DAVID FURLONGER: Africa goes down in the pecking order

How serious are global motor companies about bringing electric vehicles (EVs) to Africa? It’s a question I asked myself this week after reading a new report on the need to reduce automotive carbon emissions across the Middle East and Africa.

The report, “Gearing Up For the Green Automotive Transmission”, is co-authored by General Motors (GM) and the UK-based Oxford Business Group. They say there are “huge” opportunities to reduce carbon emissions across the region through the adoption of EVs.

The Middle East and Africa are commonly squashed together by European and American marketers not sure what else to do with them. Besides sharing lack of development, most countries have little in common.

That point is underlined in this supposedly regional report, where findings apply almost exclusively to wealthy Middle East states like the United Arab Emirates (UAE).

Luay Al Shurafa, GM’s president and MD for the combined region, is quoted as saying: “Our commitment to sustainability in the Middle East is evidenced by our target of a 95% reduction in our annual operational carbon footprint in the UAE.”’

He makes no commitments for Africa, which barely merits his attention. It’s not surprising. GM is almost invisible here, having disinvested from SA, its biggest regional market, at the end of 2017. Its main presence on the continent is in Egypt, where a local partner builds vehicles under licence. This is GM’s only assembly plant in Africa and the Middle East. GM says its Chevrolet brand has been Egypt’s top-seller for the past 14 years.

Not surprisingly, oil-rich Saudi Arabia is the biggest producer of transport-related carbon dioxide emissions. Its pollution is more than twice that of second-placed SA, which is followed by Nigeria, Egypt, UAE and Kuwait.

GM says it will have over 30 EV models on sale globally by 2025. Of those, 13 will be available in the Middle East and Africa. Unless the company performs another U-turn (its 2017 disinvestment was its second – it previously quit in 1986 but then bought back control from local shareholders in 2004), none of those will be available in SA.

That would be a shame because, according to the report, this country will be the region’s second-biggest EV market by 2026. The UAE is predicted to lead the way, with 32%, followed by SA at 27% and Saudi Arabia at 19%. Unfortunately, these are big shares of an unimposing market. Total value of the Middle East-Africa market for EVs in 2026 is forecast to be $84m, up from $35m in 2020.

SA’s share could be bigger if the government can awaken from its self-induced EV policy coma and create the incentive framework it’s been promising since last year.

The GM-Oxford report says EVs will play an increasingly important role in SA automotive policy “from 2035 onwards”. That may be too late. As National Association of Automobile Manufacturers of SA CEO Mikel Mabasa observed recently, the deadline for shifting to the manufacture of EVs instead of vehicles with internal combustion engines is almost upon the local motor industry.

Several UAE states already offer buyer incentives. In Egypt, GM and its partner are in talks about building EVs. In Saudi Arabia, American luxury electric-car company Lucid has reportedly been offered $3.4bn in financing and incentives to erect a car plant able to build 155,000 vehicles annually. It is due to open in 2025.