What will it take to make consumers ready for shift to electric vehicles?

The transport sector accounts for around a quarter of energy-related CO2 emissions globally and is almost completely dependent on fossil fuels. Decarbonizing the sector has therefore been identified as one of the crucial pathways of reducing global warming within the range of 1.5 degree Celsius in line with the goals of the Paris Agreement.


Enock WanderaBy Enock Wandera

The transport sector accounts for around a quarter of energy-related CO2 emissions globally and is almost completely dependent on fossil fuels. Decarbonizing the sector has therefore been identified as one of the crucial pathways of reducing global warming within the range of 1.5 degree Celsius in line with the goals of the Paris Agreement.

This has seen the push to ensure the transport sector is environmentally sustainable in the face of climate change, and also gain momentum across many regions. In Africa where the population is also projected to grow exponentially, coupled with urbanization, the desire to pursue a sustainable, low-cost energy pathway has never been more urgent.

This offers opportunity for Africa to tap into the growing global momentum to transition into the Electric Vehicles (EVs) hence limit greenhouse gas emissions.  This momentum has been boosted more by the skyrocketing gas prices because of the Russian invasion of Ukraine and ongoing concerns about climate change.

According to the International Energy Agency (IEA) Global Electric Vehicle Outlook 2021, 10 million electric cars were on the world’s roads in 2020. This was a pivotal year for the electrification of mass market transportation. Sales of electric cars were 4.6% of total car sales around the world. The availability of electric vehicle models expanded. New initiatives for critical battery technology were launched. And this progress advanced during the COVID-19 pandemic and its related economic downturn and lockdowns.
Over the last decade a variety of support policies for electric vehicles (EVs) were instituted in key markets which helped stimulate a major expansion of electric car models.
But the IEA notes that the challenge remains enormous. Reaching a trajectory consistent with the IEA Sustainable Development Scenario will require putting 230 million EVs on the world’s roads by 2030.
A most recent Ipsos Mobility Navigator Study also indicates, there is an unprecedented push by the auto industry to launch more electric vehicles, and consumer interest in Battery Electric Vehicles (BEVs) is on the rise.

Almost one-half of potential buyers in the U.S. say they will consider a fully electric vehicle for their next purchase. That is an increase of almost 400% since 2018, when only 13% indicated they would consider a BEV for their next purchase.
Ernst & Young (EY) Mobility Consumer Index (MCI) 2022 study has shown similar findings. The consumer confidence in EVs is rising fast and within that overall demand boom EVs are set to be the stars of the show. For the first time, over half of consumers- 52%- who intend to buy a car in the next 24 months say they will choose an EV or hybrid vehicle. That’s up 11% from 2021 and 22% in 2020. This growing consumer confidence in EV technology is also reflected by the jump in preference for fully electric vehicles, up from 7% in 2020 to 20% in 2022. The popularity of “stopgap” hybrid and plug-in hybrids also increased but at a much lower pace.
The MCI survey is a major global EY research program that has tracked consumer mobility patterns and buying intentions since the start of the COVID-19 pandemic in 2020. It encompasses nearly 13,000 consumers across 18 countries.
It reveals that as the preference for EVs grows, the motivations for choosing one are shifting. Green “early adopters,” whose main drivers are environmental, are now being joined by mainstream buyers with more prosaic financial concerns. The “pull” effect- the desire to be seen helping the environment by buying an EV- is now closely followed by the “push” of fears that congestion and pollution charging may hit the owners of ICE vehicles harder in the wallet. Environmental concerns are also a lower priority for second-time EV buyers than for those considering their first EV purchase.

At last year’s virtual edition of Africa Climate Week (ACW 2021), experts discussed ways to accelerate the transition from fuel-based transport to electric vehicles on the African continent, and highlighted a number of good examples of what is possible in this regard, in countries ranging from South Africa to Uganda.

South Africa was singled out as an example of a country implementing sustainable transport policies. In South Africa transportation sector accounts for 10% of total emissions. The country has put in place a policy to boost e-mobility through differentiated taxation on vehicle registration.
At the same time, charging infrastructure has grown exponentially, with charging stations deployed every 200-300 kilometers on major highways.

