Stella Lee, executive vice chairman of BID,
Speaker 1: speaking with me in Johannesburg last year. And one of
Speaker 1: the countries where BID is making inroads is also an Ethiopia.
Speaker 1: Six percent of cars on the road are now electric vehicles.
Speaker 1: That is up from one percent in twenty twenty four
Speaker 1: when the government actually introduced an import ban on gas
Speaker 1: powered cars, and today a new BID car could be
Speaker 1: cheaper in some sense than a secondhand gasoline car used
Speaker 1: to cost while a.
Speaker 3: Mild bid No. I drive a BID electric vehicle. It's
Speaker 3: been about seven or eight months since I made the
Speaker 3: switch from a gas powered car, and there's a significant difference.
Speaker 3: In the past, I often face challenges refueling my car,
Speaker 3: dealing with long lines at gas stations and sometimes even
Speaker 3: being unable to fill up a first seven.
Speaker 1: Now, I'll hope you so. In today's Next Africa podcast,
Speaker 1: we're asking will this ev growth continue at pace in Africa?
Speaker 1: Where is it happening? And will Chinese firms be the
Speaker 1: sole ones to actually benefit? Joining me today is Bloomberg's
Speaker 1: Ethiopia based reporter, that is Fausika Todase, And later in
Speaker 1: the show we'll hear from our Asia transport reporter, Linda
Speaker 1: Lu based in Beijing. But Fasika, let's just start with you.
Speaker 1: I haven't myself gotten to addis Ababa. Fortunately we have you, though,
Speaker 1: on the ground to do some of this reporting for us,
Speaker 1: and you've been actually reporting on the rising popularity of
Speaker 1: electric vehicles which we don't always equate to the continent
Speaker 1: in particular, How noticeable has this growth been? What made
Speaker 1: you want to dig into this a bit more?
Speaker 4: If you asked me this a few years buck, like
Speaker 4: three four years buck, I would say it's not that much,
Speaker 4: not subble. But over the past three years you can't
Speaker 4: observe the number of evs on the roads are growing.
Speaker 4: And also you see normally we see long lines at
Speaker 4: gus and fuel stations, but now we see long lines
Speaker 4: electric vehicles charging their battery at public charging stations in
Speaker 4: the parking lots, so you will notice the growing number
Speaker 4: of evs in it. It is also in some major
Speaker 4: parts of the FORSABA. That's one of the reasons that
Speaker 4: triggered us to work on the EV's story.
Speaker 1: That we did well. And I don't think most people
Speaker 1: or people might be surprised to find out how this
Speaker 1: rise of evs really came about. Can you talk about that?
Speaker 1: I mean, how did this all come about? From the
Speaker 1: government perspective.
Speaker 4: We'll talk about the government ban on the import of
Speaker 4: I see twenty twenty four. But before that, people were
Speaker 4: very challenged in fuel, especially spending hours and hours on
Speaker 4: long QUEUS stations to fill their tongue. And also even
Speaker 4: after waiting for hours and hours, they might be told
Speaker 4: by the gust that they're out of gus. So that
Speaker 4: was the major challenge that was pushing the people to
Speaker 4: switch to the evs. But in twenty twenty four, the
Speaker 4: government has put a complete pun on the IC mainly
Speaker 4: attributing to the physical pressure that it was put on
Speaker 4: the government, especially subsidizing fuel. So government is putting a
Speaker 4: huge amount of money in subsidizing fuel. Data is said
Speaker 4: because it's one of the priority communities they want to
Speaker 4: subsidize just to control the infornationary pressure on the people
Speaker 4: on the economy. So the government started phasing out the
Speaker 4: subsidy it was putting on fuel imports and fuel retail prices,
Speaker 4: and at the same time they banned the import of
Speaker 4: fuel car. So that was one of the reasons to
Speaker 4: alleviate the government has on a physical pressure on the
Speaker 4: economy and the budget as well.
Speaker 1: Can you give us some of the numbers though, in
Speaker 1: terms of how were they subsidizing some of these vehicles
Speaker 1: and how did that then lead to more people want
Speaker 1: to buy evs.
Speaker 4: So, as I said, there's a complete pun on the
Speaker 4: fuel car since twenty twenty four. But at the same time,
Speaker 4: the government has put a minimum tax on the evs. Previously,
Speaker 4: if the importants, we're paying up to such percent tax
Speaker 4: duty on IC or fuel cars, but on ivis they
Speaker 4: are only putting five percent tax, which makes it encouraging
Speaker 4: for people to important buy ivis.
