German luxury EV manufacturer enters Africa

September 15, 2025

From the newsletter

Smart Europe, a subsidiary of Mercedes-Benz owner Daimler, has introduced its lineup of luxury electric cars to Morocco, its first market in Africa. The electric cars are designed in Europe and manufactured in China. Mercedes-Benz and BYD distributor Auto Nejma has been picked as Smart’s distributor. Orders for the Smart #1, Smart #3 and Smart #5 models open this week.  

  • Chinese EV companies like BYD are winning the price war, making them early leaders in the mass market segment in Africa. European companies like Smart, Mercedes-Benz, Porsche and BMW are focusing on the luxury market to compete.  

  • Africa’s EV market is small, and the luxury segment is even smaller. This market is tipped to grow as the number of high-net-worth individuals and incomes in most countries rise. 

More details

  • The Smart #1 is a compact, spacious and premium SUV, while the Smart #3 is a stylish and dynamic SUV coupé, offering a sporty design. Meanwhile, the Smart #5, the brand's first mid-size SUV, is the company’s most spacious and versatile vehicle, featuring an 800-volt platform for ultra-fast charging and extended range, with adventure and off-road-focused features. 

  • Adil Bennani, Managing Director of Auto Nejma, said: “We are particularly excited to introduce Smart through our network of six Mercedes-Benz showrooms in the shop-in-shop format in Casablanca, Rabat, Agadir, Marrakech, Tangier, and Fez by 2027. Moroccan consumers are increasingly looking for vehicles that reflect their sophisticated urban lifestyle while embracing sustainability, which Smart offers.” 

  • Smart joins a growing list of European companies that are introducing luxury EVs to Africa, mainly in South Africa, Morocco and Egypt, which are the continent’s leading auto markets. Mercedes-Benz for example has a significant presence in South Africa, offering a range of its EQ electric models, including the EQA and EQB SUVs.

  • BMW's electric series, such as the iX SUV, are sold on the continent, mainly in South Africa, while Audi's e-tron family of EVs is also officially sold in South Africa, providing consumers with premium electric SUV and sedan options. Porsche, the iconic sports car manufacturer, offers its high-performance electric car, the Taycan, while Jaguar's I-PACE electric SUV is available through official retailers in both South Africa and Kenya, marking a significant presence in East Africa.

  • At the same time, Chinese companies are also growing their presence in the African luxury EV market. BYD, which is known for mass market EVs, is also introducing top-of-the-range electric cars. Zeekr, a premium electric brand from Geely, has established an official presence in Morocco and Egypt in a strategic entry into the North African market. 

  • The broader African luxury car market is estimated to be valued at about $15 billion and is expected to grow in the coming years. Within the EV segment, a gradual decline in prices is expected to lead to more sales even as EVs start to become more mainstream in Africa. However, the largest portion of demand for luxury electric cars is expected to be driven by a handful of countries, mainly South Africa, Egypt and Morocco. 

Our take

  • European brands are likely to double down on their luxury positioning. They will likely emphasize heritage, premium build quality, and exclusive experiences to differentiate themselves from high-end Chinese competitors like Zeekr and BYD, which may compete more on technology and value. 

  • After establishing a presence in the primary markets of South Africa, Morocco, and Egypt, these luxury brands will likely target other African cities with a growing population of high-net-worth individuals. The next logical expansion points could include major economic hubs like Lagos, Nairobi, and Accra.

  • The current focus by luxury EV companies is heavily on SUVs and SUV coupés. The next wave of introductions will likely include a wider variety of body styles to capture different segments of the luxury market, such as high-performance sedans and executive saloons.