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Guiding the deployment of electric vehicles in the developing world

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Environ. Res. Lett. 17 (2022) 071001
PERSPECTIVE
Guiding the deployment of electric vehicles in the developing
world
Michael O Dioha1,∗, June Lukuyu2, Edgar Virgüez1 and Ken Caldeira1,3
1
Department of Global Ecology, Carnegie Institution for Science, Stanford, CA 94305, United States of America
2
206 Knowles Engineering Building, 151 Holdsworth Way, University of Massachusetts, Amherst, MA 01003, United States of America
3
Breakthrough Energy, Kirkland, WA 98033, United States of America
∗
Author to whom any correspondence should be addressed.
E-mail: mdioha@carnegiescience.edu
Keywords: electric vehicles, developing countries, climate policy, energy policy, energy transition
1. Introduction
Transportation contributes about 24% of total global
carbon emissions from fossil fuel combustion (IEA
2020). To decarbonize the transportation sector in
support of global climate action, electric vehicles
(EVs) will play a key role (Coignard et al 2018,
Taljegard et al 2019, Muratori 2021, Dioha et al 2022).
The total number of EVs on the world’s roads has
increased from nearly zero in 2010 to over 16 mil-
lion in 2021, with battery EVs (BEVs) leading the
expansion (IEA 2022). As highlighted in the 2021
Global EV Outlook by the IEA, the global EV stock
is estimated to hit 145 million by 2030, which repres-
ents about 7% of the total vehicle stock (IEA 2021).
Figure 1 shows the global sales of EVs from 2016
to 2021.
From figure 1, it can be observed that the global
sales of EVs is on an upward trend. Figure 1 also shows
that the global EV fleet is concentrated in the indus-
trialized regions of the world (China, Europe, and
the United States). In 2021, China, Europe and the
United States accounted for 95% of the total EV sales
in that year, while the remaining 5% is distributed
in developing countries like Indonesia, India, and
Brazil. Clearly, EVs have not met similar success in all
regions in the last decade. Notwithstanding, develop-
ing countries are showing interest in adopting EVs.
For example, Africa has the lowest EV fleet world-
wide, but the sale of EVs in the region has increased
in recent years (McDonnell 2022). Although EV sales
remained low across Africa, they increased by 90% in
2021, of which BEVs accounted for 85% (IEA 2022).
As of January 2022, South Africa had about 1000 EVs
in its vehicle stock of 12 million. In Kenya, EVs total
around 350 in a vehicle stock of 2.2 million. Several
developing countries have also established plans to
further deploy EVs. For example, Kenya aims for 5%
of its vehicle imports to be EVs by 2025. Namibia
© 2022 The Author(s). Published by IOP Publishing Ltd
https://doi.org/10.1088/1748-9326/ac765b
plans to have 10 000 EVs as part of its vehicle stock
by 2030, and Egypt aims to locally manufacture about
20 000 EVs per annum from 2023 (McDonnell 2022).
While most industrialized countries in Europe
and North America are adopting EVs due to their
ability to reduce greenhouse gas emissions from the
transportation sector, the motivation for EV adop-
tion in developing countries4 may be more intricate.
Many developing countries such as Ethiopia, India,
and Haiti still have many underserved populations,
indicating the need for socio-economic development
as the most critical priority in these regions. Thus, for
policymakers in the developing world, the most press-
ing issue is how to provide adequate infrastructure
and access to modern energy for essential services to
eradicate extreme poverty. For this reason, many gov-
ernments of developing countries have introduced
several policies, including subsidies for fossil fuels
and electricity tariffs, to lift their populations out of
poverty (Groot and Oostveen 2019). Consequently,
for EVs to be commercialized in the developing world,
they should have the potential to address other press-
ing challenges besides climate mitigation that face the
developing world.
This document aims to provide a holistic frame-
work for policymakers in developing countries to
consider when beginning to think of EV deployment.
The central question explored in this perspective is:
how could developing countries go about commer-
cializing EVs in an economically sustainable manner?
Here, we examine a suite of factors that could guide
policy development for the smooth deployment of
EVs in the developing world.