Many other African countries are already integrating e-mobility into their targets for reducing greenhouse gas emissions as part of their national climate action plans, known as Nationally Determined Contributions (NDCs). Rwanda's NDC targets, for example, involve mobilizing USD 900 million for electric vehicles and their associated charging infrastructures.

In Kenya and Uganda, we have seen the launch of e-motorcycle demonstration projects under the United Nations Environmental Programme global e-mobility programme. Similarly, corporate institutions in Kenya such as KenGen have recently acquired EVs while the public transport sector has not been left behind either. But one thing that is noteworthy is that despite this surge in consumer interest, sales of fully electric vehicles remain a stubbornly small part of the overall light vehicle market. Despite the many ongoing initiatives either in Africa or at the global level, the uptake of EVs has remained low.

According to the United Nations Framework Convention on Climate Change the annual uptake of conventional motorcycles is multiplying, with a 3-fold increase in motorcycle imports compared to car imports over the last 20 years in the two neighboring East African countries where the demonstration projects have been initiated. Some of the challenges reported by the projects are longer charging time, limited speed, mechanical and electrical failures, and restricted range.

This calls for urgent need for skill development in Africa. By building local skills, local mechanics, developing the practical skills, we may witness increased uptakes while at the same time solving the problem of unemployment which is high in the region.

But this not just a challenge for Africa. Ipsos Mobility Navigator 2022 study suggests a dramatic difference in how older buyers view EVs vs. their younger counterparts. Almost three-quarters of Generation Y/Z consumers say they are willing to consider a battery electric vehicle for their next purchase. In stark contrast, less than 30% of Boomers share this same sentiment. To complicate matters further, interest among Gen Y/Z buyers has grown more in the past three years than for Boomers. In other words, this gap between younger and older buyers is widening.

It is not surprising that the gap in interest is driven by very different perceptions about battery electric vehicles, particularly views about the overall cost of ownership. Most Gen Y/Z consumers (63%) agree that the overall cost of ownership for a BEV is less than for a traditional gas/diesel vehicle. Among Boomers, only 24% feel the same way.

There are some areas where older and younger consumers share common ground regarding BEVs, including battery life, recharging time, and range. These are the most common reasons both groups give for avoiding BEVs altogether. These same issues are also the top reasons both groups give for ultimately deciding not to purchase a BEV after considering one initially.

A 2020 article in the Switzerland peer review journal, MDPI, also suggested that despite some efforts in shifting from internal combustion engines to electric motors, the global market share of EVs is very low- about 1%- and this figure goes even lower for some developed countries- e.g., Australia.

The authors noted that a slow rate of uptake can be attributed to a range of critical factors that ultimately result in consumers maintaining their use of traditional internal combustion engine (ICE) vehicles. Essentially, EVs attract, on average, a higher upfront purchasing cost than many ICE vehicles, creating an initial barrier to adoption. In some cases, though, this barrier is offset by the allure of lower operational costs, such as the decrease or total elimination of petrol. As a result of high upfront cost, EV market share is primarily dominated by business purchase. Many other studies have also found that the environmental performance and thus environmental awareness associated with EVs is often more influential in the context of adoption rather than the cost of the car.

The IEA has vouched for convenient and affordable publicly accessible chargers as increasingly important as EVs scale up. In its Global EV Outlook 2021 report, it notes that to help address this gap, governments need to provide support for EV charging infrastructure through measures such as direct investment to install publicly accessible chargers or incentives for EV owners to install charging points at home. In some places building codes may require new construction or substantial remodels to include charging points, for example in apartment blocks and retail establishments.

My take is that policy makers and EV manufacturers need to lean into consumer preferences for EVs where they can; dis-incentivizing the use of internal combustion engines, especially in urban environments; and heavily incentivizing the EVs to encourage greater use.

**The author is the Chief Client Officer, Client Organization at Ipsos in Kenya