Why Kenya could be getting ahead of itself in electric vehicles drive
The transition to electric vehicles (EVs) cannot be gainsaid as the elimination of tail pipe emissions is a central part of the climate change offensive. Kenya’s electric mobility ambitions led it to sign the COP26 declaration on accelerating the transition to 100% zero-emission vehicles. The brutal truth is that we have little choice about switching to EVs because car manufacturers will over time abandon internal combustion engines (ICEs) given the stance of regions like the EU, which will effect a ban on new ICE vehicle sales by 2035.
The question is whether Kenya is ready for an exodus to EVs. In its 2023 Budget Policy Statement, the Government promised to provide financial and tax incentives for PSVs and commercial transporters to convert to EVs. The excise duty on EVs is already lower than on ICE vehicles but as EVs are expensive due to the high cost of batteries, the lower duty rate may not be effective in achieving affordability. On the positive side however, the prohibitive upfront cost has led to the development of innovative financing models such as BasiGo’s Pay-As-You-Drive model, which keeps the cost of electric buses similar to traditional buses, while allowing operators to pay separately for the battery, based on kilometres driven.
On the vital issue of charging facilities, we are faced with two challenges. First, Kenya Power was recently reported to have stated that the country’s power generating capacity can currently only support charging of up to 100,000 EVs. There is therefore work to be done to enhance power generation in the country if we are to achieve a switch to EVs. This would need to be coupled with development of proper charging infrastructure as we currently have relatively few of these. The 2023 Budget Policy Statement states that the Government will roll out EV charging infrastructure in urban areas and along highways but there is always the thorny issue of funding. PPPs would enable Government to partner with the private sector and project financiers to set up the charging infrastructure but PPPs notoriously take years to reach financial close. The ongoing PPP reforms are intended to reduce project procurement timelines.
In the absence of adequate public charging stations, EV owners can charge their EVs at home overnight which could strain the power supply. In addition, charging at home may be more costly than the charging stations which are expected to benefit from a special lower electricity tariff. Charging EVs at home also presents a challenge for those who are not connected to the national grid or a reliable alternative.
Based on media reports, Kenya Power and KenGen are proposing to install public charging stations. The target for the KenGen stations is 50,000 buses and 2 million motorcycles which raises the legal issue of fair access to charging points. Seeing as development of adequate power generation and charging infrastructure will take time, it makes sense to prioritize access for PSVs as this creates a greater impact. That said, one can’t wish away private EVs in the meantime, so there needs to be a just and transparent policy to ensure access for all and avoid disputes. The issue of accessibility to public charging facilities also refers to their geographical distribution across the country. The Government can offer enhanced fiscal incentives to motivate developers to set up charging stations in remote areas.
The installation of EV chargers must be guided by well-considered regulations. If we borrow a leaf from the UK’s charge points rules, chargers are required to contain minimum smart functionality to enable them monitor and communicate electricity usage so that the charging station can delay or slow the charging when necessary to protect the grid. The chargers also need to meet certain user safety standards.
Ultimately, an enabling regulatory framework is needed for all aspects of the EV ecosystem. Issues such as disposal/ recycling of EV batteries could be particularly thorny, considering that a large percentage of cars imported into the country are second hand. Without proper regulation and facilities for dealing with dead EV batteries, we could quickly end up with tonnes of battery waste to deal with – akin to the plastics scourge plaguing the world at the moment. Other issues for urgent regulation will include licensing and inspection of charging stations; fiscal incentives for developers, manufacturers, dealers and buyers; pricing mechanism and controls, minimum standards for charging equipment; and qualifications for EV technicians.
The article was featured in the Business Daily and can be accessed here.