Interest rates on EV loans remain stable

June 10, 2025

From the newsletter

The financing cost for electric vehicles remained fairly stable over the past month, according to a monthly survey by Mobility Rising. The survey collects data on EV loans from three separate lenders in Kenya, South Africa and Nigeria. It showed that EV loans remained unchanged in Kenya and Nigeria, while one lender reduced their rates in South Africa.   

  • The survey, which is conducted every first week of the month, shows that the majority of loans are short-term, with tenures ranging between 12 and 60 months.  

  • Nigeria has the highest benchmark lending rate. This is followed by Kenya, which has the second costliest loans, while South Africa continues to have the cheapest cost of financing. 

More details

  • Our analysis shows that the cost of financing in Nigeria ranges between 32% per year offered by Qoray Mobility and 34% per year offered by The Alternative Bank in June, the same as in May. The majority of the loans are payable over a period of 12 months, while some are paid over 18 months. 

  • In Kenya, interest on loans to purchase EVs remained unchanged between May and June. The interest rate charged by M-Kopa for electric motorcycles ranges between 28% and 44% while Watu Credit charges between 32% and 36%. Banks charge the lowest rate on EV loans, with NCBA charging 18.5% annually and KCB charging 18%.  

  • The cost of EV financing in South Africa reduced slightly, with Nedbank’s interest rate going down from 7.95% per year in May to 7.7% in June. However, the cost of loans issued by WesBank and Absa remained unchanged at 7.4% and 5.4% per year respectively.  

  • Interest rates on EV loans are expected to remain stable in Nigeria following the Central Bank of Nigeria’s decision to hold its benchmark interest rate at 27.5% last month for the second consecutive time. The bank’s monetary policy committee (MPC) reached the decision unanimously after annual inflation fell from 24.23% in March to 23.71% in April. 

  • On the other hand, interest rates on loans are expected to go down in South Africa after the South African Reserve Bank (SARB) cut the benchmark interest rate by 25 basis points to 7.25% last month. SARB will make the next decision on interest rates on July 31, 2025, and borrowers will be hoping for further interest rate cuts.   

  • In Kenya, the Central Bank of Kenya has been steadily lowering the benchmark interest rate this year as inflation reduces. The apex lender will make another decision this month, with analysts expecting a further cut in rates. However, while banks often reduce or increase interest rates in line with the Central Bank’s decision, asset financiers do not adjust their rates in a similar way.  

  • Lower interest rates are essential for electric mobility to succeed in Africa. EVs generally have a higher purchase price than comparable internal combustion engine (ICE) vehicles. This is a significant hurdle in African markets where purchasing power is lower.  

Our take

  • South Africa, with its lowest cost of financing and recent interest rate cuts by the SARB, presents a strong opportunity for accelerating EV adoption. This, coupled with an influx of cheaper EVs especially from Chinese companies like BYD, will speed up EV purchases. 

  • Pay-As-You-Go (PAYG) and Lease-to-Own models are becoming more popular for financing EV purchase. These models have proven successful for affordable assets like solar home systems and could be widely adapted for electric two and three-wheelers. 

  • The continued decline in global EV prices, in addition to the proliferation of cheaper used EVs, will lessen the need for financing in Africa. The lower prices will enable more buyers to afford purchasing the vehicles outright.