Speaker 1: Have you been able to look at the costs because
Speaker 1: we always talk we talk about electric vehicles, they are
Speaker 1: a bit more expensive, but some of the debate around
Speaker 1: buying them is because you save on fuel. When you
Speaker 1: talk about a minimum tax, what does that look like
Speaker 1: for an electric vehicle on Ethiopia, what's the cost we're
Speaker 1: looking at.
Speaker 4: We can't compare the price because currently we don't have
Speaker 4: new fuel cars in the market because of the bun
Speaker 4: But you look at the price. So recently there is
Speaker 4: a significant price on the EVE prices following the war
Speaker 4: in Iran because the dealers are saying that they're not
Speaker 4: getting more new supply, so they increase the price of
Speaker 4: ivs they have on hand. So I would say over
Speaker 4: the past two months the price has gone significantly up
Speaker 4: to five thousand dollars increase on the mid size IV
Speaker 4: So I would say the price of IV's for a
Speaker 4: mid sized TV. It costs around five million November or
Speaker 4: thirty one thousand dollars.
Speaker 1: It's quite expensive. And what types of cars are you
Speaker 1: seeing that people buying? And I wonder if we're seeing
Speaker 1: a dominant car maker when when you drive around outis Ababa,
Speaker 1: I'm assuming you're driving.
Speaker 4: Yes, I do so.
Speaker 1: Yeah.
Speaker 4: Most of the cars the evs are Chinese brunds dominantly
Speaker 4: bid cars in different models from the small the small
Speaker 4: car to the to the four wheel drive. You see
Speaker 4: bid model cars on the roads, especially for personal use.
Speaker 4: When it comes to the taxi meta taxi service, the
Speaker 4: most dominant brand is another Chinese brand, which is called
Speaker 4: Chunk and Win win Istar.
Speaker 1: Well, it's interesting physic because I've spoken with byd Stella
Speaker 1: Lee before and the company is making quite a big
Speaker 1: push into Africa. We're going to get into that later
Speaker 1: in the episode. When you talk to people and drivers,
Speaker 1: because you've done quite a bit of reporting about this
Speaker 1: on the ground, what is it that the drivers have
Speaker 1: been telling you about their own personal reasons for switching
Speaker 1: outside of what the government sort of forced them to
Speaker 1: have to do.
Speaker 4: The first thing, the major one is the shortage of
Speaker 4: fuel in the country, so they were spending hours and
Speaker 4: hours on gas station to fill their tongues. So that
Speaker 4: was and also there were cases that they might not
Speaker 4: be able to get gussed, so that was the MEAs
Speaker 4: the major reism that pushed people to switch to ivis.
Speaker 4: The second one is most of the drivers I spoke
Speaker 4: to is that the evis are more comfortable and the
Speaker 4: latest runs so which they prefer to switch to the evs.
Speaker 4: So these are the major reasons people are telling me
Speaker 4: why they switch to IVIS on top of the government
Speaker 4: decision to bun fuel cars from getting into the country.
Speaker 1: And stick with me. When we come back, we'll hear
Speaker 1: more about Ethiopia's EV growth and also head over to
Speaker 1: China to check in on why the carmakers there are
Speaker 1: looking towards African consumers for some of their growth. We'll
Speaker 1: be right back. Welcome back today. On the podcast, we're
Speaker 1: discussing EV's Physica. Todesa is still with me physica. I
Speaker 1: want to talk about some of the risks here. This
Speaker 1: is still quite a new market in Ethiopia. Does this
Speaker 1: look based on your own reporting, that this is going
Speaker 1: to really change the car industry in Ethiopia? Or are
Speaker 1: we just looking at really a small sub section of
Speaker 1: the market that is maybe adopting some of these electric vehicles.
Speaker 4: So since it's a new technology, there are not much
Speaker 4: much technicians who are more hands on on EV maintenance
Speaker 4: and also spare parts, so since it's new, we don't
Speaker 4: know that many spare part suppliers that are bringing and
Speaker 4: if spare parts, that's also the risk people see. And
Speaker 4: also most drivers are telling me that about battery regradation,
Speaker 4: so we don't know how much it's going to last.
Speaker 4: And people have yes, they saved money from fuel expenses,
Speaker 4: but also they don't know how much they would be
Speaker 4: spending if they need to change their battery, so that's
Speaker 4: also the reservation people have on on evs. In terms
Speaker 4: of the market, I would say it's the market that's
Speaker 4: growing because the penetration is growing over the past two years.
