Amidst rising tariffs from Europe and the United States, Chinese electric vehicle (EV) manufacturers are turning their gaze towards Africa, viewing it as a burgeoning market with vast potential to fill the gap.
However, this strategic pivot is not without its challenges, primarily due to the continent’s poor infrastructure, unstable electricity supply, and low income levels.
Neta Auto, a prominent Chinese EV maker, recently labeled the increased tariffs from Europe and the US as a “temporary setback.” According to SCMP, Neta Auto’s vice-president, Zhou Jiang, noted that these tariffs are pushing Chinese companies to explore alternative markets. In his view, the tariffs, while challenging, are unlikely to impede the long-term growth of Chinese EV brands.
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“If the policies last long, that would have a negative effect on consumers’ experience with product selection and our technology development,” Zhou noted.
The European Commission’s decision to impose additional tariffs of up to 38 percent on imported Chinese EVs from July 4 has significantly impacted the industry. This move, following the US’s decision to quadruple duties on Chinese EVs from 25 percent to 100 percent, stems from accusations of market distortion due to Chinese subsidies. Beijing has rejected these claims as unfounded, and Zhou echoed this sentiment, asserting that the competitive pricing and quality of Chinese EVs are the results of over a decade of development, not merely government subsidies.
Despite these setbacks, Chinese EV brands are making inroads into the Middle East as well as Africa. Zhou’s recent visit to Kenya, where he opened Neta Auto’s first African store, exemplifies this shift. He believes that global consumers will ultimately choose superior technology, quality products, and excellent service in time. This sentiment is driving Neta Auto and other Chinese EV giants to invest in Africa, Southeast Asia, South America, and select European markets.
In Nairobi, Neta Auto has debuted its Neta V star model and plans to introduce more models like the Neta Aya and Neta X. According to The SCMP, the company has signed a memorandum of understanding with Kenya-based Associated Vehicle Assemblers (AVA) to assemble 250 EVs monthly, with local production slated to begin by mid-2025.
“Together with AVA, we will quickly produce local EVs in Kenya. Neta will provide our resources for training and technology transfer,” Zhou stated.
However, the path to success in Africa is fraught with obstacles. The continent’s poor infrastructure, particularly the lack of a stable electricity supply, and low income levels pose significant challenges. For instance, many African countries, including South Africa, experience frequent power disruptions, complicating the adoption of electric vehicles. Moreover, the high cost of EVs compared to the average income levels in many African nations makes widespread adoption difficult.
Recognizing these challenges, Chinese EV makers are exploring ways to mitigate them. BYD, another Chinese EV giant, recently launched the Seal U DM-i model in Morocco and plans to expand its footprint across the continent. In Rwanda and Kenya, BYD has partnered with local EV manufacturer Ampersand to build 40,000 electric motorbikes by the end of 2026, aiming to electrify a significant portion of Africa’s commercial motorbike fleet.
“Electrifying the intensively used commercial motorcycles found across Africa is a logical first step to decarbonizing a very large potential market of motorcycles across the Global South,” said BYD spokesman Sihai Zhang.
Additionally, other African countries are witnessing increased Chinese EV assembly projects. Nairobi’s EV start-up BasiGo is assembling electric buses from knock-down kits imported from Chinese state-owned CHTC Motors.
“Our first electric buses have completed assembly with our partners at Kenya Vehicle Manufacturers (KVM),” said Jit Bhattacharya, co-founder and CEO at BasiGo. “These are the first units in what we believe will be the first high-volume, serial assembly line for electric buses in Kenya.”
While these developments are promising, experts caution that the lack of EV infrastructure and unstable energy supplies in many African countries are significant hurdles. Walt Madeira, principal analyst for Europe, the Middle East, and Africa vehicle forecasting at S&P Global Mobility, suggested that Chinese carmakers should focus on plug-in hybrid electric vehicles (PHEVs) as a transitional technology.
“Our forecast shows a positive demand development for Chinese carmakers in Africa, but at a slow sustainable rate,” Madeira said.
He explained that “at the moment, hybrids are gaining in popularity among consumers, exactly because they are fuel-efficient and give peace of mind with no need for charging headaches.”
While Chinese EV manufacturers are strategically expanding into Africa to counteract Western tariffs, they must navigate the continent’s infrastructural and economic challenges. Analysts believe that their success will depend on their ability to adapt to local conditions and overcome significant hurdles in a market with both vast potential and substantial obstacles.