In some African countries, however, political instability and uncertain economic conditions make borrowing money more expensive. To some extent, the high financing costs affect the purchase of any vehicle, regardless of how it’s powered. But EVs are more expensive up front than equivalent gas-powered cars, and that higher up-front cost adds up to more interest paid over time. In some cases, financing an EV can also be more expensive than financing a gas vehicle—the technology is newer, and banks may see the purchase as more of a risk and charge a higher interest rate, says Kelly Carlin, a manager in the program on carbon-free transportation at the Rocky Mountain Institute, an energy think tank.
The picture varies widely depending on the country, too. In South Africa, Mauritius, and Botswana, financing conditions are already close to levels required to allow EVs to reach cost parity, according to the study. In higher-risk countries (the study gives examples including Sudan, which is currently in a civil war, and Ghana, which is recovering from a major economic crisis), financing costs would need to be cut drastically for that to be the case.
Making EVs an affordable option will be a key first step to putting more on the roads in Africa and around the world. “People will start to pick up these technologies when they’re competitive,” says Nelson Nsitem, lead Africa energy transition analyst at BloombergNEF, an energy consultancy.
Solar-based charging systems, like the ones mentioned in the study, could help make electricity less of a constraint, bringing more EVs to the roads, Nsitem says. But there’s still a need for more charging infrastructure, a major challenge in many countries where the grid needs major upgrades for capacity and reliability, he adds.
Globally, more EVs are hitting the roads every year. “The global trend is unmistakable,” Carlin says. There are questions about how quickly it’s happening in different places, he says, “but the momentum is there.”
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