Will Botswana’s gamble on local EV assembly pay off?

From the newsletter

Botswana has unveiled 68 electric cars and buses assembled locally with the help of two Chinese electric vehicle manufacturers, Skywell and CHTC Kinwin. This includes 35 electric SUVs and 33 electric buses. But with cheaper EVs flooding Africa, especially from China, questions abound as to whether Botswana’s attempt to make EVs locally is ill-fated. 

• Botswana, with a population of just 2.5 million, is one of the smallest motor vehicle markets in Africa, with less than 10,000 units sold annually. In 2024, the country imported just 64 electric cars from China.

• This has raised questions over whether Botswana’s EV-making is sustainable. Imported cars may be cheaper and higher quality. The government could be forced to spend millions to subsidise the industry.

More details

• The components used to make the vehicles were procured by the Botswana Institute for Technology Research and Innovation (BITRI). Skywell partnered with BITRI in assembling electric SUVs in the Southern African country, while CHTC Kinwin is assisting in producing electric buses.

• The electric SUVs are equipped with a 150 kW motor, delivering a peak torque of 320 Newton meters and offering a travel range of about 520 km on a full charge. The electric town buses can travel up to 250 km before requiring a recharge. 

• But Botswana’s endeavour to make its own EVs is costly. Each of the electric cars is for instance costing $34,000 to make. It means the eventual sales price will be much higher, bringing affordability challenges for local citizens.

• Botswana already has bitter lessons to learn from its past. In the 1990s, the country ventured into making motor vehicles. This was through the Motor Company of Botswana (Pty.) Ltd, which was a joint venture with Hyundai Motor Company, assembling Hyundai vehicles from CKD kits from 1993. The company however collapsed in 2001 after taking on massive debts that it failed to repay.

• This time, the most likely scenario is that as cheap EV imports start to flood Africa, especially from China, Botswana will struggle to sell its locally-made EVs due to high prices. This will force the government to support the venture to continue operating or fold due to market pressures, especially as demand for EVs in Botswana is still very low.

• But Botswana is not the only African country that seeks to make EVs. Egypt has made serious progress – also in partnership with a Chinese firm – in making its first electric car. Morocco is also targeting to make thousands of EVs this year, while South Africa is also venturing into local EV assembly and manufacturing.

• While demand for EVs in Africa is growing fast – sales more than doubled to 11,000 in 2024 - imports will continue to form the bulk of EV supply on the continent for years to come. Major Chinese manufacturers such as BYD, Xpeng, Nio, Zeekr, Chery and Geely are increasingly turning their attention to foreign markets, including Africa, to sell their vehicles as the local market in China becomes saturated. 

Our take

• Widespread adoption of Botswana’s locally-made EVs will be slow due to the higher prices compared to cheaper imported alternatives from China and the relatively low demand for EVs in the country currently.

• Unless Botswana implements a comprehensive strategy that includes robust local demand stimulation, significant export market access, or a niche focus that avoids direct competition with mass-market imports, the current EV assembly initiative risks a similar fate to its previous failed attempt to make motor vehicles. 

• African countries should avoid the rush to assemble or manufacture their own EVs. Instead, they should ease barriers to importation of EVs, which will lower the cost of transportation and create economic growth.