China’s GAC eyes its first African EV car assembly plant

From the newsletter

Chinese automobile manufacturer GAC Motor is considering Ghana as a possible location for a new electric vehicle assembly plant. GAC already has a fuel car assembly plant in Nigeria with a capacity of 5,000 vehicles annually. The company launched two new-energy vehicles in Ethiopia in May and continues to expand its dealerships across Africa.  

• While EV assembly in Africa is growing, production is mainly concentrated in the two-wheeler and three-wheeler segment. The continent is increasingly turning to foreign companies, especially Chinese, to help establish electric car and bus assembly facilities. 

• Currently, electric car assembly in Africa is largely unviable, especially as demand remains very low. Even leading EV firms in China and the US rely on state subsidies to make the business viable. It means that without massive investment and support from African governments, it will take many years for local assembly to take off. 

More details

• Ghana’s Minister of Foreign Affairs Samuel Okudzeto Ablakwa last week stated that GAC had expressed strong interest to establish an EV plant in Ghana during the minister’s recent visit to China. He said Ghana’s growing lithium potential had become a strong attraction for Chinese industry, with GAC seeing the country as a viable hub for EV manufacturing in West Africa. 

• GAC produces several EVs and plug-in hybrid electric vehicles (PHEVs) under its Aion and Trumpchi brands. Its notable models include the Aion Y (EV), the Trumpchi E9 (PHEV), and the Trumpchi GS4 PHEV. Additionally, GAC is launching new PHEV derivatives of the Emzoom and Emkoo models. 

• The automaker is actively expanding its presence in Africa, particularly in South Africa and West Africa. In South Africa, GAC is partnering with Salvador Caetano Auto to establish a strong dealership network and introduce new models like the Aion Y electric SUV and the new GAC Motor M8. It is also focusing on expanding its after sales service and support network. 

• GAC’s interest comes at a time when Ghana has put in place incentives to attract automakers, including tax breaks and import duty exemptions for semi-knocked down (SKD) and completely knocked down (CKD) vehicle kits. Toyota, VW, Nissan, and Kantanka are already assembling vehicles in Ghana. This means a base of workers, supply chains, and logistics already exists. 

• Ghana’s Energy Transition Framework aims for a 10% EV penetration by 2030. Currently, the West African country has an estimated 17,000 EVs, mainly two-wheelers. To achieve its EV adoption target, Ghana is developing an e-mobility framework, supported by institutions like UNDP and UNEP. It is also actively working on EV charging infrastructure regulations and standards.

• But to create a viable EV assembly industry, Ghana will have to lower taxes on imported components, which are mainly sourced from China. Ghana does not yet produce batteries, e-motors, or other critical EV components. Further, EVs remain relatively expensive for the average consumer, which means demand is still low. However, local assembly has the potential to create jobs and build Ghana’s technical capacity in EV assembly and manufacturing. 

Our take

• Ghana should finalise its targeted EV industrial policy that offers additional incentives for EV-specific assembly beyond general auto policies, including tax breaks for EV components, land access, and infrastructure support, especially for SKD/CKD operations.

• It should also negotiate strategic value-add agreements with GAC, such as commitments to source components locally over time, help develop Ghana’s lithium value chain, and expand after-sales and dealership networks to ensure long-term ecosystem growth.

• GAC should start with small-scale SKD assembly of PHEVs like the Trumpchi GS4 or E9 that are more adaptable to current fuel-electric hybrid infrastructure, before scaling up to full EV models like the Aion Y, depending on market response.