4 By developing countries, we refer to countries with less
developed industries and a low Human Development Index
relative to others, listed as the UNFCCC’s Non-Annex I countries:
https://unfccc.int/process/parties-non-party-stakeholders/parties-
convention-and-observer-states.
Environ. Res. Lett. 17 (2022) 071001
Figure 1. EV sales by region 2016–2021. Reproduced with permission from (IEA 2022).
2. Considerations for EV deployment in
the developing world
2.1. Nature of the electricity supply system
Over the past decade, the share of net capacity addi-
tions from renewable sources in developing coun-
tries has steadily increased, reaching 70% in 2020
(BloombergNEF 2021). Several developing countries,
such as Kenya, Ethiopia, Ecuador, Uganda, Nepal,
and Namibia, with over 80% electricity generation
from renewable sources, could consider accelerat-
ing EV deployment since new electricity demand
from EV can be met with a relatively clean electri-
city supply. However, generation capacity is a tiny
piece of the puzzle; the real challenge for develop-
ing countries will be the limitations that the already
fragile distribution grids impose on the increased
load from EVs. In Africa, for example, more than
half of grid-connected customers are plagued by fre-
quent and often unplanned power outages that last
several hours or days. To support the adoption of
EVs, electric utilities will need to invest in upgrading
aging distribution transformers, weak transmission
and distribution lines, and other equipment. How-
ever, improving reliability depends on whether util-
ities can generate sufficient revenue from electricity
sales to invest in infrastructure upgrades. Due to the
low electricity demand in the region, only two utilities
in Africa are currently recovering their operating and
debt-service costs (Kojima and Trimble 2016). Added
revenue from EV charging presents a significant
opportunity for utilities to strengthen their business
models.
However, poor reliability of electricity creates a
vicious cycle; it is a crucial deterrent to electricity
demand growth, as customers are usually very unwill-
ing to pay for an unreliable connection. Yet this
low electricity demand perpetuates poor reliability
and overall electricity service. Poor reliability is also
expected to be a critical barrier to adopting EVs from
a consumer perspective. Therefore, it will be crucial
for relevant actors to develop policies and strategies
to support utilities to improve grid reliability before
pushing for accelerated EV adoption.
2
M O Dioha et al
Besides grid reliability, grid stability is also a con-
cern. Both urban and rural areas tend to have concen-
trated peak demand during evening hours, between
6 p.m. and 9 p.m., when people turn on the lights and
use electrical appliances. Managing the EV charging
market during peak hours, especially for residential
consumers who may be inclined to connect their EVs
as soon as they get home from work, will be critical
for utilities to ensure grid stability. Utilities will need
to invest in intelligent charging solutions and imple-
ment strategies that incentivize smart charging, such
as low tariffs for charging during off-peak hours.
2.2. The market structure and consumer
perception
Consumer perceptions and concerns over upfront
costs, power reliability, convenience, and functional-
ity are significant barriers to EV adoption in devel-
oping countries. The high upfront cost of EVs, in
particular, is a massive deterrent in countries where
income for half of the population remains at $3 per
day or less (Birdsall and Meyer 2015). Some gov-
ernments have established financial incentives in the
form of subsidies and tax exemptions to encourage
EV adoption. However, these incentives have not had
the desired effect for many reasons. The most prom-
inent reason is that even with tax exemptions, the vast
used-vehicle market in developing countries is still
very cost-competitive compared to EVs.
Therefore, innovative business models such as
pay-as-you-go, fee-for-service, and battery swapping
will play a crucial role in developing countries’ large-
scale adoption of EVs. Fortunately, advancements in
fintech and digital financial services, such as mobile
money in developing countries, are spearheading the
development of these business models. In addition,
governments, policymakers, and other key stakehold-
ers will need to create the right political and eco-
nomic environment to support the local assembly
of EVs. In East Africa, for example, the majority of
current EV market players have invested in the local
assembly of electric two-wheelers, mini-buses, and
buses.
Environ. Res. Lett. 17 (2022) 071001
‘So, where will I charge my car?’ Utilities in devel-
oping countries will have to grapple with this inev-
itable question from consumers. Rushing to the fuel
station when a car is running out of fuel, and filling
only up to the amount that the funds in hand will
purchase, is the traditional mindset in many develop-
ing countries, especially in Africa. It is unclear how or
whether this behavior will reflect EV adopters’ range
anxiety. It is clear that planning for a reliable, stra-
tegically placed charging infrastructure network will
be crucial to how willing consumers will be to adopt
EVs. Further, efforts to gain insight into people’s per-
ception of range anxiety and EVs in different contexts
and electric cars, in general, will go a long way toward
designing and making available the right technology,
incentives, and supporting infrastructure.
