Chinese motor vehicle companies are setting up shop across Africa and dumping cheap EVs as domestic market shrinks and tariffs bite.
News Analysis
JOHANNESBURG—China is planning to maintain its dominance in the international electric vehicle (EV) sector by investing heavily in Africa, according to industry analysts.
Chinese EV manufacturers, bolstered by substantial government subsidies, have built—or are in the process of building—several factories in African countries.
The aim, car industry experts say, is to secure new markets in the Global South, where economic growth is happening faster than anywhere else and which includes rising geopolitical powers such as India, Brazil, Saudi Arabia, South Africa, Nigeria, and Kenya.
China also wants to be close to the source of the critical minerals needed to produce EV batteries, they said.
Analysts also said that China’s major state-owned carmakers plan to use Africa’s low labor costs to offset expected losses from higher tariffs on Chinese-made EVs exported to North America and Europe.
The United States has a 25 percent tariff on imported vehicles but has imposed a 100 percent tax on Chinese electric vehicles to protect American manufacturers.
Europe has also increased tariffs on Chinese electric vehicles, to as high as 45 percent in some cases.
Layton Beard, an independent car industry analyst, said Chinese automakers are increasingly active across Africa.
These include Beijing-backed, state-owned SAIC (Shanghai Automotive Industry Corporation) and Dongfeng, as well as BYD (Build Your Dreams), Geely, Chery, and GWM (Great Wall Motors), all of which benefit from China’s subsidies and policies.
In a 2023 address to the European Parliament, European Commission President Ursula von der Leyen accused China of flooding the world market with cheap electric cars, saying their prices are “kept artificially low by huge state subsidies.”
Some of China’s largest manufacturers continue to dump EVs they’re unable to sell domestically in developing countries, frustrating local automakers who can’t match their low prices.
South African independent economist Dawie Roodt said this is happening “at the same time as China pledges to put poorer countries at the center of the global energy revolution.”
EV sales are expected to soar in the future, as much of the world moves away from fossil fuels.
China has pledged to move toward a coal-free future but continues to build power stations that burn coal, the fossil fuel that emits the most carbon.
Some of the biggest EV markets will be in the Global South, including rising powers in Africa, where economic growth is outstripping the rest of the world as the continent industrializes and expands manufacturing bases.
