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BYD Seagull
BYD Seagull, image courtesy of China's Ministry of Industry and Information Technology


The BYD Seagull Could Be A Game-Changer For Africa’s Automotive Sector

The transition to electric mobility is well underway around the world. Over 25 million electric cars have been sold over the last 14 or so years around the world. Over 13 million of these electric vehicles were sold last year. Most of these are in China, Europe, and North America. A report by the IEA says the Net Zero Emissions by 2050 Scenario sees an electric car fleet of over 300 million globally in 2030. Electric cars will be accounting for 60% of new car sales by then.

Historically, the overall African new vehicle sales market share per year has been about a hundredth of the global vehicle sales, despite having a population of over 1 billion. This has resulted in most African states having very low motorization rates. Only a handful of countries have motorization rates above 100 vehicles per 1,000 people. The majority of countries have rates below 50 passenger vehicles per 1,000 people. To put this into perspective, South Korea and Germany have rates above 500 passenger vehicles per 1,000 people. The US has an even higher rate that’s closer to 800 vehicles per 1,000 people, according to a study by Siemens Stiftung.

New vehicle sales don’t tell the full story though, as over 90% of vehicles imported in most African countries are used vehicles. This is due to several factors such as lower disposable incomes and lack of access to affordable long term car financing and leasing facilities. Therefore, most people cannot afford a brand new car. Most consumers who buy cars in a lot of countries on the continent therefore opt for used vehicles imported from places like Japan and Europe. An 8-year-old used vehicle would land at a price that is more affordable. Depending on the type of vehicle, its age, mileage, and a country’s import tariffs and taxes, the most popular imported used vehicles such as small hatchbacks are priced from about $6,000 to $14,000. Some of the other common used vehicles such as mid-sized sedans and compact SUVs range from $12,000 to about $22,000.

The proliferation of these used vehicle imports has decimated the local motor vehicle assembly industry in countries like Zimbabwe and has stalled the growth of assembly plants in other markets. At the height of the motor vehicle assembly industry in Zimbabwe for example, the assembly plants used to produce at least 20,000 brand new units of various passenger cars. Many factories feeding into the assembly plants along the associated downstream industries have had to shut down, resulting in many people losing their jobs. Compare this with about 100,000 used vehicles imported into the country per year. The situation is the same in many African countries. The price difference between a brand new ICE car and an equivalent 8-year-old ICE car is just too high, hence the business of importing and selling used vehicles continues to flourish. This setup is ripe for disruption.

Small affordable EVs from China and India present the best opportunity so far to disrupt this market. A brand new city EV with over 250 km range for about $10,000 to $14,000 or so could really change things up, given a choice between a brand new $10,000 EV with over 200 km real range and an 8-year-old small hatchback for $8,000 or so. EVs already have the advantage of lower total cost of ownership, now if we could have these small EVs that are close to price parity with these used vehicle imports, we could see one of the biggest transformations ever in Africa’s auto sector.

Several countries import over 50,000 used vehicles per year. For 20 countries, that is at least 1 million vehicles per year.  If we say 30% of them are in this small vehicle segment, that’s at least 300,000 vehicles per year, which would make a decent addressable market to start with.

These 300,000 could be shipped as completely knocked down kits and then assembled locally, progressively increasing the contribution of local components. The potential benefits that could be derived from this would be huge for countries on the continent. These include:

  • Job creation at the newly set up or expanded assembly plants
  • Development and expansion of businesses and associated component manufacturers along the downstream industries
  • Beneficiation of local resources
  • Skills development and training of workers in new industries
  • Partnerships with local universities, technical colleges and research institutions in various areas of research and development
  • Increased adoption of EVs resulting in reduction of fossil fuel imports, saving much needed foreign currency.
  • Critical mass of vehicles would catalyze the growth of flexible vehicle financing platforms and other new innovative business models backed by good warranties. Currently the used vehicles don’t have any warranty.
  • Lower operational costs for ride-share driver partners as well as commercial fleet operators such as car rental businesses boosting fleet sales.
  • Growth of synergistic businesses such as distributed solar for charging EVs

A vehicle I think could kickstart this if produced at scale to feed African markets is the upcoming BYD Seagull. The BYD Seagull is a small battery-electric vehicle that has a 30.7 kWh LFP battery and a 55 kW (75 hp) motor. It will be launched later this quarter in China, and it will be priced from $8,700 in China. This means that it comes in a segment just below the BYD Dolphin, another popular member of BYD’s Ocean Series. The Seagull was recently spotted in pink in China. The Seagull’s dimensions are given as 3780 x 1715 x 1540 mm with a wheelbase of 2500 mm. $9,000 for a brand new small 5-door hatchback with a 30.7 kWh LFP battery from BYD? This could be a real game changer.

BYD is probably best placed to lead in the production of these small affordable vehicles like the Seagull in large volumes and to take them to the world. BYD has been accelerating its overseas expansion program and launched one of its key models, the ATTO, in several markets last year. The more affordable small hatchback Dolphin is also set to enter more markets this year as well. However, I am curious to find out BYD’s plans for the Seagull and how many markets it will be introduced in the near future. This could really move the needle in many countries in terms of accelerating EV adoption.

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Remeredzai Joseph Kuhudzai has been fascinated with batteries since he was in primary school. As part of his High School Physics class he had to choose an elective course. He picked the renewable energy course and he has been hooked ever since. At university he continued to explore materials with applications in the energy space and ending up doing a PhD involving the study of radiation damage in High Temperature Gas Cooled Nuclear Reactors. He has since transitioned to work in the Solar and Storage industry and his love for batteries has driven him to obsess about electric vehicles.


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