2.3. Nature of the existing vehicle fleet and
transportation infrastructure
Developing countries usually have low vehicle own-
ership rates and poor public transportation systems,
and these factors directly influence vehicle needs
and mobility patterns. For example, Nigeria has 31
vehicles per 1000 inhabitants compared to the United
States, with around 800 vehicles per 1000 inhabitants
(Our World in Data 2021). It is pertinent that poli-
cymakers in the developing world assess the state of
their transportation systems to identify the hotspots
for electric mobility. EVs come in different forms,
and thus developing countries may need to consider
what type of EVs are suitable for them. In a coun-
try like India, two-wheelers account for the largest
share of the country’s vehicle fleet (Bansal et al 2021).
In this case, policymakers may consider two- and
three-wheelers as excellent candidates for electrifica-
tion. The same can be said for some countries in East
Africa, such as Kenya.
However, in a country like South Africa, the
share of two-wheelers is insignificant compared to
four-wheelers. In this case, four-wheelers may be a
better candidate for electrification than would be
two- and three-wheelers. There is also a need to con-
sider EV deployment at sub-national (city) levels. For
example, in a city like Lagos, Nigeria, with a relatively
large stock of mini-buses (Danfo) for public transit
(Cervigni et al 2013)—the electrification of the bus
fleet could yield more benefits than could the elec-
trification of other types of vehicles. Irrespective of
the vehicle category considered, the technical level of
the EVs also needs to be considered. Highly technic-
ally advanced EVs may not be suitable in developing
countries, given that a majority of these countries lack
highly skilled EV technicians.
Also, the locations more convenient for charging
EVs vary substantially. Experience has shown that
private EV owners in industrialized countries prefer
to charge their EVs at home (Funke et al 2019). Many
cities in developing countries are unplanned and thus
do not have coordinated housing development, which
3
M O Dioha et al
may influence the pattern of EV charging. Residen-
tial houses in several developing countries are usu-
ally not equipped with garages, and thus EV owners
in these regions may rely on public charging. Under-
standing these challenges at the national and sub-
national levels can help policymakers in the develop-
ing world plan for the charging infrastructure needs
of any vehicle category they plan to electrify.
2.4. Political economy of fossil fuel
One of the priorities of policymakers in develop-
ing countries is to improve their economy. Thus,
they need to consider how EV deployment could
spur socio-economic development. Currently, many
governments in the developing world, especially
in Africa, provide subsidies for gasoline, and this
becomes a fiscal burden for the government. This
expensive subsidy has robbed many developing coun-
tries of potential vital infrastructures. Subsidies cost
African governments an average of 1.4% of their
gross domestic product (Hill et al 2018). For instance,
Nigeria spent about = =10 trillion (around US$25 bil-
N
lion) to finance petroleum subsidies between 2006
and 2018. This value is nearly 200% more than the
amount spent on education in the same period (Uduu
2020). While maintaining subsidies in these countries
mitigates the negative economic impact of high oil
prices on the masses, the subsidies distort the market
and may lead to increased fossil fuel demand (Collett
et al 2021). However, EVs could remove the need for
these expensive petroleum subsidies.
On the flip side, fuel taxes are introduced along-
side subsidies in a country such as Ethiopia. Hence,
reducing fossil fuel demand could reduce revenue
sources for the government. Also, in oil revenue-
dependent states such as Venezuela and Angola,
reducing fossil fuel consumption via EV adoption
could present an economic hurdle for the govern-
ments. For some oil-poor developing countries, espe-
cially in Asia, policymakers may consider deploy-
ing EVs to reduce fossil fuel imports, and thus
increase energy security and geopolitical independ-
ence, thereby reducing the strain on their foreign
exchange. Some other developing Asian countries,
such as Pakistan and Thailand, consider EVs as a way
to unlock economic development and job creation
through domestic EV manufacturing (ICCT 2020,
Bloomberg 2021).
