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

The transition to electric mobility is well underway around the world. In the last 14 years or so, he has sold over 25 million electric vehicles worldwide. Last year, these electric vehicles sold over 13 million of his. Most of these are in China, Europe, and North America. According to the IEA report, Net zero emissions scenario by 2050 predicts that by 2030 there will be over 300 million electric vehicles worldwide. By then, electric cars will account for his 60% of new car sales.

Historically, Africa’s total annual new car sales market share was about 1/100th of global car sales, despite a population of over 1 billion people. This has resulted in very low motorization rates in most African states. Only a handful of countries have a motorization rate of over 100 cars per 1,000 people. Most countries have less than 50 passenger cars per 1,000 people. To put this into perspective, South Korea and Germany have a ratio of over 500 passenger cars per 1,000 people. According to Siemens Stiftung research, in the United States he has an even higher ratio of nearly 800 cars per 1,000 people.

However, with over 90% of vehicles imported in most African countries being used vehicles, new vehicle sales alone do not tell the whole story. This is due to several factors, including lower disposable income and lack of access to affordable long-term auto financing and leasing facilities. Therefore, most people cannot afford to buy a new car. Therefore, most consumers who buy cars in many countries of the continent choose used cars imported from places such as Japan and Europe. An eight-year-old used car lands at a more affordable price. Prices for the most popular imported used cars, such as small hatchbacks, range from around $6,000 to $14,000, depending on vehicle type, year, mileage, and country import duties and taxes. Other typical used cars, such as midsize sedans and compact SUVs, range in price from $12,000 to around $22,000.

The surge in imports of these used cars has decimated the car assembly industry in countries like Zimbabwe and stalled the growth of assembly plants in other markets. For example, at the height of Zimbabwe’s automobile assembly industry, assembly plants produced at least 20,000 new units of various passenger cars. Many factories supplying assembly plants along related downstream industries were forced to close and many people lost their jobs. Compare this to approximately 100,000 used cars being imported into the country annually. The situation is the same in many African countries. The business of importing and selling used cars continues to thrive because the price difference between a new ICE car and an equivalent 8 year old ICE car is so great.

Affordable small EVs from China and India offer the best opportunity to disrupt this market so far. If you can buy a brand new urban EV with over 250 km range for about $10,000 to $14,000, then a $10,000 brand new EV with over 200 km real range and $8,000 or so. EVs have the advantage of a lower total cost of ownership, but if you can get your hands on these small EVs that are close in price to importing these used cars, it could be one of the biggest transformations to date in the African automotive sector. One can see

Some countries import more than 50,000 used cars annually. In 20 countries, that equates to at least 1 million vehicles per year. Given that 30% of them are in this small car segment, that’s at least 300,000 cars per year, which would be a good addressable market to begin with.

These 300,000 will be shipped as fully knocked-down kits and then assembled locally, allowing for incremental contributions of local components. The potential gains from this would be enormous for the countries of the continent. These include:

  • Job creation in new or expanded assembly plants
  • Development and expansion of businesses along downstream industries and related parts manufacturers
  • Utilization of local resources
  • Skill development and training of workers in new industries
  • Partnerships with local universities, colleges and research institutes in various R&D fields
  • The spread of EVs will reduce fossil fuel imports, saving the necessary foreign currency.
  • A critical mass of vehicles will drive the growth of flexible vehicle financing platforms and other new and innovative business models backed by superior warranties. There are currently no warranties on used cars.
  • Reduce operating costs and drive fleet sales for rideshare driver partners and commercial fleet operators such as car rental companies.
  • Growth of synergistic businesses such as distributed solar for EV charging

The vehicle that I think could give this a boost if it was produced on a large scale to supply the African market is the upcoming BYD Seagull. The BYD Seagull is a small battery electric vehicle powered by his 30.7 kWh LFP battery and a 55 kW (75 hp) motor. It will be available in China later this quarter, with prices in China starting at $8,700. This means it’s in the segment just below his BYD Dolphin, another popular member of BYD’s Ocean series. Recently, a pink seagull was discovered in China. The Seagull has dimensions of 3780 x 1715 x 1540 mm and a wheelbase of 2500 mm. $9,000 for a brand new small 5-door hatchback with BYD’s 30.7 kWh LFP battery? This could be a real game changer.

BYD is perhaps best positioned to lead mass production of affordable small cars like the Seagull and take them to the world. BYD is accelerating its overseas expansion program and launched ATTO, one of his flagship models, in several markets last year. A more affordable small hatchback, the Dolphin, is also set to enter more markets this year. But we are curious to know BYD’s plans for his Seagull and how many markets it will be introduced to in the near future. This could be a game-changer in many countries in terms of accelerating EV adoption.




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