About 15 million vehicles (fossil fuel, electric vehicle, etc) were sold in 2021 in the United States. And “California yesterday announced its timetable for 100% of new car sales to be electric by 2035”. If that happens, Nigeria should take note. Why? While there are many other uses for crude oil, powering vehicles remains one of the most important. Nigeria and indeed Africa do not buy a lot of new cars for them to waste efforts making new fossil-powered cars for us.
What that means is this: if the original car makers decide that they are done with fossil fuel cars, most Africa’s new refineries may find limited uses. Sure, we still have about four decades on those investments, and refineries do other things than just making fuel for cars. But do not discount the trajectory California has put ahead as you plot to raise funds to build modular refineries in Nigeria.
–From Fortune
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If Alan isn’t driving electric yet up in Oregon, he will have no choice roughly a decade from now. California yesterday announced its timetable for 100% of new car sales to be electric by 2035. Starting from a base of 15% today, 35% of new car sales must be electric in 2026, and 68% in 2030.
In playing catch up with some other parts of the world, it may be too little, too late. The European Parliament passed a 2030 ban on gasoline fueled new car sales. Europe’s Renault, Stellantis (the owner of Fiat and Chrysler), and luxury car maker Bentley will phase out gasoline car production by the same time. Even China has a province banning gasoline cars by 2030: Hainan Island announced that news on Monday.
But with the Golden State as trailblazer, it looks increasingly likely that 2035 will mark the “R.I.P.” year for new gasoline car sales in the U.S.
More than a dozen states typically follow California’s lead on vehicle standards, including all the Pacific Northwest, most of New England, and many of the mountain states. General Motors announced its own phasing out of gasoline fueled cars by 2035, and Chrysler is even more ambitious, targeting 2028. The latest developments may well force Ford, so far targeting only 40% electric sales in the U.S. by 2030, to up that percentage.
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Comment: I doubt this is will happen anytime soon. The majority of brands sold in Nigeria even though coming from the USA are manufactured in Asia, As you put it, most Africans do not purchase brand new vehicles except the elite which is less than 1% of the populace.
Secondly the Chinese manufacturers will most likely fill this gap with their more affordable vehicles. This is also an opportunity for indigenous manufacturers to win more market share. The war in Ukraine shows that we cannot do away with fossil fuels but according to eachs nation’s natural resources. As Europe dreads a winter without gas supply for electricity needs. And region based energy needs and demands. For Nigeria and Africa this is good. Neccesity will become the mother of invention in this case.
A California projection of 2035 is not as significant for a continent as heavily resourced as Africa with a lot of potential for local manufacturing.
Dangote has every right to be optimistic about the returns on investment for the upcoming refinery. It will unlock energy to power multiple local industries and companies and not just vehicles. It will generate millions of Jobs across sub Saharan Africa which will transform multiple industries requiring the byproducts.
My Response: “This is also an opportunity for indigenous manufacturers to win more market share” – Africa does not manufacture cars, we only assemble. If they phase out the ICE, that is it.
Why have a production line to support about 5,000 new cars in Nigeria yearly? “General Motors announced its own phasing out of gasoline fueled cars by 2035, and Chrysler is even more ambitious, targeting 2028.” Toyota is joining along with Honda. China is negligible in Africa as its cars have no second hand value.
Comment: Yes California has posited a trajectory and that should be a course for concern for OPEC but that not withstanding, Nigeria and indeed Africa will still enjoy proceeds of oil far beyond that set date.
Crude Oil is not going away anytime soon.
My Response: We will continue to need crude oil. The conversation is focusing on the value. If those cars do not need the oil, a barrel may crash to $10. In other words, oil may just be as valuable as premium water.
Comment: Nigeria has not achieved any Sufficiency in fossil fuel energy not to talk about about transitioning. Nigeria and indeed Africa still have many decades to live and power herself with fossil fuel. If it becomes difficult some car manufacturers will relocate to Africa.
My response: America sells 15 million new cars. You think anyone pays attention to your about 5,000 yearly new cars in Nigeria. You will still need crude oil but the cost will become premium water price of about $10 per barrel because the demand will crash!
My comment: Ndubuisi Ekekwe the average, if not middle class Nigerian cannot afford a brand new vehicle yet. Tokunbo cars are still counted as pristine, even among the rich.
Nigerian-used vehicles are having a field day since Cars45 and co opened up that niche.
How then can more expensive and more advanced EV car technologies successfully compete?
My response: Actually, I am not saying Africa will not use its old or used cars. What I am saying is this: if they stop making fossil cars, price of crude oil will drop irrespective of what happens in Africa. US buys 15 million NEW cars yearly. Africa possibly imports 1 million USED and New. Those will be there but will not move prices of crude oil. The implication is that oil price will drop for refiners. This post is not about car sellers but refiners and the future of the business.
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But this is not a problem, or is it? We Innoson Vehicles, so Ford and GM can sell their fossil fuel production assets to IVM, and Africa is good to go. Their phasing out should also make fairly used cars cheaper to bring them into Nigeria and other African markets.
What we don’t need and cannot entertain is to model our own development drive on what California or EU thinks, the world has already passed that stage.
Our own transition to EVs will come with our unique timetable, and not because foreign car makers are no longer making new cars, the refineries are built first to service African markets, and those markets are nowhere near saturation yet.
All the parts of the world are not meant to develop with the same speed, and our choices must be guided by our unique heritage and position, so that we don’t discount valuable things in pursuit of what is never ours.
We need to give our educational institutions and policymakers a different kind of assignments, if we must develop this continent to a respectable level.
Now that California has put 2035 as its own deadline, what is our deadline? We can put 2100, and nobody needs to raise an eyebrow.
Don’t complain, and never explain.