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BUSINESS STRATEGY
Africa looks set to be a battleground for Chinese EV auto brands
By our African Marketing Confederation News Team | 2024
Ambitious Chinese electric vehicle companies battling high import tariffs in Europe and the US, are setting their sights on Africa instead.
A scene from the Neta Auto launch in Kenya. Photo: Neta Auto
Africa seems set to become a battleground for Chinese electric vehicle (EV) brands as they seek new markets away from the high-tariff countries of Europe and North America.
Neta Auto, for example, opened its first flagship store in Kenya at the end of June 2024 and has plans to enter 20 countries, open 100 stores, and achieve an annual sales volume over 20,000 EV vehicles within three years in Africa.
Neta is a brand developed by Hozon New Energy Automobile, an EV manufacturer established in 2014 in the Chinese city of Shanghai. Last year it produced 127,500 vehicles and employs around 9,000 people.
“The reason for Neta Auto choosing Kenya as its entry point to Africa is based on in-depth analysis of its market potential and strategic vision of global strategies,” the company says in a press release.
“Kenya not only serves as a gateway to Southern, Central and Eastern Africa, but is also a key node in the Belt and Road Initiative. By leveraging Kenya’s strategic location, Neta Auto aims to deepen economic and trade ties with African countries.”
Other Chinese EV brands establishing a presence
According to the online publication Semafor Africa, other Chinese EV brands are also attempting to establish a presence on the continent. The BYD brand opened in South Africa last year and in Rwanda in 2024. Another company, XPeng, has commenced operations in Egypt.
“The push into Africa by EV companies comes amid the imposition of import tariffs of up to 38% on Chinese electric vehicles by the European Commission in June, over concerns that subsidies enjoyed by the Chinese companies were giving them an unfair advantage in the market,” explains Semafor Africa.
“US President Joe Biden in May also quadrupled tariffs on EVs from China to 100%, from 25%, essentially locking them out of the American market.”
The publication Nikkei Asia reports that Chinese players see EVs and plug-in hybrids as the key to catching up in the region. Their strategy is to expand their lineups in Africa and gain greater recognition in order to draw environmentally conscious consumers, even at higher price points.
They do have a long way to go, though. European and Japanese auto brands tend to dominate African markets, while EVs have so far only had very limited appeal. This is partly due to the high cost of electric vehicles, and partly a result of limited infrastructure to support the daily operation of EVs on the continent.
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