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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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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.