EVs could be cheaper to own than gas cars in Africa by 2040

2026-02-11 · Source: MIT Technology Review · Field: Finance & Economics — Economic Analysis & Policy, Electric Vehicle Economics, Energy Infrastructure Finance · Depth: Novice, short

Summary

A new analysis published in Nature Energy projects that electric vehicles (EVs) could achieve total cost of ownership parity with gasoline vehicles in most African countries by 2040, potentially sooner for two-wheelers. This contrasts with previous analyses suggesting fossil-fuel dominance through 2050. The study, conducted by researchers at ETH Zürich, considered sticker price, financing, and fueling/charging costs, including the integration of solar off-grid charging systems to mitigate unreliable grid access. While only 1% of new cars sold in Africa in 2025 were electric, decreasing battery and vehicle costs are driving this economic shift. Major barriers remain, including limited charging infrastructure and high financing costs, which can exceed the vehicle's upfront price in some regions due to political instability and economic uncertainty, though conditions vary significantly by country.

Key takeaway

For investors evaluating emerging market opportunities, the projected economic competitiveness of EVs in Africa by 2040, particularly with integrated solar charging, signals a significant long-term shift. You should assess specific country financing conditions and infrastructure development, as these factors critically influence EV adoption timelines and market viability. Focus on regions with improving financial stability and potential for off-grid energy solutions.

Key insights

EVs, especially with solar off-grid charging, could be economically competitive in Africa by 2040.

Principles

• Total cost of ownership drives EV adoption.
• Financing costs significantly impact EV affordability.
• Off-grid solar charging mitigates grid unreliability.

Method

The study analyzed total cost of ownership, including vehicle price, financing, and fueling/charging, specifically modeling solar off-grid charging systems for EVs to account for grid limitations.

In practice

• Consider solar off-grid charging for EV deployments.
• Address high financing costs for EV uptake.
• Prioritize two-wheelers for earlier EV adoption.

Topics

• Electric Vehicle Adoption
• Solar Off-Grid Charging
• Total Cost of Ownership
• EV Financing Barriers
• African Energy Transition

Best for: Investor, Entrepreneur, Business Analyst, Consultant, Policy Maker

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Editorial summary, takeaway, and curation by AIssential. Original article published by MIT Technology Review.