Speaker 4: So if penetration is about six percent out of the
Speaker 4: total cars in Ethiopia, the number of assemblers is increasing.
Speaker 4: Until now the government has licensed seventeen IV assemblers in Ethopia,
Speaker 4: mainly Chinese assemblers and also local companies that are assembling
Speaker 4: Chinese brand evis. And also we're seeing the charging network
Speaker 4: is expanding across at this end, also the major cities
Speaker 4: of the country. So I would say it's getting bigger
Speaker 4: years after years.
Speaker 1: Yeah, yeah, I was going to say that because the
Speaker 1: charging is such a big factor of this. Is Ethiopia
Speaker 1: equipped to have these charging stations there, so.
Speaker 4: Most of the drivers are charging their car at their
Speaker 4: house using household charger, which is the quality level to charger.
Speaker 4: But at the same time, the city is working on
Speaker 4: aggressively working on expanding the public charging stations, especially fast
Speaker 4: and ultra fast charging stations built by private companies and
Speaker 4: also state owned companies like the state telecom companies building
Speaker 4: charging stations across the city so that they built three
Speaker 4: and also the government has has Medita mandatory for the
Speaker 4: car dealers to have at least one or two charging
Speaker 4: ports inside their dealership. So I would say the charging
Speaker 4: network is also expanding, but not that much comparable with
Speaker 4: the number of elist that are seen in the in
Speaker 4: the country or driven in the country.
Speaker 1: Is the electricity there though, I think is what I'm
Speaker 1: trying to figure out.
Speaker 4: Yes, So, you know, recently to integrated the largest Africa's
Speaker 4: largest dumb, the Great stopend Renaissance dumb, and also there
Speaker 4: are hydro dumps across the country, so relatively the electric
Speaker 4: electricity price is relatively cheaper for households, so yes.
Speaker 1: And physic maybe maybe just finally, because I think this
Speaker 1: was a really fascinating part of your piece is what
Speaker 1: does this mean for a lot of the other workers
Speaker 1: or drivers really who rely on internal combustion engines for
Speaker 1: their work, right, and you get into the gig economy, right,
Speaker 1: and how much that relies on some motor vehicles. I mean,
Speaker 1: what's the other side of this that maybe we'll be
Speaker 1: talking about in a few years time. Is this going
Speaker 1: to phase out some sub section of the economy that
Speaker 1: has been has been a driver for Ethiopia.
Speaker 4: Yes, Jen, So recently the government has announced a new
Speaker 4: law that requires the fuel car drivers to change their
Speaker 4: motors into gus or electric to electric motors. And also
Speaker 4: we're seeing most of the public transports providers switching to
Speaker 4: EV's like the buses and the mini buses, and also
Speaker 4: the delivery services are now switching to electric motorbikes from
Speaker 4: the fuel motorbikes.
Speaker 1: Are you in the market for a new car, Fasika, It's.
Speaker 4: Been two years now since I I started driving evs,
Speaker 4: So no yeah.
Speaker 1: Okay, so you're already on the EV train.
Speaker 4: Yeah, because I was spending like two three days on
Speaker 4: the line at gas station, so it was not convenient
Speaker 4: for me to go out for reporting with fuel Carso
Speaker 4: I'm driving EV since twenty twenty four.
Speaker 1: Well, let's get the view from China. Now joining me
Speaker 1: from Beijing is Linda lu Our Asia Transport reporter. Linda,
Speaker 1: thank you so much for being here. So let's just
Speaker 1: take a look at the global picture for electric vehicles.
Speaker 1: Bloomberg has been reporting about how we have been seeing
Speaker 1: sales actually growing in a number of markets since the
Speaker 1: Middle East conflict really ignited a few weeks ago. How
Speaker 1: much of that, though, is coming from Chinese automakers. Give
Speaker 1: us a lay of the land if you can so.
Speaker 5: For Chinese automakers, most of their sales are still within
Speaker 5: the home markets, but obviously the exports and overseas sales
Speaker 5: are growing very fast. These Chinese evs cover a big
Speaker 5: range of price points. A lot of them are very
Speaker 5: affordable compared to the ones you would find from say
Speaker 5: Tesla or Volkswagen or BMW. So the Chinese evs are
Speaker 5: definitely attracting a lot of consumer interest for their affordability,
Speaker 5: and they also have a lot of technology features in
Speaker 5: the car that consumers might find them very attractive.
