The Electric Vehicles (EVs) revolution is on an upward trajectory across the globe with major European countries setting a 2035 deadline to phase out the gas boilers or what is traditionally know as the Internal Combustion Engine (ICE) vehicles .
The now internationally accepted and adopted policies to phase out gas boilers and promote heat pumps are largely being driven by the desire to meet the Zero Emission Vehicle (ZEV) mandate being implemented by major European countries to mitigate effects of climate change and the unstable pump prices .
The ZEV mandate is a policy tool requiring car manufacturers to sell a certain percentage of electric vehicles yearly to avoid fines. Initially, this was a yearly target, with the percentage of ZEVs required to sell increasing until 100 per cent is reached in 2035.
Luckily , unlike past revolutions this time around, the African continent is not being left behind . Already , there are 10 African countries that have joined the multi trillion US dollars global automotive industry –including Uganda which has a niche for electric vehicles .
Late last year Uganda’s First Deputy Prime Minister and Minister of East African Community Affairs, Rebecca Alitwala Kadaga, reiterated the government’s commitment to fully transition to electric mobility in public transport by 2030- in a concerted effort to ensure sustainable development.
Kadaga said that t Uganda was fostering an environment ripe for innovation in the green energy sector, with favorable policies, subsidies, and tax incentives all aimed at reducing carbon emissions and promoting greener energy.
The government of Uganda through the Science, Technology and Innovation Secretariat –Office of the President , she said , has taken definitive steps towards building a sustainable and scalable mobility ecosystem.
This in effect means that government is positioning Uganda as a net source rather than a consumer of mobility solution in Africa.
She was speaking as the guest of honour at a one day Kiira Vehicle Plant Open Day and Mobility Expo , the first of a kind that was held on the African continent .
So the question then arises as to how Uganda’s automotive industry flagship Kiira Motors will make electric vehicles (EVs) affordable and accessible to Ugandans to meet the ambitious set targets of 2030 ?
In order to confront this multifaceted challenge executives at Kiira Motors Corporation (KMC) led by the CEO Mr. Paul Isaac Musasiszi and the Executive Chairman Prof. Sandy Stevens Tickodri-Togboa said the company is exploring several strategies to address the market needs of Ugandans and the rest of Africa and these include among others;
Reducing Import Costs
By establishing the Kiira Vehicle Plant in Uganda and focusing on local assembly and eventually component manufacturing (like batteries), KMC can significantly reduce the costs associated with importing fully built vehicles. This includes tariffs, shipping, and logistics.
Optimized Production for Local Conditions
The company is now designing and manufacturing EVs specifically tailored to the road conditions, climate, and usage patterns in Uganda and Africa and this is intended have more cost-effective and durable vehicles.on the roads. Already, Kiira Motors Electric vehicles are plying Uganda’s roads and government agencies and private individuals are placing orders for these tested and proven products.
Government Incentives and Policies
When it comes to having conducive policies for the adaptation of EVs in Uganda KMC is pushing for tax breaks and subsidies. The company is currently working with the government to advocate for policies that make EVs more affordable for consumers. This includes tax exemptions of say 0% Import Duty and VAT for EVs produced in Uganda and charging infrastructure. These tax incentives will play a significant role for early adopters.
Promoting Favorable Loan Schemes
KMC is also engaging several financial institutions to develop affordable loan schemes specifically for EV purchases . This intervention will make EVs more accessible to a wider range of Ugandans by exploring Carbon and Climate Finance Opportunities.
Government as a major offtaker through itsprocurement systems
The Corporation is also engaging government ministries, agencies and parastatals to prioritize the purchase of EVs produced in Uganda for their fleets with a view of creating a significant initial offtake market and potentially drive down production costs through economies of scale.
Innovative Financing and Ownership Models
Another market entry innovation that has been crafted by KMC is the leasing and subscription Services. Instead of outright purchase, KMC is now offering leasing and subscription models for EVs, which offer lower upfront costs and predictable monthly payments, making them more accessible.
Battery-as-a-Service (BaaS)
KMC executives further stated that the company is also exploring possibilities of separating the cost of the battery from the vehicle purchase and offering battery leasing services to significantly reduce the initial cost of EVs, as the battery is often the most expensive component 30-60% of the EV cost of production.
Microfinance and Group Ownership
Exploring partnerships with microfinance institutions and supporting group ownership models with potential to enable lower-income individuals to access EVs collectively for shared transportation needs is another option being floated by KMC.
