President Mokgweetsi Masisi is an exorbitant optimist, a good quality to possess when you are attempting to launch a revolution in the car industry.
Promising to change mass market industrialisation with something seemingly far-fetched may not pass as a great reputation to have, let alone acknowledge. President Masisi wishes to see Botswana successfully develop an electric vehicle (EV)
This bullish announcement was first made at a BDP Regional Congress in February 2019, a few days after a return from Davos, Switzerland, where Audi provided 50 green electricity powered EVs for the annual meeting.
As part of the sustainable mobility for the World Economic Forum, Audi as exclusive shuttle partner since 1987, wanted to demonstrate a potential application of used batteries from electric cars. Bram Schot, Chairman of Audi highlighted that, ‘we are focusing consistently on sustainable mobility solutions for the future and can demonstrate our definition of practical electric mobility live, and let many people experience it directly’. When in Tlokweng President Masisi said, ‘I have challenged the Ministry of Trade and Investment. We are going to develop an electric car in Botswana. Our copper reserves are way too much. I have challenged the Ministry of Energy to develop a copper strategy’.
Doubting Thomases ponder why the challenge was not directed to engineers at the Ministry of Science & Technology. Some commentators point to electricity supply challenges asking if the EV wouldn’t be a parked souvenir owing to insufficient infrastructure. Drafters of the BDP manifesto wave the EV as a 2019 electoral promise. Perhaps mirroring the thoughts of its leader, BDP commits to ‘develop the automotive industry to support Botswana’s first car’ – an electric car.
At the 58th BDP Congress in Mochudi, President Masisi said, ‘our commitment to create an electric car, as mentioned in our manifesto is more than capable of delivering more than a 100 000 jobs’. On Tuesday 31st July 2019, President Masisi further reiterated the dream of an EV at a kgotla meeting in Shoshong. A critical question remains: Can President Masisi achieve this dream of a Botswana generated EV?
It is with good reason to be sceptical.
EVs have existed since the 1900s. Limitations to cover long distances became a barrier to mainstream adoption. Mass production of combustion engines made fuel based cars cheaper than EVs. This led to a decline and by 1940 they were almost forgotten. Carbon dioxide emissions by fuel based cars inevitably caused environmental deterioration. Introduction of global clean environmental acts, extensive research and developmental and EV technological advancements over the next few decades saw Toyota Prius become the first mass produced hybrid electric vehicle in 2000.
In 2006 Tesla launched a battery powered EV with a range of 300kms. Global sales increased by 73% in 2018 to 1.3 million units sold annually. Worldwide sales of electric vehicles jumped more than threefold in two years with EVs currently at 5 million and 2% of all vehicles. Factors pushing sales in 2018 were a demand from China thanks to government incentives, the launch of the Tesla 3 Model and the diesel crisis in Europe. China is the largest market for electric cars, with 61% of worldwide sales, followed by the USA at 16% and then Norway with 3.6% Norway has the highest penetration per capita of 1 in 2 vehicles being an EV. South Africa leads with two brands, the BMW i3 and i8 and the Nissan Leaf with Land Rover Jaguar soon to penetrate the market. In March 2019, Minister of Transport Blade Nzimande confirmed a total of 867 vehicles registered in South Africans since 2015. EVs in South Africa are priced between R600 000 and R750 000. Gauteng and the Western Cape make up 80% of ownership with charging stations limited to these two provinces.
The political climate accentuates prioritization of EVs. Tax exemptions, subsides, grants to manufacturers and consumers show how government take the seriousness of the EV. Uganda’s Ministry of Science, Innovation & Technology has set a $40 million budget for the construction of a facility with an estimated annual production capacity of 5,000 units, and is expected to employ about 14,000 people when full production starts. Kenya expects to have 150 EVs by 2020.
Botswana is heavily dependent on oil, exporting nearly P1 billion monthly in return for a 100 million litres of a 50/50 split of diesel and petrol. Employment in oil and distribution is low. Conveying the expenditure from purchasing imported oil to other avenues could create employment opportunities. An EV consists of only 3 moving parts, in comparison to a 1000 in fuels based vehicle. Mass production, competition for market share, reduction in battery costs and economies of scales see the EV pegged at an equivalent of P400 000 – P500 000.
Despite the growth in EVs, the ride is with its hurdles. Charging any number of those vehicles will cause a surge in demand for electricity. Whilst the demand for oil to power vehicles might diminish, that could be translated to power plants opting for oil as a source to producing electricity. Accessibility, speed and convenience are challenges which need to be addressed when developing the EV charging infrastructure. Where and how quickly drivers will charge vehicles, and how much investment is needed must be considered if Botswana wants to modernise. The scarcity of cobalt and lithium, components of the long range battery poses a threat. Furthermore, battery lifetime, charging station availability and the initial cost of purchase are some factors which could prevent customers purchasing EVs. When speaking in Mochudi, President Masisi indicated that there were opportunities considering access in the African continent.
Some years ago Botswana thrived on two Hyundai assembly plants that employed just about 1500 people. The manufacturer exported individual parts that were assembled in a complete knock down plant that welded chassis and a semi knocked down plant to a finished vehicle in Botswana and sold locally or exported to South Africa.
As South Africa moved to protect its car manufacturers, a quota of 1000 vehicles a month was introduced when Botswana needed to sell 1800 to meet the obligations of running the plants. Neighbours are not necessarily friends in the fight to create jobs. Hyundai Botswana eventually shut down. And then there is a small matter of Mogoditshane. Grey imports have affected sales of brand dealerships especially as substitutes to low level brands. Premium brands have hardly been affected. For the level of required upstream industrialization, potentially diminished job creation and regional market dynamics, is it worth Botswana’s efforts despite leadership appetite to embark on this journey? Does it make sense to pay P400 000 for an EV that is best used for commuting along certain roads suited with the right charging station? Maybe that cannot be a mass market car but a niche vehicle. David McCullough Jr says, ‘Climb mountains not so the world can see you, but so you can see the world’.
President Masisi should be given credit for thinking beyond the obvious despite the figures being overly exaggerated. Uganda’s plant will employ 14 000. Botswana will needs six such plants to employ 100 000. With Uganda and Kenya setting up to occupy Central and East Africa, and South Africa to the south, market access or excess for Botswana is diminished to Zambia and Zimbabwe.
The journey to Davos showed President Masisi the EV. Is it realistic? As Ama Ata Aidoo captured in “The Dilemma of A Ghost”, I don’t know – I can’t tell.
You be the judge!