Blow for EVs as Senegal readmits older fuel vehicles

From the newsletter 

Electric vehicle sales in Senegal could be negatively impacted by the country’s rule change to allow the importation of older and cheaper used fuel vehicles. The country has now raised the age limit for imported used vehicles from the current five years to 15 years. This contrasts with other African countries such as Kenya that have been reducing the age limit.

• The previous policy had been in place since 2020. Its watering down is seen a populist move aimed at making cheap cars more affordable. 

• A flood of older fuel vehicle imports into Senegal will likely dampen demand for newer, cleaner vehicles which remain costlier, slowing investment in EV assembly.  

More details

• Senegal’s move has divided citizens. Proponents argue that it will allow the average Senegalese to be able to afford a car, which has become a necessity. Critics however argue that Senegal will become a dumping ground for old vehicles with high carbon emissions. The vehicles could also be unroadworthy. 

• In 2023, the total number of vehicles (new and used) sold in Senegal was estimated at around 30,000 vehicles. About 70% of these were used vehicles, highlighting their dominance in the country. The used vehicle market is largely dominated by imported vehicles, especially from Europe, Japan and China.  

• The dominance of used vehicles is reflected across Africa, where the majority of vehicles imported into the continent are second-hand. However, some countries have been reducing the age of used vehicles. Uganda has lowered the age in recent years from 15 years to nine years, while Kenya is set to lower the age to five years. Ghana has an age limit of 10 years, while Ethiopia has fully banned all imports of fuel vehicles. 

• Senegal’s nascent motor vehicle manufacturing industry will also be negatively impacted. In 2023, around 2,000 to 3,000 vehicles were assembled locally, mainly commercial vehicles and minibuses. Prices of locally-made vehicles are comparatively higher, and the influx of cheaper used cars will exert pressure on local manufacturers. 

• Tightening age limits reduces the supply of very cheap, older used vehicles, which pushes consumers toward costlier, newer imports or locally assembled cars. For example, in Kenya, when the government proposed reducing the age limit from 8 years to 5 years, analysts projected a 20–40% rise in average vehicle prices. 

• Across Africa, stricter age limits for imported fuel vehicles are pushing consumers towards newer vehicles, which aligns with opportunities to promote EVs as alternatives. Countries like Kenya, Ghana, and Ethiopia, which have tightened import rules, have also launched EV-friendly policies such as tax exemptions, assembly incentives, and charging projects. 

Our take

• Reducing age limits raises fuel vehicle costs, which creates a policy window to push EVs. However, the success of this will depend on whether governments pair import restrictions with EV incentives and infrastructure. 

• The price of electric cars remains higher than their fuel-powered equivalents. This means that even with reduced imports of cheaper used vehicles, if EVs remain expensive and charging networks weak, consumers still pick newer fuel cars over EVs. 

• Senegal’s increase of the age cap could reduce its ability to attract international green financing linked to environmental targets. This could hamper funding for EV-related projects, including infrastructure and public transport electrification.