The EVs socio-economic ‘math’ is not straight-
forward. For some policymakers in developing coun-
tries, especially in oil-revenue-dependent states, EVs
may be seen as a potential bottleneck to economic
development, or an opportunity to diversify the eco-
nomy. Other policymakers, especially those in coun-
tries that depend on oil imports, may consider the
adoption of EVs as means to improve the local eco-
nomy through savings from the reduction of oil
imports, as well as an opportunity to enhance energy
security.
Environ. Res. Lett. 17 (2022) 071001
2.5. Public-health challenges driving the
deployment of EVs
The top ten most-polluted cities in the world based
on PM2.5 emissions are located in developing coun-
tries, for instance India and Pakistan (SMART AIR
2022). A significant portion of the population in the
developing world, especially those living in traffic
congested cities like New Delhi (India) and Lagos
(Nigeria), are exposed to local air pollutants daily,
and this contributes to respiratory and cardiovascu-
lar diseases. In 2015, an estimated 74 000 premature
deaths in India were attributable to transportation-
related emissions (ICCT 2019). Over the years, sev-
eral countries have established different policies, such
as fuel economy standards and the use of advanced
fuels with low emission factors, to mitigate trans-
portation emissions. However, some of these policies
have not provided the much-anticipated results in
terms of reduction in air pollution, due to the con-
tinuous use of internal combustion engine vehicles in
those regions. One of the innovative ways to guaran-
tee emission reduction from the transportation sec-
tor is through the deployment of EVs, especially if the
EVs’ power needs are satisfied via renewables.
Recently, we have seen countries such as China
increase EV deployment on account of local air reg-
ulations, and not strictly by policies directly aimed at
EV deployment for climate mitigation. Policymakers
in the developing world should consider potential
synergies when aligning EV deployment with the
most pressing public health challenges (e.g. air pollu-
tion regulations). As earlier opined, developing coun-
tries commonly rank climate-oriented solutions as
a second priority in contrast to public health prob-
lems, which rank at the forefront of their interest. For
developing countries like India, Pakistan, and Mexico,
which host quite a number of the most-polluted cit-
ies in the world, the purpose of EV deployment may
be to cut down local air pollution and the resultant
mortality. Consequently, policymakers in the devel-
oping world who are facing transportation air pollu-
tion challenges may want to look into deploying EVs
to address these health concerns.
Furthermore, with an increased number of devel-
oping countries designing nationally appropriate
mitigation actions that reduce the emissions of cri-
teria pollutants, the replacement of the oldest frac-
tion of the vehicle fleet with new vehicles that gen-
erate lower emissions could be a driving force for
EV deployment. Nonetheless, policymakers should
consider that while EVs are a natural candidate,
their inclusion as a solution depends, in significant
part, on how clean the grid is. For example, con-
sidering that around 50% of the particulate matter
inventory of Bogota (Colombia’s capital city) comes
from the vehicle fleet, the central government has
been introducing policies to implement a centralized
transport system (Rodríguez et al 2016). The first
stage concentrated on promoting vehicles with higher
4
M O Dioha et al
emission standards and that use natural gas, while
more recently, policies favoring the deployment of
EVs have been observed. The driver for this deploy-
ment was primarily to lower the emission of particu-
late matter.
3. Conclusion
There is no ‘one-size-fits-all’ approach to EVs deploy-
ment in the developing world. EVs can play differ-
ent roles in different countries based on their national
circumstances. For some developing countries, EVs
could support them only in achieving their climate
and air quality goals. At the same time, for some,
EVs may play a more critical role in providing energy
security, economic development, and improved grid
reliability. Therefore, the factors analyzed here are not
exhaustive, but they can provide additional informa-
tion to guide policymakers in developing countries,
who are interested in deploying EVs into their vehicle
fleets. Consequently, each developing country could
benefit from a detailed needs assessment to under-
stand how the integration of EVs could be valuable
to them.
Data availability statement
No new data were created or analyzed in this study.
Acknowledgment
This work is supported by a gift from Gates Ventures
LLC to the Carnegie Institution for Science.
ORCID iD
Ken Caldeira  https://orcid.org/0000-0002-4591-
643X
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