Speaker 1: When you say affordable, what do you mean? Because we
Speaker 1: were speaking with Fasika today, say a reporter and Ethiopia,
Speaker 1: and she gave us a sense of how much it's
Speaker 1: costing there for consumers. What are you talking about when
Speaker 1: you say affordable.
Speaker 5: Yes, so, looking at a market like Ethiopia, some of
Speaker 5: these models, for example, the Sea Goal compact hatchback from
Speaker 5: Chinese carmaker BYD goes for say around twenty three thousand
Speaker 5: US dollars. Now, compare that to a Tesla, which you
Speaker 5: know costs from thirty thousand US dollars if not more.
Speaker 5: That's actually a very affordable option for consumers locally, even
Speaker 5: if say not many of the lower social economic consumers
Speaker 5: can afford them. But you know, looking at the middle
Speaker 5: class or more wealthier consumer segments, the Sea Goal from BYD,
Speaker 5: you know, is one that is probably more accessible to
Speaker 5: the consumers there than say a Tesla.
Speaker 1: Yeah, and perhaps, as we talked about with Fasika, the
Speaker 1: cost savings analysis seems to level out when some of
Speaker 1: these consumers think about how much they're spending on fuel.
Speaker 1: When we think about the African consumer, Linda, and the
Speaker 1: African markets in particular, how important are they or Chinese automakers.
Speaker 5: So right now, Africa as a region for the Chinese automakers,
Speaker 5: especially looking at the EV segment, it's still quite small.
Speaker 5: I'm just looking at the figures for the first quarter
Speaker 5: this year, China exported that just over thirteen thousand evs
Speaker 5: to Africa. That's actually quite small compared to say Europe
Speaker 5: or Asia, where you know they receive something like more
Speaker 5: than two hundred thousand evs in the first quarter. But
Speaker 5: just looking in terms of growth, Africa is actually one
Speaker 5: of the fastest growing region in terms of the changes
Speaker 5: in EV shipments. Africa's growth in the first quarter so
Speaker 5: far is at eighty seven percent. That's probably just the
Speaker 5: second fastest growing region for Chinese EV exports, behind Latin
Speaker 5: America and the Caribbean. So even though it's a very
Speaker 5: small market right now, but the potential is very big.
Speaker 1: Which would make sense why we're seeing them double down
Speaker 1: to a certain extent, at least n BYD's case. So, Linda,
Speaker 1: we talk about Ethiopia in this episode, but where else,
Speaker 1: based on your reporting, are you seeing Chinese carmakers targeting
Speaker 1: and potentially looking to make inroads across the continent.
Speaker 5: So in Africa, I would say the traditional auto hub's
Speaker 5: natural markets are for these Chinese carmakers, so places like
Speaker 5: South Africa, Morocco or even Egypt where they have strong
Speaker 5: manufacturing bases. I've seen a lot of interest from Chinese
Speaker 5: car makers. For example Cherry, which is China's largest car exporter,
Speaker 5: they are actually in the process of taking over a
Speaker 5: car factory that was formerly owned by Nissan. So it
Speaker 5: just shows them building up the supply chain and the
Speaker 5: local region. And if it's a country that already has
Speaker 5: essentially foundation for making costs, then that's a very easy
Speaker 5: choice for the Chinese carmakers.
Speaker 1: And our thanks to Linda lu and Fiska Tadese for
Speaker 1: joining us this week. You can read our reporting on
Speaker 1: ev growth across Bloomberg platforms. Now here's some of the
Speaker 1: other stories we've been following across the region this week.
Speaker 1: Cobald Medals, the exploration company backed by billionaires including Bill
Speaker 1: Gates and Sam Altman, officially broke ground on what will
Speaker 1: be Zambia's biggest comper mind as the global hunt for
Speaker 1: critical minerals heats up. The Mingomba mine will cost more
Speaker 1: than two point three billion dollars to build, making it
Speaker 1: one of the biggest ever investment projects in the southern
Speaker 1: African nation, and France urged its citizens to leave Molly
Speaker 1: Quote as soon as possible, as a separatist group vowed
Speaker 1: to expand its campaign to ouse the nation's military junta
Speaker 1: and Islamist militant's renewed threat to blockade the capitol. You
Speaker 1: can follow these stories across Bloomberg platforms, including the Next
Speaker 1: African Newsletter. Will put a link to that in the
Speaker 1: show notes. This program was produced by Adrian Bradley and
Speaker 1: Tiva Adebayo. Don't forget to follow and review the show
Speaker 1: wherever you usually get your podcasts. But for now, I'm
Speaker 1: Jennifer's Abasaja. Thanks as always for listening.